How Many Categories?
Good morning all,
So I have been listening to the old podcasts for YNAB and I worked my way up to #133. One of the things that Jesse talks about is simplifying and cutting down the number of categories. Got me to thinking and wondering how many categories others have.
I have 8:
Monthly True Expenses
Semi-Annual True Expenses
Annual True Expenses
Quality of Life
Just for Fun
I then have 11 Tracking accounts, I could cut out about half of them as I have gift cards that I have been given or bought for myself in there, but by tracking them I know what I have to spend for movies or a meal out.
So what do you have?
I have quite a few, some of which I'm sure other people would combine with each other, but that I like to keep separate.
Health & Wellness
His & Hers (for our spending money)
Taxes (used once a year during tax time)
Hurricane Irma (I spent over 30 days evacuated and missed three weeks of pay and tracked all my spending in one budget line related to the hurricane, so I separated it into it's own category. That spending was out of the ordinary and I don't want it muddying up any reporting I may want to look at at the end of the year).
I have 73 categories split between 12 master categories (Everyday Expenses, Personal Stuff, The Home, Vehicle/Transpo, Electronics/Entertainment, Giving & Celebrating, Medical, Finances, Subscriptions/Memberships, Vacations, Wish Farm, Ignore These).
I have 22 on budget accounts (including 3 checking accounts, 3 savings accounts, 8 paid in full credit cards, my wallet, my CD ladder which is 5 separate accounts and I'll be adding another 5 in May, a foreign currency account, and a gift card account that is for any/all giftcards). I have 9 off-budget (Tracking) accounts including 2 property assets (guesstimates), 2 mortgages, 3 IRAs, 1 401(k), and 1 investment account.
I have a separate budget for my investment property (though the mortgage and property value are tracked in my main budget for Net Worth purposes) that has 13 categories split between 3 master categories (though one is related to buying/selling so won't get any use until I decide to buy another property). I have a dedicated checking account for this budget and that's the only account.
Since accounts have been mentioned a couple of times. I have a traditional Checking/Saving account and then a prepaid debit card that also has a saving account. The only thing I keep on the debit card is my future obligation money. The reason for this is two-fold. First, to keep the funds from being easily spent, the card is kept in my desk drawer, so it takes a conscious effort to use the funds, secondly, all my eggs are not in one basket. I have been the victim of identity theft 3 different times and had my card cloned more times than I can count.
Budget Structure: I have 4 master categories containing 33 subcategories: Daily living (8), Irregular (15), Emergency Funds (5), Savings (5). I tend to group like-expenses together which keeps the overall total number down.
On-budget Accounts: I have 16 on-budget accounts...Yeah...16!...it's a bit of a mess...I started to transition to a different bank, and then I opened accounts in a third bank to earn a promotional cash incentive. I will be simplifying my account structure in 2018: 2 chequing accounts, 3 savings accounts, 3 cash accounts (wallet, home cash-stash, laundry coin), 5 gift card accounts, 2 paid-in-full credit cards, and a legacy PayPal account that I don't use but can't seem to close.
Off-budget tracking accounts: I have 15 of those. The ones I use and interact with monthly are 2 reimbursable expense accounts, 2 social funds I manage for others, and an employer-funded HSA that I have to use before a sunset date. The rest are registered investment accounts, LOC, family loan (funds owed to me), resale value of my car.
Not counting credit card debt, I have 9 master categories (The Money Hub, Long-Term Goals, Bills, Subscriptions, Transportation, Lifestyle, Food, Hobbies, and Non-Credit Card Debt) and those are broken down into 43 subcategories. My current category structure was formed over the course of a month or two in a test budget before I adopted it at the beginning of Thanksgiving week, and I'm pretty satisfied with it.
I have 7 on-budget accounts: 1 checking, 1 savings, 1 cash, and the 4 credit cards that I'm trying to pay down. I've tried to add PayPal, but I've always had errors and I don't keep money in it to actually warrant tracking it.
I used to keep my car loan and student loans in YNAB for tracking, but they'd always disconnect and trying to reconcile while manually calculating interest was too much for my brain, so I track them on paper.
I have a total of 5 master categories and 34 subcategories, broken down as such:
- Immediate Obligations (8)
Contains housing, utilities, and basically any other "necessary" bill.
- Everyday Expenses (13)
Contains food, fuel, personal/pet care, home/tech upgrades, etc.
- Rainy Day Funds (3)
General emergency fund, car repairs/maintenance, insurance deductibles.
- Savings Goals (6)
- Giving and Gifting (4)
As far as accounts go:
I have a checking account, a savings account, and three CCs set up for budgeting, and a tracking account for my retirement fund.
- Immediate Obligations (8)
Like you, I just listened to the same podcast and came looking for ideas. I think my groups, or master categories, make sense, but are quite oriented around the calendar (daily and monthly spending, yearly or sometime costs, annual big spends).
I wonder if more useful categories would focus on priorities in the way some people described on here?
Has anyone switched from one way to the other and compared them?