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LESS IS MORE

  • Writer: Treavor Dodsworth CFP®, CPA, CKA®
    Treavor Dodsworth CFP®, CPA, CKA®
  • Jan 31
  • 2 min read

Some of the more frequent questions I receive have to do with how the budget app/spreadsheet should be structured. It is my opinion when it comes to categorizing transactions that less is more.

Less is more

Oftentimes I see a plethora of different categories and it can become a jumped mess. Below are a couple of ways to combat this.


First just simply use fewer categories. For example, you may be currently tracking auto insurance, auto repairs, husband gas, wife gas, car washes, etc. Just call it all Auto.


In my personal budget, I track Phone, Utilities, Eating Out, Vacation, Auto, Entertainment, Groceries, Health Insurance, and Misc. Now I do have other categories: Giving, Transfers, Capital Purchases but those other categories are not Lifestyle (except maybe Capital Purchases - we will save that for another post).


This brings me to the second point, set up your app/spreadsheet so it is very easy to see what you are spending on Lifestyle. If you have read any of my other posts, you may recall the five uses of money - Giving, Taxes, Debt, Lifestyle, and Savings. The app/spreadsheet should allow you to very quickly see what you are spending on Lifestyle each month. You could argue that there is really just one thing that you are tracking: Lifestyle. Lifestyle is separated out into the various categories Phone, Utilities, Eating Out, etc.


By no means do you have to use the categories I use but if things seem jumbled at least start with fewer categories. You may then decide to split it out based on your problem areas. For example, Misc is our problem area. It is usually me going to Hardware Stores. I could track this better by splitting out Hardware Stores from Misc.


Ultimately the app/spreadsheet is to help you better steward what you have. I have found less is more. Consider keeping it simple by at least starting with fewer categories and really seeking to track lifestyle specifically.

 
 

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