Am I the only one without a "budget"?

[Lumiere Lover]

I don't budget, but I do have my payroll split into different savings accounts (college for kids, Christmas, Vacation, WDW Vacation) and just let it all drop into different buckets for when I need it.

 

[Planogirl]

But HOW would you "live it up?" A bigger house, a better car, more frequent/ lavish vacations, expensive outings, designer clothes... Americans have the attitude that a certain amount of money earned should equate to a certain lifestyle. That's how people get into financial trouble. That's how so many big lottery winners end up broke.

I would travel and I would donate money. But everyone is different.

I would definitely save a good portion first though, just not all of it.

 

[S. C.]

I guess this is the part I don't understand. "we just buy what we want and not have to really think about it".

I mean, like I said, we do pretty well, I've shared it in other threads and don't care about the number so I'll say it here......we make a bit over 300K a year. This year more like 312K. And like I said, we save 60% of our net income.

Uncle Sam takes his third....we'll save 125K this year. That gives us 85K a year after taxes to live on. We have no debt at all..... Our monthly bills, including groceries (and that's a generous 800 per month for 2 of us) is $2,435 per month. That leaves us a little over $4,500 in discretionary income each month.

would be very easy for us to live on 85k a year after taxes with no mortgage and no debt. For us that would be a spending spree.

We made per year just a little more than what you live on after taxes, but ours was BEFORE taxes. (both gm workers before retirement) We still managed to save and live comfortable with a mortgage and nice cars.



My Dad is 89 yrs old and lives on less than 12k a yr. Now that is a struggle.

 

[dvcgirl]

would be very easy for us to live on 85k a year after taxes with no mortgage and no debt. For us that would be a spending spree.

We made per year just a little more than what you live on after taxes, but ours was BEFORE taxes. (both gm workers before retirement) We still managed to save and live comfortable with a mortgage and nice cars.



My Dad is 89 yrs old and lives on less than 12k a yr. Now that is a struggle.

You're exactly right. It *is* very easy to live on 85K a year with no mortgage or debt. That's why we save so much. It's not like we're living in a hut sleeping on burlap bags. We may push the envelope a bit more than others in our income range by saving as much as we do, but what do we care? We're happy. Honestly, I know a lot of folks in our tax bracket and many live a much more luxurious lifestyle than we do. They obviously have different goals (or maybe no goals....who knows). They may intend to work longer or travel less in retirement....whatever. I know that to enjoy the kind of retirement we want....we need 4-5 million dollars.

You mentioned that you were both GM employees, and so you had pensions? And since you're retired, I'm guessing that you were lucky enough to retire for the proverbial Pooh hit the fan? If so, good for you. DH and I have no pension. But if you're bringing in roughly 80K now....in retirement, well, without that pension, you would have had to have saved about 1.5 million. That would provide you with about 60K a year and SS the other 20K per year.

And so, for those of us without pensions (most Americans), a large nest egg is needed. And most Americans aren't even close to having anything close to what they'd need.

It's interesting....because a lot of the folks on this thread who are saying "no, I don't budget" *are* living on a budget. They're saying things like....I save for retirement and put money in this account or that account and just "know" where the money is. But I don't have a budget. But that *is* a budget. You don't need to have a spending journal and record every pack of gum you purchase to be living on a "budget".

A budget is simply telling your money where to go. If you are contributing to an investment fund or savings account, paying your bills each month and not going into debt.....you have a budget.

 

[pixiechick]

where I live $85k would be okay, but no where near good.

and does any one care and or how anyone spends spare cash? That sounds like sour grapes to me.

the OP was about having a budget. The best planned millonaires have a budget. People have commented on trips and charities. My understanding is they contribute to both. Whats the big freaking deal?

 

[Swan4Me]

You did get your posters confused. Maybe if you'd been around for more than 2 years and not the *10* that I've been here....that wouldn't be the case. Geez...

Thanks for reminding me why I don't bother posting as much as I used to around here.

It's a waste of my time and effort.

Lucky Budget Boarders-getting so much of your Financial Info for TEN Years!

 

[HM]

Nope, we don't have a budget either.

