Here's how we handle budgeting in 2022.  I have ours broken down into groups and then individual buckets.  I have fixed expenses at the top (I call it Bills).  I then have "Savings Goals" with individual target goals we create.  My third group is "Variable Expenses" which is everything that isn't fixed (everything we can move and shake around).  Here's what makes up each group.

Bills:  Home Cleaning, Electric, Propane Gas, Garbage, Water, Sewer, Car Insurance, Life Insurance (Term) and Other Insurance (Personal Articles, Umbrella and anything else we miss).

So Home Cleaning is a maid service.  We have a crew come every two weeks to blitz the house.  Electric and Life Insurance are monthly recurring.  Garbage/Water/Sewer are quarterly.  Car insurance every six months and Other insurance are annual.

Savings Goals: Investing, Homeowners Insurance, Holidays, Grandkids 529's, College Football tix for Penn State, Property Taxes, Closet upgrades, Wife Dental whitening, HSA and Roth IRA's.

Investing is for outside retirement.  We have built up accounts at TD Ameritrade and Vanguard for taxable investing.  We like to invest every pay period a portion of income received and I usually put those dollars in here.  Holidays is really for Christmas/EOY so we like to build up a buffer here and use Gifts in variable for the other gift giving times throughout the year.  The PSU tix, closets and wife dental are the current fun ones.

Variable Expenses: Auto, Charity, Dining, Entertainment, Gifts, Groceries, Personal Care, Household, Kids, Medical, Pets, Spending Money, Travel

Auto is anything maintenance and/or registration wise.  Household includes household items and home improvements.  If we come up with a bigger expesne like an appliance replacement it'll get its own category in savings goals and we'll funnel money there.  Medical is to fund expenses without having to touch the HSA so it can grow.  Pets is for the one fur baby.  Spending money eats up the catch-all.

So this is where we direct all of our dollars to.  Maybe this will give some people ideas if you're struggling with constructing a budget.  The setup of putting the fixed expenses in one group at the top of the budget followed by savings goals and then variable expenses forces us to budget top down.  So I make sure the fixed costs are covered and then we're saving before the rest of it.  Whatever's left after funding the first two groups gets allocated across the variable categories.  That way we don't miss a bill and we make sure we're saving on top of spending.

Good luck this month with your budget!

Ok let's start the new month off right.  If you're a first of the month budgeter you've got your new month to go after it.  One thing we've adjusted to over the years is the YNAB idea of not budgeting the income until it's sitting in the checking account.  I think from a practical standpoint it helps with not spending the money before we actually have it.  I do like to think of "where would I put that money" and obviously if you're a Dave Ramsey nerd it's hard not to forecast it but if you can get into a process of budgeting after the money posts you get a sense of "I actually have that money to use."  It's pretty powerful and it has worked for us.

So as far as where we sit today I'll start with a net worth overview.  I'm going to try to do this in terms of percentages instead of dollars because everyone's dollars are different but everyone's percentages could line up.  This is just a quick look of course.

We now own a company with 80 employees that makes up 50 percent of our net worth.  We've been blessed to have had a fantastic 2021 and hoping 2022 goes even better.

We own part of a commercial building that pays us monthly rent.  The building has no mortgage on it so the cash flow (taxed as regular income) pays for about 60 percent of our target spending on personal expenses.  The building is about 15 percent of our net worth.

Our primary residence is paid in full.  We were excited to write a check in November and pay it off.  The house is currently valued at about 10 percent of our net worth.  It took us 15 years and 10 months to pay it off and we built it in 2005 in the middle of the housing run up (bad time) but it's recovered well over the years and is worth about 40 percent more than what we paid for it in 2005.  We plan on living here as long as possible.

The other 25 percent of our net worth is in investments and cash.  We're able to fully fund our Roth 401k's (more on that later) and we save during the year to max our (backdoor) Roth IRA's and HSA.  We also have about 10 percent of our investment balance in liquid cash in an Ally savings account (it's really there to take care of our expenses while we distribute as much of our income as possible to giving, saving, spending and investing in after tax brokerage accounts).  I'll get more specific there down the road as well but with no debt it really frees us up to do a lot with the income we generate now. 

So that's the grand view update.  A lot of changes to be sure.  It's a long ways from where we were when we started this blog but in fifteen years you can really change your circumstances and we feel like we did it.  The biggest keys for us were staying on a plan and really focusing on one step forward as a time.  If you're a Dave baby stepper I can vouch for it being worth the effort.  We've done it and now we're sitting at Baby Step 7 and it's a lot more stress free at this end of the spectrum.  You hear so much conversation over the baby steps but if you can knock out the noise and just move through them one step at a time you'll be surprised where you are when you get to the end of it.  I hope this helps anyone that's working towards a goal.  You can absolutely get there.  Take it from a couple that was buried in six figures of consumer debt (twice) and had to dig out (twice) before it actually stuck.  You can do it!