Over the next few weeks, I will be going over my budget ^[1]in detail.

The first section is income, but that’s straightforward. A line for each income source, bi-weekly, monthly and annual totals. Simple.

Before we start, a word on the organization. There are five columns:

• Category - This is the description of the line item.
• Cost - How much do you pay for this item?
• Time - What is the frequency of the payment? Valid values are ‘m’, ‘q’, ‘y’, ‘w’ for ‘Monthly’, ‘Quarterly’, ‘Yearly’ and ‘Weekly’.
• Monthly - Cost and Time are combined to calculate the monthly expense, to make it possibly to budget ^[2]. If this is $100, I need to set aside a C-Note each and every month to make the payment when it comes due.
• Yearly - This column is mostly informative. It’s helpful to see this in comparison to my annual pay.

The first section I am actually going to address is discretionary spending.

• Groceries/Dining $475.00 - We don’t budget heavily for groceries, which would be a surprise if you saw me. At the smallest I have ever been, fit, I was never small. We shop smart, buy in bulk when it makes sense, and rarely eat out. We also keep cooked rice and beans in containers in the refrigerator as a cheap and healthy way to stretch almost everything we eat.
• Discretionary $250.00 - This gets used for household items ^[3], like toilet paper and soap. It also get used for the odd book or movie, or to cover the gaps between the other categories and reality.
• Baby ^[4] stuff $60.00 - We have two children in diapers. ‘Nuff said. This category does get progressively smaller as the baby items are outgrown and the children get potty-trained.
• Gas/oil $200.00 - Gas and auto-maintenance. This is actually higher than monthly costs, allowing us to set some aside for larger maintenance issues.
• Clothes $15.00 - All of our dressers are overflowing, so this is strictly replacement cost for the time being. Our kids wear a lot of hand-me-downs.
• Blow Money $50.00 - Occasionally, habitual shoppers need to shop. If they don’t do it on-budget, they will do it off-budget and kill the whole idea.

Initially, we used a “virtual envelope” system. We had a spreadsheet and every time something was spent in this category, we entered the amount and stopped when the category was spent. Didn’t work. We are going on a pure, cash-only system as of the first of the year. No money, no spendy.

Related posts:

1. Budget Lesson, Part 8 ^[6] This is a continuation of the budget series. See these posts for the history of this series. This time, I’m looking at our discretionary budget....
2. Budget Lesson, Part 4 ^[7] Part 4 of the Budget Lesson series. Please see Part 1, Part 2, and Part 3 to catch up. The Google Doc of this example...
3. Budget Lesson, Part 2 ^[8] Today, I am continuing the detailed examination of my budget. Please see part one to catch up. This time, I’m going to look at my...