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Fin Tip# 3: Get Rid Of The “MISC” Line Item

 

So a budget serves as a monthly roadmap to determine what and where you are spending your money. The purpose is to help track where you are overspending and what areas you can possibly reign in. I see people include a “misc” line item in their budget all the time but this doesn’t make a whole lot of sense to me. It kinda defeats the purpose of tracking spending.

I also find that it becomes a “catch-all” category especially if we go over our budget in one area and we then proceed to slide overages into misc lol. A big part of having a budget, for me anyway, is to harness self control and improve my organization skills so I’m not wondering what happened to my hard earned dollars at the end of the month!

I like to have set categories for everything, I’m posting my full budget at the end of January so you can see what I’m talking about (stay tuned for that!). There are some expenses that come up that is hard to categorize so here some tips:

  1. What “realm” does the item belong in? So I used UBER twice this weekend and that was not necessarily planned but hey it’s life and the unexpected happens all the time. So instead of throwing the $5.34 into a misc category , I just include it in my transportation budget for the month. Or if I took money out of my account for laundry, I would lump that in with household expenses.
  2. Account for categories you spend in on average.  Some folks like to budget for each item and not necessarily a category which is totally fine but of course this can vary from month to month so its good to review previous months budgets to see what you’ve spent on average. This can help for future planning and you can prepare better for what you may spend on in the coming months.

Do you have any other budgeting tips when it comes to a “misc” category? Please share below as I am always on the look out for how I can make my budget better!

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