Hello, August!
August coffee date

Miscellaneous budget and spending deep dive

In a recent post about our current monthly budget I shared that our "Miscellaneous" spending category is one of the hardest to tame, and many people chimed in that they feel similarly. So, I wanted to do a Miscellaneous budget and spending deep-dive post to share how we manage this category, what's working well for us, and where we're trying to improve. Also, if you missed my current finances overview post from February that would be a great place to start.

Miscellaneous overview

This category encompasses nearly all of our household spending that isn't groceries or a fixed-cost bill, like our mortgage and car payment. I'll get into our specific sub-categories and spending in a minute but to give you an overview, currently Miscellaneous includes clothing, any purchases from Amazon and Target, gifts, family fun activities, and kids' activities. This category of spending has the most transactions each month, consistently wins the award of "most likely to be over budget," and often feels unwieldy while also leaving us not knowing where we can significantly cut back. Calling this category "miscellaneous" is purely semantics and is mostly inspired by the budgeting tool Mint that we use. In the past we've called this catch-all category "household supplies."

In theory there should be room for discretion in our miscellaneous spending. Most of what we buy in this category is "want to have" and not "need to have." So if we've bought new seasonal clothes for the kids, for example, we should slow down any spending for other unnecessary things, like going out to eat as a family. However, things seem to rarely work out that way!


Miscellaneous sub-categories

I've found a couple of helpful strategies for tracking Miscellaneous spending in Mint. The first is creating custom sub-categories. By default the Miscellaneous category in Mint doesn't have any sub-categories so it's ready for customization. I also discovered that you can choose to give a sub-category its own budget or you can just let the sub-category roll up to the main category. I think this will make a bit more sense in a minute. But first, here are the Miscellaneous sub-categories we have currently:

+ C Allowance and K Allowance (separate sub-categories): we budget $150/month of discretionary spending for each of us. This would be any eating out or going out with friends that we do on our own as well as other non-clothing purchases.

+ Family Fun: anything we do together as a family or even one parent with one or more kids. This could be going out to eat, going to a trampoline park, going to the movies, or renting a movie on a streaming service, etc.

+ Gifts

+ Haircuts

+ Health & Medical: any pharmacy purchases or co-pays. After collecting this spending data this year I might pull this out into a separate category. We also need to be better about using our HSA (health savings account) debit cards for these purchases.

+ Home Updates: any purchases related to improving our home including materials for home woodworking projects that Chris does, new sheets for beds, new furniture, materials for a small repair, etc.

+ Household Consumables: personal care items, cleaning supplies, etc. It can be hard to accurately capture this category because these items are often part of a bigger grocery purchase. But if I can easily separate out what we spent then I will so we have the data.

+ Kelsey/Chris Clothes & Shoes

+ Kid Clothes & Shoes: I assess all the kids' clothes and make needed purchases twice each year, ahead of the fall/winter and before the spring/summer. Our weather is so mild that we only need hot weather clothes and cool weather clothes. Shoes we buy as needed, which often seems to be more often than I expect! I've tried to shop in-person and online thrift stores to save money here but have come to the conclusion that I really dislike the time it takes to do so, and am often disappointed with the selection, even using online thrifting. So for now I stick to buying new clothes for the kids mostly from Primary, Target, and Old Navy.

+ Kids' Activities: field trip fees, school pictures, payment for any extracurricular activities like soccer and swimming lessons. For Mint users, there is already a default category called "Kid's Activities" but it's under the main category Kids and therefore would not be under Miscellaneous where I want it. So I created a new sub-category under Miscellaneous called "Kids' Activities" – note the placement of the apostrophe. Mint won't allow you to have two sub-categories with the same name.

+ School Lunch: reloading the boys' school lunch cards so they can buy two meals at school each week.

+ Yard & Maintenance: any materials or supplies for the outdoors plus any home services like a landscape service, which we get occasionally, or a plumber or other professional. This category does not include house cleaning which we get once per month and has its own separate budget.


