Do You Roll Over Budget Left-Overs or Save Them?
September 6, 2009 – 6:29 amDo you ever have leftovers in your budget? In other words, do you ever under-spend your budget, and if so what do you do with the proceeds. Most people probably work off of a monthly budget, which hopefully then rolls into a yearly budget. Since some expenses only appear once or twice a year (insurance, holidays), creating an annual budget with monthly check points seems to work well for most people.
My wife and I do this as well, but I’m curious to know what you do if you have money left over at the end of the year. As for my wife and I, it depends on the budget category. For the last few years we’ve done the following:
- My Wife’s Fun Money: we roll her unspent funds into next year’s budget. After all this isn’t corporate America, where you lose your budget if you don’t spend it.
- My Fun Money: I save anything I don’t use. I don’t view this as an incentive to use it by the end of the year though. I just enjoy saving, and if I didn’t need to spend it last year that’s no reason to carry it over to the following year. For me it’s like getting a raise. I like earning more money, but if I don’t need to spend more money to be happy why do it? I also don’t think a year going by automatically means I should spend more.
- Baby fund: we planned to roll our baby fund over to next year well (for clothes, toys, diapers, etc). We know we’ll have more expenses this year, an a lot of them may be one-time expenses or less frequent than annual expenses (like buying car seats twice in a 5-7 year period). We had a substantial amount from the fund left from last year, and due to the amount I would have otherwise put in the budget for this year my wife an I decided to save about half of the “rollover” amount. If we need additional money this year we’ll have it set aside, but we were blessed by friends and family with a bunch of expensive gifts that saved us from buying several items (2 car seats, 2 pack-n-plays, one or two swings, a bunch of clothes & toys, etc).
- Other Categories: we save any extra funds from the other categories. If we had a need for this money in next year’s budget we could add it, but as we see it our lives are happy with our current budget, so if we do under-spend our budget extra savings will help us reach our longer-term dreams more quickly!
Do what do you do with any extra money at the end of your year? Alternatively if you overspend, do you try to recoup those funds in your next year’s budget or just consider it lost forever?
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