I have to keep the Housing ones separated as interior/exterior because I’m in charge of the exterior, and Julie’s in charge of the interior. Housing: Interior (was furniture, appliances, improvements).Bills: Fixed (includes property taxes, Lifelock, life insurance and health insurance).Bills: Utilities (combined Gas and Water/Garbage, both variable, but manageable as such).Housing: Furniture, Appliances, Improvements (v).My setup before I simplified (marked here as variable: v and fixed: f, not marked in my actual budget): I’m going to rename our Housing master category to Bills and do some serious category surgery there, consolidating, and adding the insurances. So… why not combine them? They’re ripe for consolidation. I budget the exact same amount into each of those categories each month. I have a master category called Insurance, with three subcategories: I’ll start a Recreation: Dates & Family category, and hide the other two. I’m not deriving any value in knowing that I spent X on Dates, but Y on Family stuff. ![]() So I’m comfortable keeping that one separate… the Dates and Family though… those really can be combined. Vacation is for specific vacations we want to take, with target dollar amounts. The His/Hers categories must stay, because Julie and I like to have our own money, and if they weren’t separate well, that defeats the purpose. Remember, your evaluation of the usefulness of a category comes down to whether you really, truly care how much you’re spending in a particular category. There used to be eight there, but I cut it down to five. Now, back to my budget….and a bit of that category bloat we were looking at. See his full financial setup here or look at a whole trove of real budget examples ! Here’s what a shorter and simpler budget might look like, put together by a new YNAB budgeter. Will it help me spend more (a noble goal) to track this separately?.Will it help me spend less (frivolous expense)?.The question to ask is: Do I care to know how much I’m spending in this particular category? More categories isn’t bad, to the extent that you gain awareness that drives decisions from your extra granularity and line up to meet your financial goals. I can see now that I’ve experienced a bit of category bloat. My current budget file goes back over a decade. If I were wearing long sleeves, I’d roll them up, because this is going to take some work. To that end, I present the lean budget, and my ramblings as I work through it with my own personal budget. The focus of an ideal budget is to maintain those values, while cutting anything possible. Those are the values I get from budgeting. Liberated, because I’m not living right on the edge financially, from paycheck to paycheck.Flexible, understanding that life is anything but “expected.” □.Looking forward, so I’m ready for the “unexpected.”.That brings me a lot of peace and contentment. Aware, which means my monthly income is aligned with my values.No one wants an overly complicated personal finance situation. Every dollar is given a job: and that means total clarity for your take-home pay.Īlong with an ideal budget being a zero-based setup, you want a lean budget too. That means you take all the money you have right now in your checking accounts and savings accounts-and assign that money to specific budget categories-whether it’s earmarked for student loans or to pay off debt, or going to housing costs or an emergency fund. To save money and have more guilt-free spending money, a zero-based budgeting method is key. Your ideal budget is completely bespoke for you and your financial goals and can’t be distilled down to catchall budget percentages. You might be waiting for me to talk about the 50/30/20 budget and how there’s a one-size-fits all breakdown of how much you should spend on each category, but there isn’t. How do we get there? Setting Up Your Ideal Budget ![]() The ideal budget is simple: it gets you maximum results with minimal effort. ![]() In this post you’ll see what a budget looks like with all the necessary pieces, plus, you’ll: I started a money management app and method called YNAB, and today I show you what my budget looks like! If you’re starting to get your finances under control and are wondering what an ideal budget looks like, we’ve got you covered.
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