Miscellaneous monthly budget

Recently, after reviewing a few months of data, we increased our Miscellaneous budget to $1,500, up from $1,160. Like I mentioned, you can choose to assign a budget, or monthly dollar amount, to a sub-category or not. If no budget is assigned then spending in that sub-category will just roll up to the main category, in this case Miscellaneous. For example, we have budgets of $150/month each assigned to C Allowance and K Allowance. I also assigned a budget of $60/month to the School Lunch category because I estimated that's how much we'd be spending. All the other sub-categories just roll up to Miscellaneous. So the monthly budget of $1,500 includes $300 for Chris's and my allowance spending, $60 for the boys' school lunch cards, and then $1,125 for everything else.


A few things that are working well

+ Categorizing all expenses: This goes for all transactions in Mint but I have been especially diligent with Miscellaneous spending and sub-categories. I am determined to carefully categorize all our spending this year so that we have a full year of great data. After we look back on our spending we might see where we can rein in spending, plus we might decide to create some additional sub-category budgets and/or we might pull some Miscellaneous sub-categories out into their own categories.

+ Adding details to Amazon, Target, and Venmo spending. This is a big one! In past years I tried to capture details in the notes section of a Mint transaction about what the heck all those Target purchases were. The problem is that this information is not visible at a glance. My solution: put the info right into the transaction description or name. The format I use is "Amazon: (details)", "Target: (details)", or "Venmo: (details)" where "details" is a brief description of the purchase like "clothes for Maeve" or "birthday gift for mom." Staying on top of this takes some diligence but I'm so glad I'll have this great info at the end of the year.

+ Splitting transactions. If a Target or Amazon purchase includes spending across Miscellaneous subcategories or even across Miscellaneous and a separate category, then I split the transaction in Mint and put the details in the description as described above.

+ Keeping all travel-related expenses out of Miscellaneous. A tricky scenario is spending when we're traveling. Should meals out while we're traveling be in the sub-category "Family Fun" like they would be if we're home? But then again, when we travel we eat out way more than when we're at home so it feels different. Plus, if we buy plane tickets one month that could eat up the majority of our Miscellaneous spending for the month. For now what we're doing is categorizing all travel-related spending, from airplane tickets to anything we purchase during a trip, as "Travel" which is a default Mint category. After collecting data this year we'll decide how to better manage and track that category next year.


Miscellaneous challenges

Above I wrote that it seems like we should have more discretion in Miscellaneous spending which would help us better stick to the budget. For example, if one month we register both boys for a season of soccer (sub-category Kids' Activities) that will be about $300, or a fifth of the general Miscellaneous budget. In theory we should then hold off on non-necessary Miscellaneous spending that month to balance out the budget. Sometimes we do this, like Chris or I holding off on buying new running shoes if it's already a spendy month, but often it feels like the other spending isn't a choice. Like a plumbing repair in the same month we buy back-to-school supplies or when we already have plans to go out to eat as a family (such as with a bigger group). With a home to manage and three kids to raise it feels like something to spend money on is always coming up.

Sometimes I will feel frustrated because our Miscellaneous budget will run over despite the long list of things I'm not buying (new running socks since mine are getting holes, a rug for the front room, finally framing a piece of art I bought several years ago...). Which perhaps leads to the challenge of wanting a lot of things. It must be true that the less you want, the less you'll spend. Despite valuing minimalism and not feeling like an overly materialistic person, I find myself with a perpetual list of things I'd love to spend money on. Not just for the sake of spending but to make a space in our home more functional or cozy, or to add to my capsule wardrobe, etc. All of it feels very intentional to me. Chris doesn't seem to keep as long of a mental wish list but when he does want something it tends to be more expensive, like concert tickets, a new instrument, or a new woodworking tool.

This is an area I've spent a fair amount of time reflecting on and talking to Chris about. I think some people are naturally more inclined to want things, and certainly we get messages of consumerism from childhood. I don't feel guilty about wanting to buy things. But I also want to have peace about what we do have and waiting to buy things – and mostly I do. But it's something to interrogate from time to time. When I do I often come away feeling even more content and with a quieter urge to check something off my to-buy list.


I'll wrap up this deep dive here. I hope this break-down was helpful, and I would love to hear any successful strategies or struggles with this category of spending.