So far, I'm liking the three checking accounts for Bills, Everyday Expenses, and Discretionary. But then I realized there is a lot to cover under Discretionary.

It's one thing to see a $200 balance for Discretionary spending. But how much can we spend on a dinner out, and not go into money we'll need next month for the anti-allergen heater filters and a new carton of bubble mailers?

So I made up a budget within a budget, kind of a virtual envelope method for just that account. I have 17 categories and a slush fund, for everything from postage to cosmetics, to clothes, to batteries. When I make a deposit, each category gets a certain percentage. That way if our extra income isn't as high as I'd figured, all areas are hit equally. If more comes in than expected, all areas get a little boost.

It might sound cumbersome, but it's already giving me a better picture of what we can and can't afford.

A $5.99 CD sounds hardly worth worrying about, in relation to an overall monthly budget of $2500. It sounds somewhat less affordable in relation to a Discretionary fund of $200. It's obviously out of the question when the uncategorized Slush Fund has a balance of $3.21. Mailing a package Priority for $5.05 doesn't sound so bad, but Media Mail is obviously the way to go if there's only $2.50 in the Postage category.

Sounds overly detailed, I'm sure! But a penny saved is a penny earned; and tall oaks from tiny acorns grow. Hopefully this will help keep me from overspending and getting back into debt in the future.

I tried to do this in a spread sheet, but it was awkward because it doesn't all fit on one screen. I found these nice budget forms online, and now I'm using a Form 3 for each category.