Well everyone a new year is now upon us and I must say that I am looking forward to 2012. I am not sure what this year holds for me just yet but I have a positive outlook with regards to everything, especially my finances.
I am always working on my budget and I give it a tweak or two every couple of months because I believe that a budget needs to change as your financial situation changes. This year I am using a combination of the rollover budget and the zero based budget to track my income and expenses over the whole year.
I will still use a monthly zero based budget where I have a certain amount set for each category and where total income will equal the total expenses for that month. I am also using a rollover budget, where any unused funds will roll over to the next month to form a base for the next month’s spending.
img from quizzle.com
In my case I am using a hybrid of the two because my zero based budget will be tracked via spreadsheet (and a bit through Mint) but I will also allow any unused funds in each spending category to roll over to the next month. Everything will continue rolling over until the end of 2012 so that I can have a total figure for the year, as well as an average for each month.
I am mainly doing this because I want to have an idea of how much I really spend and bring in during one full year. I have been allowing Mint to reset my spending to zero every month but this did not give me a clear picture of what I really spent on gas, for example. There were some months the bill was below $50 and other months where it was above $50 but since I never kept a running total I am not sure what my average really was.
This rolling budget for one year should give me a better idea of what I actually spend and that should help when it comes time to tweak the budget for 2013!!!!
I know that many people will say you cannot combine the two types of budgets because you should have a zero at the end of the month for the zero based budget and a rollover budget implies that you did not reach zero. In my case I will be doing the zero based budget in my spreadsheet where I track all my receipts and will be applying the rollover to Mint.
I also use Mint.com to budget. Previously I only used a handful of categories and put everything else in the “everything else” bucket. I didn’t want to be too rigid for fear that it would make it too difficult to stick with. I found a lot of money disappearing in this mysterious bucket and I was missing savings opportunities. It might take a little extra time but I think it will help save money!
wish you good luck for your budget plans in 2012 …
Interesting to read about your budgeting plans for 2012. Looking forward to seeing how it shapes out. I have also always maintained a rollover budget, which really helped me last year during the holidays.
-Jean
I am planning some changes to the way I budget as well, the biggest being how I handle budgeting for recurring expenses such as utilities, insurance and the like. Right now I keep a substantial cash reserve that I think has actually gotten a little too big. We’ll see how things go. I look forward to reading your updates!
I’m really bad with finances and budgeting, so I decided to start using Mint.com a few months ago. It takes a bit of time to get used to the process and it’s not really an exciting and interesting, but it definitely helps to save money.
Mint.com is by far one of the flashiest, sleekest, most-web-2.0-ish personal finance applications to hit the market in quite some time. Mint.com is free. But this time I won’t say you get what you pay for, because you actually get some very nice functionality.
Interesting to learn about your rollover budget for 2012. I am very poor in all these, so I guess I will have a lot to learn from you.
It has been nice and interesting to follow your budget under 2011 and I wish you all the best for your budget work for 2012.