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I have been trying budgeting for the last few years but always get overwhelmed by the amount of work - whether using notebooks, spreadsheets or apps. The biggest problem is that there is confusion in categorization of entries into buckets. I shop a lot in super markets and, in case of quick needs, in mom-n-pop stores. A same receipt might have entries for bread, shaving cream and laundry detergent. Now, how do I categorize this? I am not comfortable calling it all as "groceries" or "miscellaneous". But I find that splitting bills along with calculating the exact amount of tax on each and makes it an insurmountable hassle. Can someone please provide suggestions?

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    Supermarkets mostly give you an itemized receipt these days. Categorize it when you get home. Convenience stores may or may not depending on what kinds of registers they're using. As far as tax goes, I suggest ignoring it initially and calculating it later if you need it; you know how each kind of item is taxed, and you can just apply that to the total. – keshlam Dec 25 '14 at 17:47
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    Why don't you put sales tax into a separate bucket? – littleadv Dec 26 '14 at 0:37
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I think it really depends on why you are doing this, and the level of detail needed to achieve you goals. Beware of the perfect being the enemy of the good. There is a danger of making the process too much work, and so don't do any budgeting at all.

If you are just trying to figure out where your money is being spent, you might want to just start with some high level categories. In your example, either a single groceries category, or groceries and household. Do this for a few months and see if it is telling you what you need to know. If it turns out that a particular category is making up a disproportionate fraction of your budget, start breaking it out into several smaller categories. This can either be done just for new entries, or by also going back and recatogorizing older ones. You can expect to change things over time as well, as you spending patterns and lifestyle change. For instance buying a house (or simply moving into a new one) or having a child.

TL;DR: Fine a balance between the information your budget provides and the amount of work it takes to make it.

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Estimate. If ~80% of your purchase at Acme Supermarket was groceries, and ~20% household items, split the categorized spending 80/20 as an approximation. You can re-estimate every time you shop, or just use 80/20 every time.

You're doing this for household budgeting, not for audited tax returns for a multinational corporation. Let it go!

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