Lending Club Blog

Tips for the Budget-Obsessed

As stereotypes go, those who create and follow a budget are often considered financially obsessed by those who don’t. To help you live up to that label, I offer the following idea:

One way to improve your budget is to take on even finer granularity. In addition to using more specific categories in your budget, you can also break down shopping trips in greater detail. You can see a classic example of this when you examine how you categorize your grocery shopping. I had traditionally categorized the entire purchase at the grocery store as “Food: Groceries.” The problem with such an approach is that I buy more than just food at the grocery store. Trips to Super Target, which has a full grocery store along with a regular Target, can get really complicated.

The easiest way to separate out food purchases from non-food purchases is to reconcile your receipts in your budgeting program as soon as possible after the shopping trip. Making this part of your shopping routine, perhaps as soon as you’ve unpacked the groceries, will make it seem like less of an inconvenience. I’ve tried collecting receipts and then entering them on a weekly or monthly basis, but that never seems to work as well for me. Even though doing so might take less total time, I’m more likely to have a few minutes after a shopping trip than a block of time to do all of my receipts later. Also, entering items when they’re fresh in your mind makes splitting receipts easier.

The extent to which you record your purchases is a personal matter. Some people are happy with basic tracking, while others like to drill down to the finest detail possible. With more detail comes more accuracy, so I urge you to create as many budget categories as is practical and then split purchases that fall into multiple categories appropriately. This way, you can get a handle on your finances by having the most accurate budget possible. In the process, perhaps you’ll find some extra money that you can lend out to Lending Club members.

Wednesday, January 30th, 2008 at 5:09 am

Comments (3)

  1. You can make splitting receipts easier by controlling how items are
    rang up @ the register. One way would be to separate items in your
    cart and place all grocery (or all non-grocery) on the belt first,
    pay attention to what the cashier is doing and ask for a subtotal
    (which will print on the receipt) when you get to the end of the
    first category. Depending on how much shopping you do at one time,
    you can make this even easier by getting two carts and placing
    groceries in one cart and non-groceries in the other, then ask for
    a subtotal after the first cart is rang up. Depending on how many
    categories you may be breaking your budget down by, you can ask for
    as many subtotals as you need during the process, then some simple
    math will allow your receipt to tell you what was spent in each
    category. This won’t break sales tax down for you, but you can
    either break that down on your own if you chose, or just set up a
    separate budget category for sales tax, (If you want to get really
    mad at the end of the year when you total up your various
    categories). How do you eat a whale? One bite at a time. Little
    things can make a big difference over time.

    February 2nd, 2008 at 5:28 am

  2. Mike Smith:

    That’s an excellent idea Dale. I’ve noticed that some grocery
    stores do the work for you by providing sub-totals automatically on
    your receipt. They’ll list fruits/vegetables, meats, dairy,
    household, etc. That makes things really simple!

    February 2nd, 2008 at 5:42 am

  3. SoulScorp:

    I buy 90 percent of my items on my debit card. My bank then
    calculates and breaks down all of the purchases throughout the year
    which I can extract into an excel spreadsheet. I have groceries,
    home maintenance etc all spread out. But what I haven’t figured out
    is how to break down those expenses listed on one receipt. Good
    point!

    November 30th, 2008 at 7:30 am

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