 

[MEM]

Having a budget is a necessity in my household, especially since we live on one salary (mine) in a two-income economy in Greater Boston. I need to know where our money is being wasted in order to correct those spending habits. By having a strict budget we are able to live mortgage-free in a HCOLA, no car payment and three DVC contracts that we own free and clear.
Do I sometimes feel that the budget "sucks the life out of me"? Sure, I do, but I get over it. My salary is very modest for this part of the country, well below 6 figures.

Many of my colleagues at work have no budget. They eat out for three meals a day at least 5 days a week and wonder why they have no money to take a vacation?

 

[punkin]

There was a time when every penny was budgeted. Thank goodness, we are not so tight anymore. We still hold to a loose budget though, and if I absolutely had to (I sincerely hope I won't) I could go back to counting pennies.

 

[2disneyboys]

up until last fall DH & I didn't really have a "budget" per say. We knew what we made a month and what our basic expense were, both contributed to retirement accounts had very little credit card debt and a reasonable mortgage, and "some" money in savings. We started one of the "programs" more because our church offered it & we felt like, well, why not? , and in looking at our monthly income/expenses were SHOCKED but how much money we were just thoughtlessly (is this a word?) wasting. (we were "wasting" a month more than my mother MAKES a month..) When I say wasting, this s money that we could have been doing something with to change our future. There is nothing wrong with "living" it up and having fun etc I think the thing that we realised (for us) is that if you want to do the fun stuff, it needs to be a concious choice. As a result of some changes we have made just since Oct 2010, we are debt free execpt the house, well on our way to a fully funded emergency fund (our goal is 12 months of expenses.. we are almost 1/2 way there) and have bumped up our retirement savings. and yes, we still have fun, just not as much and we are FINE with it.

DVCGirl, IMHO, hit it on the nail (for us) We decieded to start using a budget, not to skimp and save money, but more to have open conversations about our goals, and the means to hit those goals.

A budget does not have to be tedious and specific... but FOR US we have found that it helps us to direct our vision to our goals. We still "live" it up now, actually, we feel like we are having more fun now than even this time last year...

 

[bumbershoot]

We don't have a budget either, but we are DINKs. Our income is high enough that we just buy what we want and not have to really think about it. And yes, we do save. lol

That's basically where my brother and sister in law are. Well, they are extremely thrifty when it comes to replacing things, or furnishing their house...they still have a room with furniture that was SIL's parent's until they upgraded and gave it to her...it's not offensive furniture and it's lasting forever, so they see no need to change it. They spent 3 years with a totally empty living room while searching for the PERFECT furniture for it. They will not spend money on junk or stuff that they'll replace quickly.

But when they find something they want, they buy it and it's done.

But they have absolutely no budget for groceries, dining out, etc etc, and don't need one.

 

[dvcgirl]

That's basically where my brother and sister in law are. Well, they are extremely thrifty when it comes to replacing things, or furnishing their house...they still have a room with furniture that was SIL's parent's until they upgraded and gave it to her...it's not offensive furniture and it's lasting forever, so they see no need to change it. They spent 3 years with a totally empty living room while searching for the PERFECT furniture for it. They will not spend money on junk or stuff that they'll replace quickly.

But when they find something they want, they buy it and it's done.

But they have absolutely no budget for groceries, dining out, etc etc, and don't need one.

Yes, for groceries or eating out....at some income levels, you may get to that point if you don't set a "strict" budget like we do. My older sister for example, she and her spouse earn more than DH and I do....she's the major breadwinner, a COO with a fortune 400 company. Her base in in the 300s, but with bonus and her spouse's salary they're in the 500-600 range.

They're a little more generous with monthly discretionary spending within their budget than we are, but they have a set llmit. Mainly, they set a huge savings goal from their "base", pay the monthly bills (no debt), and then with the bonus, they'll usually spend a portion on something "fun".....last year they purchased a "fractional ownership" in a home on Bald Head Island. Or...she'll buy a new car. Then they'll save the other half. And so, they're counting on the bonus to make up on the savings. So far, for them, that's worked. The bonus wasn't as great in 2009 and 2010, and so they saved almost the whole thing. In 2011 it was much better, hence the big purchase.

