My wife and I have put a monthly budget together using the Google Drive Budget Template. Pretty standard - Income section and Expenses section with rows allocated in each.
It makes most sense in my head to allocate every dollar within the budget, including savings. I found this older post about Savings being treated as Expenses. In fact, I do exactly what the top commentor said about the 4 main themes of transactions:
- Income - any money coming in each month (primarily paychecks)
- Expenses - any money going out grouped by the category of the transaction
- Deferred Spending - this is "savings" for the infrequent big ticket purchases during the year like Vacations, annual car insurance, annual service renewals, kid seasonal activites, future home upgrade purchases, etc. I have various "savings" accounts broken into these buckets so I can save a little month by month and then withdraw from them at the time when I need to do it when the bill is due
- Savings - mainly emergency, college
Here is a screenshot of an example template of what I'm doing. It's the planned/actual columns and on the next sheet is are the transactions.
How do I manage the deferred expenses/savings on my budget sheet? Am I overcomplicating it?
I feel like I'm double counting it if I add it as income. My intent is to make sure I'm tucking away each month so I don't have sticker shock during the month of the expense. However, I want to make sure I'm aware of how much I pull out of each account too so it's not like the money came out of nowhere.
This equation as mentioned in the post makes sense to me but I'm failing at executing how to do this
(income + money out of deferred spending) - (expenses + money into deferred spending + savings)
Thank you very much in advance!!