This morning, I sat down to fine tune our January budget in Excel. (Even though I love Mint, I plan out our budgets in Excel every month, and then transfer those totals over to Mint as necessary. I use Mint primarily for tracking, and Excel for budgeting.)
I’ve tweaked a few things, including increasing our blow money budget to $80 ($40 per person) as I talked about here.
My husband and I are also going to make a much more concerted effort to consistently fund our retirement accounts this year. While our goal remains 15% of income toward retirement every month, we still aren’t quite there in terms of our income and other expenses. We have set up a standard savings rate for 2012 of 11% every month and plan to apply any windfall money to topping off our retirement accounts.
The biggest change, though, for 2012 has been increasing our food budget from $500 to $700.
Whoa. That’s a 40% increase.
This year we are expanding our household – no, we’re not having another child. Rather, my mother is going to be living with us for at least the next year.
With another grown-up mouth to feed, I knew that I needed to adjust our food budget. It’s been a while since I’ve had to make this big of an adjustment, and honestly, I’m not sure that we’re going to need that full $200. But I’d rather have the wiggle room, than end up blowing my budget half-way through the month.
If, after a few months, I find that we’re consistently coming in under $700, I’ll adjust that amount down. But for now, our food budget is going up – by a lot – and I wanted to tell you guys why.
Of course, increasing food spending by $200 means that we had to decrease our spending in other areas in order to balance the budget. For now, the biggest casualty was our our vacation fund, but other sink funds have been reduced as well. Hopefully we’ll be able to earn more income in 2012 to help us bring those funds back up to my comfort level.
The final change to our budget – and our home! – is that we’ll be doing some construction in our basement. We will be carving out a separate guest bedroom from our furnished basement playroom and converting a half-bath into a full-bath. We’ll be sticking to a strict budget and paying cash, but doing so will mean emptying out our home maintenance sink fund.
A top priority in 2012, therefore, will be building that fund back up. As I’ve mentioned before, one of the way ways we insulate our Emergency Fund is to build fences around it with short-term sink funds for unplanned but predictable expenses. We won’t be touching our Emergency Fund to do this construction, but depleting our home maintenance fund means the EF becomes vulnerable to any of the fun little things that always seem to pop up with home ownership.
I hope that sharing our personal budget adjustments with you helps to drive home the point that budgeting is not a static activity.
Our lives change, our families change, our income changes, our priorities change – and our budgets have to change accordingly.
Have you reevaluated your budget yet for 2012? Any big changes on your horizons? Will food spending be going up? Or coming down?