[Prospector]

I do something like that for our household budget. My wife and I have setup 25 different categories of expenses (mortgage, utilities, groceries, medical, etc) and each category gets a monthly allocation based on historical or anticipated needs. The total of all allocations equals our combined household income. I try to keep the allocations fixed from one month to the next, with occasional adjustments as necessary. My income is pretty much fixed so that forms the basis of all the allocations, whereas my wife's income varies so we use it as "infill".

Bookkeeping is done with MS Money - every expense incurred is charged to one of the categories and a running tabulation of all categories is accomplished using the software. Each category is a separate running total so you can see how you are doing by studying the numbers. It does take some discipline to maintain but has worked well for us going on 20 years now.

Data entry is done by me on a weekly basis, and monthly allocations are adjusted as necessary. Also funds can be transferred from one category to another as need arises.

Yes, the budget does indeed include personal allocations for both my wife and I (and I highly recommend that your wife's allocation is at least 30% greater than yours - it makes for much better relations). There is also a category for savings (which makes it pretty clear to us just how little we actually have). We also have included a few special savings categories that I call 'Funds'. Saving for a new car? Check the balance in the Car Fund. Vacation? - Vacation Fund. In laws coming to visit? How's that Getaway Fund doing.

The greatest benefit we have found is the ability to see exactly where our income is going which greatly assists us in making financial decisions.