Budgeting a surplus
Here is my issue, which is kind of a good problem to have.
Until recently, I have been bringing in more than I spend, so I have a surplus in my checking account. But because my expenses are about to go up, (and because I'm trying to follow principle #1) I'm going to have to start being careful and I don't want to spend away all of my savings. So, what I'm trying to do is budget only with what I bring in every month, not necessarily with the surplus. So how can I segregate the surplus? Right now it is just carrying forward into future months.
Create a category (maybe deferred income, or whatever makes sense to you) & budget it there. If some of your savings is for Space Tourism or All The Gadgets, budget some there first so you know not to touch it until Elon Musk is ready to launch you into orbit. When/if you do need it, move what you need into TBB when you budget each month & budget as normal.Reply
You do exactly what your subject says, budget the surplus. Create a category or multiple categories for it and budget it. That’s exactly what categories do, segregate funds. Just because it’s budgeted doesn’t mean you plan to spend it. One of my categories is my Emergency Fund that contains 6 months of living expenses. That category balance hasn’t budged for years now.Reply