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.