Breaking down True Expenses into two subcategories

I thought I'd share a mental framework for YNAB categories as it relates to Rule 2: Embrace Your True Expenses. In my budget, I subdivide True Expenses into two parts: Scheduled True Expenses, and Unscheduled True Expenses.

Scheduled True Expenses are things I know are coming, with a fixed date, but don't fall into what I'd consider a monthly or annual bill or subscription (which are some of my other category groups). Things I have in this Category Group are: Car Registration (for each vehicle), Car Insurance (billed every 6 months), annual optometrist appointment, our pet licenses required by our city, our vehicle smog checks (every other year), and our passport renewals (every 10 years!).

My scheduled true expenses. You could also include things like annual subscriptions, but I keep those in a separate category group.

As you can see, things that have concrete dates tied to them, they're going to happen, and when they do, I'll have money to pay for them. Also, feel free to steal the date in the category name and organizing by date, I stole that organizational tip from someone else!

The second part is Unscheduled True Expenses - things that will definitely happen, but not necessarily in regular intervals. This would be car maintenance, gifts, medical expenses, dry cleaning, postage, out-of-town visitors, clothing, etc.

My Current Unscheduled True Expenses

Notice that this list is quite long, could probably be even longer, and contains lots of different kinds of things. There are really only four types of categories in YNAB.

(1) Savings Goals

(2) Monthly spending type categories (think bills)

(3) a non-monthly spending category tied to a specific date

(4) a non-monthly spending category not tied to a specific date.

Anything in group 4 could be considered an Unscheduled True Expense. With how large this group of categories could be, most people will find it helpful to subdivide out this group for organizational purposes. I myself am constantly tweaking what goes in here versus another more specific category group. Do what makes sense to you in your own budget.

I also have separate category groups for Home Expenses (which includes home maintenance and appliance replacement), which is really just another Unscheduled True Expense, but I find it more helpful to have a separate category group for this, simply for organizational purposes.

Other Category Groups I have that are really all either scheduled or unscheduled True Expenses: holiday funds, Christmas gifts, money for traveling around the holidays, and money for special occasions like birthdays or anniversaries.

I hope this spurs other people into thinking about their category organization this way. Get into that budget and embrace those True Expenses!