Zero-based budgeting is a new thing for me.
I always felt like budgeting wasn’t necessary because we made a decent amount of money. Not to mention, we always seemed to fail at it. I had general ideas of what our normal average spend was on a category, and at the end of the month, I’d say, “Oh wow yeah, we spent a lot on those two big restaurant dinners last month, so we’re way over the usual amount.”
Derp.
We started budgeting again because my husband just quit his job to pursue a small business venture. He’s taking a month off to reset before chaos ensues. He’s worked in a high-pressure, fast-paced job for the last two decades and hit major burnout this year. Time for a rest, which we’ll accommodate.
I’d never done zero-based budgeting, but after trying it out in December, I realize we should have been doing this all along.
Here we go for January:
January income is my FT job, husband’s part-time job, husband’s last paycheck from FT job, stimulus, and some repayments from my personal money (I accidentally paid for a gift out of the wrong account).
Expenditures of note include car insurance, which we pay up front in full each year. The electric company had delays in getting bills out for December, so it looks like we’ll pay more in utility bills in January. I also have some minor dental surgery on the schedule this month. Fun.
Miscellaneous is a buffer for unexpected needs, and Fun Money goes to our separate accounts to spend on whatever the hell we want.
Right now, all savings goes to… well, savings. I’m contributing to the match in my TSP (401k) and to the contribution limit in my HSA. I’m holding off on maxing out the TSP and Roth IRA until we have an idea of what my husband’s business will be bringing in in a few months. Also, we’ll be putting a lot of cash up front for that. It’s a planning nightmare, but we’ll figure it out.
I’ve found a lot of great Instagram and YouTube accounts that walk through their budgeting processes.
Do you have a favorite?
-K