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?