Budgeting Step 4: Setting up your flex spending

Last Updated: Jan 13, 2015 02:29PM EST
Now that you've set up your fixed costs and contributions to your priority goals, the number that remains is what's left for "Flex Spending" - things like shopping, eating out, entertainment, and groceries. The Flex Spending number is the basis for our One Number Strategy, which you can hear more about in this video.

Consider setting up separate checking accounts for your fixed and flex expenses so you have a better sense of how many flexible spending dollars you have remaining.

1. Start by adding folders to the "Flex Spending" section of your inbox according to your areas of spending. As you create these folders, leave the budget amount blank. We'll come to that in a second. Add the folders that matter most for you. Everyone's habits are different, so just make sure you name and set up these folders in a way that's logical for you.

2.  Head back over to the "Budget" tab and look at the number in the "Overview" section that says "Left to budget with." This is your magic number and what's left for flexible spending.

3. From here, click on "Flex Spending" to allocate the amount across your Flex Spending folders. Remember to look back at the "Overview" section to see how much you have left to allocate and refresh your page every so often to ensure you're looking at an accurate number. For now, use your best guess to allocate your Flex dollars across these folders. Over time, you'll be able to adjust the folders based on your spending patterns and goals. 

Remember that what's important is not how much you spend in each category, but making sure you don't go over your Flex Spending amount for each month.

Now that you've set up your budget, the next step is organizing your transactions so you can keep track of your spending month-to-month. 

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