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:
Immediate Obligations
Monthly True Expenses
Personal Debts
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?
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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.
Savings
Sinking Funds
Necessities
Discretionary
Health & Wellness
Monthly Bills
Annual Bills
His & Hers (for our spending money)
Taxes (used once a year during tax time)
Charity
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).
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Heather Your Sinking Funds, I call Future Obligations and have as a tracking account. I don't have a savings category, besides the Emergency and Auto Emergency Funds, also tracking accounts. Several of your categories I don't have, others have different names.
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Ruff16965 (05bd62cee897) My sinking funds (your True Obligations) live in our checking account and replace our monthly buffer.
Over all, we have approx 58 line items that are within the master categories.
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Heather I see what you are saying.
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I have 12:
Savings
Housing
Insurance
Utilities
Healthcare
Food
Transportation
Kids
Clothing
Taxes
Giving
Misc discretionary
I break some of these down to subcategories if I want to track something more closely, like a fixed payment for summer camp due in 4 months.
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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.
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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.
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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.
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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.
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I have 12:
- Debt
- Savings
- Home
- Everyday
- Media
- Health
- Animals
- Impreza
- Giving
- Travel/Experiences
- Spending
- Business
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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)
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Ruff16965 (05bd62cee897)
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?
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lindsay_g Temporal categories are often most useful in the beginning while you are getting your legs under you. It helps you make sure that the rent is allocated before it is due. I'm at the point where the mortgage is my only debt and I have fully funded categories for catastrophic loss of income, car repairs, home repairs, and medical out of pocket maximums, and I budget the same amount of money to each category pretty much every month. Therefore the temporal organization isn't that useful to me. Functional categories let me look at how things work together and make priority decisions - do I want to focus my end of month leftovers on the kitchen remodel or the new bedroom furniture?
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jenmas
jenmas said:
do I want to focus my end of month leftovers on the kitchen remodel or the new bedroom furniture?New bedroom furniture. You can always move to a place with a better kitchen. That's what I'm doing. 😁
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lindsay_g Like when I was teaching or tutoring, I would also tell my students. "Use what works for you and gets the job done. " I don't think there is any one size fits all approach as long as you follow the 4 rules.
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nolesrule ah, but could I sell my place with the kitchen at hand? 😉 (I mean yes, probably I could list it with a few hundred in cosmetic touch ups, but the fridge and range are ancient)
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jenmas This makes a lot of sense. I wonder if I'm asking the question because I'm getting to that point. The debt isn't wiped out but it's also not dominating my life and I have it planned and under control. Categories aren't fully funded in all cases but they are in good shape and doing their jobs (I just bought a car that I had more or less already budgeted for).
The lifestyle and priority listings made a lot of sense to me and I already starting fiddling round with mine to make 'choices' the listing decision rather that 'frequency of payment'.
For what it's worth, I think you should remodel the kitchen. It's lovely to have somewhere nice to sleep, but let's face it, you are asleep. Whereas a nice kitchen makes your day better every day, two or three times a day, while you are awake to enjoy it! 😄
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lindsay_g As long as you have a comfortable enough mattress. Then you can say "let's face it, you are asleep". An annoying, uncomfortable bed takes priority over a kitchen remodel any day! 🙂
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bevocat Yeah, okay, mattress, kitchen, rest of the bedroom .... 😄
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