Another question, what's best way to handle fluctuating categories? For example dining out, I can go few months spending almost nothing then comes one month we go to a steakhouse for $300 etc. Is the strategy to set a yearly target of I need 1k for the year, and each month I'll assign according to this target. And when I spend small amounts it'll deduct from the available threshold and when spending more it should do the same. Is that a good way of budgeting for this? Or is there other ways

Here’s a simple way to think about handling fluctuating categories like dining out: Option 1: Set a Yearly Target • How it works: Decide how much you want to spend on dining out for the whole year (e.g., $1,000). Divide that amount by 12 months (about $83 per month) and assign that amount to your dining out category each month. • What happens: If you don’t spend much one month, the leftover money stays in the category and builds up. When you have a big expense, like a $300 steakhouse dinner, you’ll already have extra money saved up in the category to cover it. • Why it works: This method smooths out your spending over time and helps you prepare for months when you spend more. Option 2: Use a Flexible Monthly Budget • How it works: Instead of setting a yearly target, assign a smaller amount to dining out each month (e.g., $50). If you know a big expense is coming, like a steakhouse dinner, you can move money from other categories (like Fun Money or Miscellaneous) to cover it. • What happens: You adjust your budget as needed, moving money around to handle months with higher spending. • Why it works: This method gives you flexibility and keeps your budget responsive to your actual spending. Option 3: Create a "Dining Out Buffer" • How it works: Add extra money to your dining out category whenever you have leftover funds in other categories. Over time, this builds up a buffer for months when you spend more. • What happens: You don’t need to worry about overspending because you’ve already saved up for those bigger months. • Why it works: It’s like having a savings account just for dining out. Which Strategy is Best? • If your dining out spending is very unpredictable, Option 1 (Yearly Target) is great because it spreads the cost over the year. • If you prefer flexibility, Option 2 (Flexible Monthly Budget) works well because you can adjust as needed. • If you want to prepare for surprises, Option 3 (Dining Out Buffer) is helpful because it builds up extra funds over time. Takeaway: Pick the method that feels easiest for you to stick with. The key is to plan ahead and adjust your budget when things change. That way, you’re always ready for both small and big dining out expenses!

#1 is the standard way I believe

• How it works: Decide how much you want to spend on dining out for the whole year (e.g., $1,000). Divide that amount by 12 months (about $83 per month) and assign that amount to your dining out category each month.

• What happens: If you don’t spend much one month, the leftover money stays in the category and builds up. When you have a big expense, like a $300 steakhouse dinner, you’ll already have extra money saved up in the category to cover it.

• Why it works: This method smooths out your spending over time and helps you prepare for months when you spend more.