Question by John M: When estimating our family budget from previous years, which should I use- average/mean or median?
The family budget tool determines how much you’re really spending hourly, daily, weekly, monthly, and annually.Each year I try to refine our family budget a bit more. We have all of our expenses and income broken down by category. In coming up with estimated spending for each category, I’ve always used averages, but am wondering if medians are more accurate?
Ex: we spent an “average” of $ 218/month on entertainment last year but only a “median” of $ 207/month. For 2008, which should be used if our entertainment expenses are to remain relatively the same?
Best answer:
Answer by sneezy7231969
I just couldn’t imagine that $ 11 would make that much difference.
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I would use average. 12 times your monthly average will give you the yearly total which should be close to the next year’s total. If you know an expense will be higher this year like gasoline, you could increase that item.