How do I categorize such an infrequent purchase?

After almost three years of ownership, I just lost my Apple Watch (don't ask) and am purchasing a new (used) one for $200.  I hate to put it under "Stuff I forgot to budget for" but it also doesn't fit under "clothing" (in my mind).  I could create a "tech" category but purchases there are so very rare.

Any ideas?  What do other folks do for tech stuff?

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  • Definitely tech. Tech breaks, gets lost, or just becomes obsolete but you can't live without it, so it's a true expense that you likely want to budget for. You'll need new computers, headphones, smartphones, tablets if you use them, etc. over time. 

    If you can always cashflow even big tech purchases, then a more general shopping category applies, but most of us need a tech true expense category. 

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 1 yr ago
      • 6
      • Reported - view

      And to go a step deeper on this; my tech category is funded monthly based on the cost and length of lifespan for my items. So, for example, it seems I can get a laptop I'll like for around $1200, and I want to be able to buy one every 4 years or so. So that makes it $300/yr, or $25/mo. Phones I'll probably spend $600, but I want to be in a position to replace them every 3 years, so that's $16/mo. I add those together and fund the category $41/mo. Repeat for each tech item. Since I can always eke by a little longer, buy a cheaper item, or substitute with some money from another part of the budget, this category is a little bit flexible, but that math gives me a good starting point. For instance, my work gave me a tiny bonus this year for taking a class on teaching online, and I used the bonus to replace my ipad, which was otherwise due this year, so now I have excess in the tech category that I'll probably let just sit and buy a fancier phone or laptop when those come up. 

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    • WordTenor Thanks for the advice and I like the idea of figuring out the lifespan of the tech that I want to keep using and putting a little away each month to replace it.  I know that YNAB suggests a "computer replacement" category but I just haven't tried that yet.  I actually haven't tried budgeting for anything more than a year out.

      In your "Tech" category, do you differentiate between the things your saving up for vs. other tech spending?  I'm making the assumption that you might have a savings goal and then if other tech comes out of that category it is covered with other funds.  Or do you keep your long-term savings separate?

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 1 yr ago
      • 1
      • Reported - view

      ukimagic209 I buy all tech out of my tech category. Since there are some options on the back end, like buying a refurbished item or delaying the purchase, I don’t worry too much if I spend $100 on earbuds on sale or something like that. The savings math just ensures I’m well in the ballpark when it comes time to replace one of the critical tech devices. 

      Like 1
  • I put stuff like this under Household goods, which is basically anything that's not a consumable or clothing. Tech, chairs, tables, smokers, etc. I think the main thing is to recognize this isn't as "one-off" as one might think at first glance, and having a true expense category for these sort of things is a good idea.

    "Tech" works as well, if you want to limit/control such purchase in contrast to "non-tech" purchases.

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    • FWIW, I also have dedicated computer replacement and phone replacement categories. It's important to me that this money be there when I need it (based on estimated lifespan), regardless of whatever other household goods I might buy.

      Like 1
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 1 yr ago
      • Reported - view

      dakinemaui For me the reason tech gets its own category is that there's a predictable lifespan I can expect. I don't plan to replace my chairs or my pans every three years, or even every ten, but three years after I buy a new phone, I'd like to be in a position to at least have the option of upgrading it. 

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      • Bruce
      • Software Engineer
      • Bruce
      • 1 yr ago
      • 1
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      WordTenor I did something similar, although I may break out phone replacement and computer replacement...  Not sure yet.  I looked into the future, and said, my wife's laptop will probably need to be replaced in about 4 years ($700), my laptop will probably need to be replaced in 5 years ($1000ish) my phones will be replaced in 2 or 3 years (probably $200/$300 each...  I simply can't stomach paying more than that for a phone, even if I've saved up for it...  And you can get decent enough ones for that much.  Either mid range, or older flagships.) And probably get a laptop for the boys when they go to high school (they're on chromebooks  now, not sure if I'll get a better one for them, or go with actual laptop computer) one will be in HS next year, and the other follows the next year.

      So I put all that in, and got a pretty reasonable monthly payment to cover all that in the future.

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    • WordTenor Yeah, I guess the union of my computer and phone replacement categories are effectively a "high priority tech" category for the same reasons you cite.

      Like 2
    • dakinemaui Thanks for the advice and I think I'm going to create a "Household goods" category.  I'm newly-divorced and soon will be having to make lots of purchases, big and small, once I find a permanent place to live.

