money management
Budget for Miscellaneous
By Crown Financial Ministries
CBNMoney.com
– The Miscellaneous category of the budget is everything not included in regular categories (Housing, Automobile, Clothing, Food, or Insurance). It is one category that eats up a lot of the money in budgets, and most families can never remember where that money was spent.
Budget allocation
Five percent of Net Spendable Income should be applied to the Miscellaneous category of budgets.
This category can include a myriad of items, ranging from daily snacks and vending machine soft drinks to Christmas and birthday gifts, haircuts, magazine subscriptions, and toiletries.
So, if the annual Net Spendable Income is $50,000, the Miscellaneous category should be allocated $48 per week or $2500 per year. If $700 is spent annually on Christmas, birthday, and special occasion gifts, this would leave just over $34 per week or $150 per month for all other miscellaneous expenditures.
Miscellaneous is the one category that generally develops creeping inflation because it is so easy to justify “borrowing” from one budget category in order to satisfy the latest or current need or obligation. However, seldom is the borrowed money ever replaced, which forces a shortfall in the category from which funds were borrowed. All too often this shortfall is reconciled by using credit cards.
Controlling Miscellaneous spending
The key to controlling the Miscellaneous category is to establish a realistic plan for careful spending and stick to it, not allowing it to grow out of proportion.
There is no substitute for self-discipline when it comes to miscellaneous spending.
To help assess how miscellaneous funds are spent, it may be helpful first to keep a diary of every expenditure for the next 30 days. Divide the diary into basic categories of a budget: Housing, Automobiles, Clothing, Food, Entertainment, and the rest.
Anything that does not fit logically into one of those categories is Miscellaneous. By the end of the month you will know how much Miscellaneous spending you have.
Then after you evaluate how much is being spent and compare that to how much should be spent on Miscellaneous, you can determine more effectively how to control Miscellaneous spending.
One of the most effective ways to control miscellaneous spending is to use envelopes.
Put into the Miscellaneous envelope the money that should be allocated for Miscellaneous from one pay period to the next. Then, as you spend it, write on the envelope where your money went.
When the money is gone, no more Miscellaneous spending will be allowed until the next Miscellaneous allocation.
“Know well the condition of your flocks, and pay attention to your herds” (Proverbs 27:23). You need to know the condition of your miscellaneous expenses and spend wisely, not allowing yourself to “cheat.”
Miscellaneous saving hints
There are numerous ways in which expenses allocated to the Miscellaneous category can be greatly reduced. The following is only a sampling of what can be done.
- Limit the amount of gifts given. Set money aside for gifts on a monthly basis in a savings account until the need arises (Christmas, birthdays, anniversaries, graduations, or other special occasions).
- Limit the amount of cash carried at any one time to no more than $10, if possible. The more that is carried, the more the temptation to spend the amount being carried.
- Guard against impulse buying. Don’t charge or finance anything that belongs in the Miscellaneous category. Save for it and pay cash.
- Set a weekly dollar limit for snacks and vending machine drinks and stick to it.
- Consider volunteering for day care service on off days in exchange for day care credit.
- Buy toiletries (toothpaste, razors, shampoo) and paper items in bulk at a retail warehouse or discount retail store.
Conclusion
Miscellaneous is the budget category that seems to grow at will and, unless it is held in check with disciplined spending, it can eat up a lot of money. You often have no idea where it went.
Although some of the items in the Miscellaneous category are predictable daily and monthly expenses, many more are unpredictable or are needed infrequently.
For this reason, self-discipline is mandatory to prevent miscellaneous spending from getting out of hand and growing out of proportion.
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