Historically, I have not been good at following a budget. Every January, I set numbers and goals but usually stop looking at them after a couple of weeks. While you certainly don't have to follow a strict budget in order to be a savvy spender and saver, it can help you feel a sense of freedom when it comes to making "fun" purchases, like those for the home.
Now that I'm married and have someone else to hold me accountable to a budget, I've been taking it seriously. And I have seen a lot of freedom in it! At this point, I have about six months of budgeting under my belt and wanted to share what has worked for me when it comes to planning for home/interior purchases.
When Sean and I set our budget goals per category, I told him I needed a line item for furniture and home goods purchases. At first, he didn't really get it. Why would we need to buy something for the home every single month? It felt like I was asking for an allowance to constantly spend money in that category, when most people make the occasional large purchase for their homes.
I totally understand where he was coming from and feel that we will probably remove that line item (way) in the future when we have more of an established and furnished home. But right now, we're at a phase where we're building our home. We're building rooms and slowly collecting items that will travel with us from home to home. For that reason, it makes sense to use the concept of "building up" to a future home.
As someone in their mid-twenties with aggressive savings goals, I understand that it might seem irresponsible to think about spending money on things like curtains and lamps right now, when technically that money could have gone into savings. However, in my opinion, it would be a real tragedy to spend $0 on home goods right now, only to move into a home and face the daunting task of purchasing a lot of things at one time. I talked a little bit about that concept here in a post about shopping for a future space.
What Is An Interiors Budget?
The way the interiors budget works is to set a monthly spend goal that doesn't throw off your other savings or spending goals. If you're in the same boat as me (mid-twenties and growing in your career), it probably isn't financially responsible to set a spend amount that rivals any essentials like rent, groceries, insurance, etc. My number is low enough that I can't make any major purchases in a single month but high enough to allow for larger purchases if I were to save up 3-4 months in a row.
How An Interiors Budget Works
In short, sometimes you spend it and sometimes you don't. Either way, what is leftover carries over to the next month -- it doesn't go away or absorb into the greater budget. So, when you're setting your monthly spend amount, be sure to multiply it by twelve to make sure it totals an annual amount you're comfortable with.
Spend it: Sometimes, you spend the money allocated in the budget. For example, you need curtains for a room in your house and you can afford to purchase them all at one time with the monthly allotment. Sometimes, you see an amazing piece of artwork and know it will be something you keep for a while, so you make an "impulse" purchase, but you don't have to feel bad about it because the money was already allocated.
Another scenario? You're on Facebook Marketplace and spot something that's expensive but an amazing deal and just the piece you need. While some might say "too bad - not in the budget," I say that it is in the annual budget and worth back-saving for. If you are positive that it is worth it, buy it and don't save or spend in the interiors budget again until you've "paid it off." This can be a slippery slope, so only do it if you know it is a smart buying decision.
Save it: Sometimes, you need a new couch. Your monthly interiors budget is not likely to cover the expense of a couch. Instead of just purchasing a couch and feeling icky about spending a lot of money at once, save up using the money already set aside in your interiors budget. Sometimes, you need to purchase multiples of something, like dining room chairs. It is not wise to purchase one at a time because what happens if they're discontinued? Save up until you can purchase them all at once.
Additionally, you might know a big move is coming up. If you have some decision anxiety or would rather wait until you're in the space to make big purchases, SAVE! Set your interiors budget and keep the money in a separate account so you actually save it for the future purchases you'll need to make.
Caveat: Although our goal is to stick to the budget categories each month, sometimes we go over. This month, we have a lot of travel going on and we're having to eat out more than usual. So I decided to move the interiors budget into that category and forgo spending this month or saving it for next month. This is not ideal but happens from time to time! Try not to rely on the interiors budget to be your emergency fund for other line items. It really is important, although it is more flexible than other categories.
Why An Interiors Budget Benefits You Now & Later
Keep in mind that it is very much worth it to make smart purchases throughout the year instead of getting into a scenario where you're in an empty house, need furniture ASAP and have to make hasty purchasing decisions that you either don't love or that you could have found cheaper if you had more time. If you're sharing a budget with someone who might not understand the concept of the interiors budget and why it actually allows for smarter spending, explain this to them.
My motto: paying for a Uhaul is cheaper than starting from scratch. The interiors budget can still make sense if you're in a rental scenario or even if you're living across the country from somewhere you might live in the future. Making smart purchase decisions will benefit you now and later, even if you're not living somewhere you would consider to be permanent.
Of course, there are many scenarios where making consistent purchases for a home might not make sense, so if you're in one of those, just keep the concept in mind for the future! For example, if you're in a teeny rental apartment and know you'll be moving to a larger space eventually, don't make significant (price-wise) purchases to accommodate your small space. If I were in that scenario, I would set a very small interiors budget and invest in artwork and other items that work in spaces of all sizes. When I moved into somewhere bigger, my interiors budget would increase.
I hope this was helpful. The interiors budget has worked really well for me. I make smarter purchases and I don't feel bad about them! I don't have to clear small "in the moment" purchases with my spouse because we have allocated the budget for scenarios like that.
I could go on and on about how and why this works. Do you agree? Would you try it? Let me know!
Thanks for reading!