      As I mentioned in my last post to WordTenor, I'm debating if I should put my laptop replacement category separate from my Tech one.  I'm trying to avoid category sprawl!  Haha. 

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    • ukimagic209 categories exist to protect funds from being spent on other things. If you want to ensure money for a laptop is there when you need it, make a dedicated category (and fund it, of course).

      From past discussions, I believe the average number of categories is around 75, but lots of folks have more than a hundred. With goals filling in budget entries, the effort is the same regardless of quantity.

      Like 1
    • dakinemaui I agree with you but also disagree as far as goals filling in the budget amounts.  I get paid twice a month (well, every two weeks, so twice a year I get three pays in a month), so the first paycheck I have to fund the categories manually but then on the second pay I can let the goals fund the rest.  Am I doing something wrong?   Does one need to be a month ahead to let goals take over funding?

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 1 yr ago
      • 3
      • Reported - view

      ukimagic209 You can select multiple categories using the left hand checkboxes, until the "underfunded" value is as close to your paycheck/TBB as possible without going over, then hit the "Underfunded" button and it will fund just those selected categories.

      Edit: this is assuming you are fully funding the most urgent categories ("what jobs does this money need to do before I get paid again?") vs partially filling categories from the first check and topping off with the second. 

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    • ukimagic209 Good point. Things do get easier when you can budget in month-sized chunks. When paid bi-weekly, you would need to get ahead enough that the entirety of your checks fund categories in next months area. (You can then just queue them up in a holding category until you've received all your income.)

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    • Vibrant Thanks, and I think I've seen this method on some YNAB videos.  I'll have to consider this as a possible change, as right now I partially fund each category each time I get paid (I keep a separate spreadsheet with the amounts and also put them in the little notes area for quick reference).

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    • ukimagic209 If you have an income replacement or emergency fund, you might consider using some of that to cover expenses between your 1st check and the end of the month. This would allow you to switch to budgeting in month-sized chunks and avoid the partial-filling of categories.

      If you later need those funds, you could easily reallocate back (and switch back to paycheck-sized chunks). In the meantime, however, your budgeting process is far more convenient.

      (Personally, I've grown my Income Replacement so I'm not likely to lose the ability to use month-sized chunks during a job loss. I value the increased clarity and convenience from the larger chunks.)

      Like 2
    • dakinemaui Thanks and that is a good idea, though  am not sure if I have enough in my emergency fund to cover all my necessary bills, but in theory I would only need enough to cover the first two weeks of bills.  The other day-to-day spending categories are trickier.  I guess if I wanted to use the underfunded method to distribute my pay I'd have to split things like food, giving and car gas into two categories each, right?  (first pay and second pay).

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    • ukimagic209 The amount you would need to reallocate depends on your expenses after your first check (in 2-check months). (You already have the first part of the month covered with the previous month's income.) The idea is to provide enough funds to allow you to not have to budget either of your checks in the current month's area.

      Since your bi-weekly paydays shift relative to expenses throughout the month, an opportune time to switch is in the 3-check month. You only need to cover expenses in the last two weeks of the month from the EF, allowing you to push 2 checks into next month's area (your 2nd and 3rd checks).

      For most people, the major expenses occur in the first part of the month, greatly reducing the amount needed to reallocate (or save) to allow the transition.

      Like 1
    • ukimagic209 I wouldn't use Gas1/Gas2 categories. It doesn't work well with data entry (the default category is the one previously used), reports aren't consolidated, etc. I have done the partial-fill approach and it only took me a few minutes to rip down the list of around 80 categories. (That was with the old version of YNAB, so I didn't even have goals to make budgeting the second check a one-click endeavor.)  TIP: put the per-check increment right in the category name. 

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    • ukimagic209 I did as dakinemaui suggests and it really brought clarity 😊

      budgetting is so easy now.

      Like 2
  • It may feel a little weird at first to plan purchases out further than a year, or for some purchasing (like a TV, new bed, replacement sofa) even further than 5 years. Heck, it sometimes feels weird to plan purchases out for an entire year (Christmas, annual car insurance, etc) in the beginning.  But predicting the estimated large chunks that you're pretty sure you are going to need/spend and being able to break it down to the smallest regular monthly allocations is a major leap forward in adding stability to your budget. For electronics replacements/upgrades I'm estimating a need for $2,000 to 3,000 in the next 4 to 6 years and am able to allocate $50 a month to handle that. Super low-stress way to handle some bigger purchasing.

