To prepare my 2022 budget realistically, I’ve taken some time going over what I spent in 2021. I use a budgeting app called YNAB, which keeps track of my spending and allows me to see reports at the end of the year. However, just seeing the numbers was not good enough for this task. I needed to see exactly what I spent my money on. So, I went over every single transaction. To say I was in a bit of shock is an understatement. As I suspected, most of my purchases were impulsive and media-driven. And although I single-handedly funded a planner small business, I will no longer be making impulsive, unintentional purchases.
Why all that work?
I needed to see the waste in my spending. It has allowed me to understand my weaknesses, and put into play a different behavior pattern. One way to do this is to make my budget as simple as possible.
How did I make it simple?
First, I decided on a monthly budget amount of $6,000. This amount would allow me to save enough money for my goal, while not being so austere that I would be miserable. Once I added up my fixed expenses, I subtracted that amount from the $6,000. Whatever was left was what I could spend for everything else.
My Simple 2022 Monthly Budget.
Fixed Expenses: Mortgage, Utilities, Insurance, Taxes, Cell Phone, Internet, Subscriptions $3,300.00
Variable Expenses: Food, Clothes, Gas, Pets, Personal Care, Gift giving, Entertainment, Vacation. $2,700.00
All other income, windfalls, cash gifts will go into savings. I will use the savings if an emergency should arise (house repair, car repair).
Pretty simple budget, right?
If I can stick to this simple formula, I have a chance at meeting my 2 years’ worth of expenses goal in cash savings. Having cash to use for expenses is a key part of our retirement plan (which I will touch on more in another post), so I’m pretty motivated to get it accomplished.
Have you created your 2022 budget? If so, how do you do it?
JOURNEY TO RETIREMENT 
Hi Sharon. Simple is good. I read some of the comments on your last post, and wanted to mention that I do like Janette does and use sinking funds as part of our budget. It was a life changer for us to start doing this. Our parents never taught us how to do. I think it will help a lot when we retire since we will be in the habit of doing it.
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Yes, absolutely. I use sinking funds on my app.
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Hi Sharon, So happy to see you back blogging. I think your budget looks very doable and I use sinking funds when I started retirement in 1968. The one thing I wished I had done is have more cash outside of my tax deferred 401k retirement and also in Roth accounts.
But where are you planning on putting all this cash? With inflation at 7% that cash buying power is eroding faster then ever. And interest is taxable? My neighbor, a retired IBM exec put me on to preferred divided stocks. So, The last three 1/2 years I have set up preferred stock with qualified dividend income stream in my non-retirement account and aggressively did Roth conversions to get a non taxable income stream . In the taxable account I hold these stocks for at least a year To take capital gains. In the Roth and traditional IRA I sale when the appreciation matches or exceeds the yearly interests . You should check out the tax advantages of qualified dividends. Sincerely, Lara
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Oops 1998 not 1968 I retired ! Sincerely, Lara
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Lara, Thanks so much! I will definitely look into it!
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If you do want to start purchasing look at how much is held by institutional investors. Also look at some of the dividend ETFS and mutual funds and what they call high dividend yield after their expenses! Sincerely, Lara
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