We’ve all had that moment at the Target register when you realize you’ve just spent $300 on random crap when you just came in to buy paper towels. While it is amazingly convenient to get eggs and drain cleaner in the same stop, it can wreak havoc on your budget. I’ve been interested in this topic since I answered Sheila’s question about cleaning supplies a few weeks ago, so I used my Indy Star column and Fox 59 segment this week to come up with a new solution for this common budgeting frustration.
My Ideal Budget breaks spending down by category, 12% for food, 5% for clothing, 3% miscellaneous, etc. but when you buy everything at one store it can be hard to know how much was spent in each category. No one, seriously no one, has time to break down a $200 Meijer receipt into food, clothing, gifts, and miscellaneous. So what do you do? Just guess each time you go the store?
Guessing is rarely the answer, so I came up with a new solution: make [insert favorite box store here] a budget category. Likely this category will swallow up your food, clothing, miscellaneous, and/or gifts categories, but that’s okay. This new super category will help you budget more efficiently.
Let’s do an example to illustrate this new solution.
Situation: Married, two kids
Monthly Take-Home Pay: $6,500
12% Food Budget: $780
5% Clothing Budget: $325
3% Miscellaneous: $195
If your go-to store is Target and you buy everything there including food, clothing, and miscellaneous items it would be easier to just combine all three categories.
New Target Budget: $1,300
This next part is really important, you need to assess your behavior surrounding your trips to the store. Do you go once a week? Multiple times a week? Are your trips normally spontaneous or pre-planned? All of this information is important because a super category like this can really mess with your brain. On your first trip of the month you’ll know you have $1,300 to spend at Target so you’ll be less cautious with your purchases, but if you know you go to the store twice a week, you can set a smaller budget for yourself. Each of the eight trips you take to the store need to be under $160. Knowing your spending limit for each trip will help you spread the budget out over the whole month.
To hear more tips on creating a big box store budget, listen below as I walk Ray Cortopassi through this new budget solution on Fox 59.
You can also read my Indy Star column here.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.