    Replacement electronics and replacement furnishings are the longest planning window categories in my budget. My next car purchase and retirement investing show as as monthly or annual expenses (those funds are in tax sheltered accounts, so they don't build up in my budget).

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    • HappyDance My furtherest (?) horizon is 2039. The sooner you start saving, the less you notice the impact.

      (Although this one still sucks up $100 per month. If I waited until closer, I'm certain I'd have to pay interest for my lack of foresight.)

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    • dakinemaui curious for your 2039 goal... 😊

      Tech (split up into different phones and computers) is my most far away specific horizon in the budget I think. I hope “loss of income” won’t be spent (and it doesn’t need more money at the moment) and “house” receives a percentage each month, but I don’t have a clear picture what it will be spent on yet.

      So your specific horizon pekkend my curiosity 😊. 

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      • TheTabby
      • Just a common cat trying to budget uncommonly well.
      • TheTabby
      • 1 yr ago
      • Reported - view

      Powder Blue Pony my guess its a roof replacement?  it's the only thing I can think of with a 20-year time horizon.  I'd definitely be interested in finding out if I'm right though.

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    • Powder Blue Pony peaked, not pekkend 🙄

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    • TheTabby it might well be.

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    • Powder Blue Pony Nothing terribly exciting... a new roof. (Great deduction, TheTabby !) 🙂 

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    • Powder Blue Pony piqued... 😛 

      Like 1
    • dakinemaui and TheTabby . Thanks! Of course. Silly of me. But glad I learned something again today.

      Like 1
  • Yeah, I'd say you need either an "electronics" category or something equivalent.  I haven't bothered to split mine out beyond a general "electronics" category, though your post makes me realize I may want to create specific computer, cell phone, and a general everything else category.

    Like 2
      • Bruce
      • Software Engineer
      • Bruce
      • 1 yr ago
      • 1
      • Reported - view

      TheTabby 

      TheTabby said:
      though your post makes me realize I may want to create specific computer, cell phone, and a general everything else category.

       I'm thinking the same thing.  I have a "Computer Supplies" (laser jet toner, paper, etc.) and a "Phone/Computer Replacement" category.  But after I laid out my future purchases above in this thread yesterday, I'm thinking I might make an Electronics Category Group and put each individual item in there as a category with its own goal.  If one thing needs to be purchased before its time, I can pull from another one that still (hopefully) has a couple years left.  'cause there's 4 computers, and 3 phones, not to mention a couple fitbit/garmin watches...  I think things could easily get lost/unaccounted for in one big category.

      Like 1
  • This is why I like reading through the forums. I've been using YNAB for about a year and a half and in that time frame I haven't had to buy any electronics, which is probably why I don't have a category set up for this. Being somewhat of a tech nerd, I'm surprised I didn't think of this before. But now that I've read this thread, I'm going to set one up ASAP! 

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  • Mine is called Gadgets and I keep it well stocked. I love me some gadgets.

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    • Superbone LOL, me too!

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  • dakinemaui said:
    an opportune time to switch is in the 3-check month

     That is brilliant!  There are two times (months) per year when I get that extra paycheck.  I'll have to see when the next one is due and plan to use that to help me get a month ahead.  In the past, I heard about this month-ahead thing but it always seemed out of reach and I never really knew how I'd accomplish it, though Hanna's YNAB videos

     ...are excellent BTW.

    For now, as far as using "underfunded" to automatically fully fund specific categories, I went through my "Paycheck Planner" spreadsheet (I only have 28 categories BTW) and I labeled each one paycheck 1 or paycheck 2.  Pretty much, bills due in the first half of the month, along with any immediate obligations (groceries, gas, etc.) are in pay 1 while true expenses and bills due at the end (or very early in the next month) are in paycheck 2.  Looks good on paper, so let's see how it goes!  

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  • As a follow-up, I really lucked out on the watch.  I mentioned needing to buy a replacement for my Apple Watch to my buddy and he said he promised his wife that he'd get rid of his.  His is a series 5 and mine was a series 3 (and that's what I was planning on getting as a replacement).  So I paid him $200, which is what I was going to pay, and got an upgrade... sweet! ⌚👍🏻😊

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