This may seem like such a silly question, but how did you actually determine what your cap should be for each category? I have a detailed budget, but given how tight things often feel, I’m starting to wonder if some of these caps are too high.
I recommend two “budgets”—backward and forward facing. First, review the last 3-12 months of spending to find consistent categories. Then, use those insights to create a predictive budget. Recalibrate monthly and adjust for changes. Include a flex fund for extra cushion.
As much as possible, I would base it on past expenses so that you are starting with realistic figures. Once it’s laid out, if you are exceeding your income or budget goals, you can start to tighten the screws from there, but at least you’ve got something to work from.
I plan my finances for the whole year. I know my annual net pay, then I start subtracting my known expenses. Then any goals (maybe travel money, extra investments). Then my variables like groceries, shopping, entertainment is divided up between what’s left over.
My budget spreadsheet shows estimated monthly totals and actual totals for each month. At the end of each month, during the review, I adjust the estimates if necessary to better reflect spending patterns.
Did it wrong. You start with your all in income, remove mandatory expenses i.e. rent/mortgage etc… After thats removed budget savings. The remainder is what you can assign out.
@JOSH
That is what I did
So if you are hitting the savings target, what are you worried about?