Background: I have used an excel spreadsheet to track every cent of my spending for years (i.e. recording 'spending', not BUDGETING). Then I saw this program and I liked the idea of budgeting first!
Got the software, here we go...
Do you budget for 'all' your categories by totalling a years worth of accumulated spending and dividing by 12? Then adding this figure in the current month, then copy the figure another 11 times for the remainder of the year? I know this method is probably the tightest in terms of 'planning' to ensure you stay in the black.
Anyway, I did this....for food, power, insurance, ..., ....YES all of my 56 categories (which mirrored the categories I had in my old excel system).
But then I realised 2 annoying things:
1. If a bill or purchase increased over time (as they all do) I would have to go in and change the budget entry from that date forward. For example, power bill is 800/yr. Divide by 12 = $66 entered as a budget each month for that category. If the bill rises by, say 5%, the following year. The $66 will also increase by %5 - I need to manually go in and set that figure again. Remembering I have 56 categories!
2. I like to see when a bill is due. For example, if I have a single yearly payment of $3000 for personal insurance due in December I want to be able to visually see it coming. But all I see are recurring monthly budget amounts of $250 (3000/12).
which is why....I stopped dividing my bills by 12 and just put in the full amount for whenever I knew they would be due. For example, water bills vary in amounts but and are paid quarterly. I totalled a years worth, divide by 4 and input these average figure into the months of Feb, May, Aug, Nov. Now I can see when they are due and for how much. I guess the down side to this system is that I may not have enough to cover the larger bills when they arise (because I haven't actually allocated funds 'each month')
Fair dinkum, have I lost the plot? How do you do it?