How do I actually budget, taking into account variable expenses?
July 30, 2014 3:31 PM Subscribe
I have been using Quicken to track my expenditures for more than ten years. But I'm stuck on how to use the information for budgeting, because every expense category is so variable. How do I do this? For the sake of this question, assume I'm trying to calculate the minimum salary I'd need from a new job.
posted by xo to Work & Money (11 answers total) 11 users marked this as a favorite
The expenses that are fixed seem to be only cell phone, trash collection, and health insurance. Everything else varies widely. For example, an extra cold winter creates a higher heating bill, as does a hotter summer and the electricity bill (A/C).
Then there are any number of one-time unexpected expenses, like someone breaking their glasses or having cavities or a crown break. If a child grows a shoe size in the middle of winter, that's another pair of snow boots. Four inches in the summer and that's a new bike. The car or the furnace or the fridge could break.
Then there are expected expenses that you know are going to come, but when? Like the roof needing repair/replacement, exterior housepaint, the driveway repaving.
So, how do I create a budget that allows for these variables?