*But*....they can't just go out and buy anything they want whenever they want it, because they've designed a budget based on their base salary that includes aggressive savings. I had a conversation with her recently where she was telling me what a stressful week they'd had, and she had a conversation with her spouse and they said...."screw it, let's get that margarita maker from William-Sonoma".

My point is...they certainly have the money to buy that $400 machine, but they had to talk about it, and yes, figure out where they were pulling that from in the budget. If all of the "discretionary" income was gone for that month....I can guarantee you, they weren't getting it. What it meant was...."screw it, we'll get it, and we'll cut back somewhere else the rest of the month". Because they live their life according to a budget.

Like us, they don't sit down at the beginning of each month with a yellow pad and write out their bills. Our budget is set in January. Once a year. That's it. Once it's set, we're on autopilot and the only numbers I need to keep an eye on because they fluctuate are grocery spending and discretionary spending. That's it.

And then there's my extended family that lives in a different world, one without a real budget, where the money comes in, and the money goes out. They don't save anything and they think it terms of "payments". If they can afford the payment....they can afford the item.

My Aunt's husband called me earlier this month for advise on an iPad. He wanted to get one for my Aunt for Mother's Day. So, I talked him through the options....he called me from Best Buy....they were out. I called the Apple Store for him and found that they had one. I called him back....he hesitated, telling me, "well, I don't have a charge account with Apple, will they let you open one with them".

And so, here's a 56 year old man, who with his wife earns about 130-140K a year....and they spend every penny of it and have no idea where it goes. Not a clue. So much so, that at that age he has to make payments on a $500 item. That was astounding to me. He plans to retire in 2 years and he'll get 60% of his salary. My Aunt gets an annuity from the loss of a relative that ends in 3 years which will drop their income by another 30K a year. And so, in three years their income is in half. And they're completely unprepared.

They still have a mortgage and both drive cars purchased within the last two years...with payments. They are the average American Baby Boomer....and most of them are in the same boat.











That's how we roll in my family.

 

[nunzia]

You're exactly right. It *is* very easy to live on 85K a year with no mortgage or debt. That's why we save so much. It's not like we're living in a hut sleeping on burlap bags. We may push the envelope a bit more than others in our income range by saving as much as we do, but what do we care? We're happy. Honestly, I know a lot of folks in our tax bracket and many live a much more luxurious lifestyle than we do. They obviously have different goals (or maybe no goals....who knows). They may intend to work longer or travel less in retirement....whatever. I know that to enjoy the kind of retirement we want....we need 4-5 million dollars.

You mentioned that you were both GM employees, and so you had pensions? And since you're retired, I'm guessing that you were lucky enough to retire for the proverbial Pooh hit the fan? If so, good for you. DH and I have no pension. But if you're bringing in roughly 80K now....in retirement, well, without that pension, you would have had to have saved about 1.5 million. That would provide you with about 60K a year and SS the other 20K per year.

And so, for those of us without pensions (most Americans), a large nest egg is needed. And most Americans aren't even close to having anything close to what they'd need.

It's interesting....because a lot of the folks on this thread who are saying "no, I don't budget" *are* living on a budget. They're saying things like....I save for retirement and put money in this account or that account and just "know" where the money is. But I don't have a budget. But that *is* a budget. You don't need to have a spending journal and record every pack of gum you purchase to be living on a "budget".

A budget is simply telling your money where to go. If you are contributing to an investment fund or savings account, paying your bills each month and not going into debt.....you have a budget.

Amen..we do the best we feel we can and also have a balance with living in the now..and really..we will never get to where we want to be...never..even if we saved every penny. The future is so unpredictable..even more so now then it was for previous generations. So..we try and get that balance..probably have more of the 'now' then maybe we should..but our basic expenses are low, we live in a small community with a pretty low cost of living, our house will be paid off before we retire, so we just do the best we can and hope health and health care stay do-able.

 

[silmarg]

dvcgirl is spot on. I am a tax preparer in the NY Metro area. I see people who make 6, 7 or 8 figures per year and have very little in the way of a nest egg... Lots of folks want to "keep up with the Joneses" and buy nice houses, vacation homes, and lease extravagant cars. Some of whom are now looking to trade down on housing.

Others, like dvcgirl, understand that this sort of income can lead to true financial freedom that others can only dream of and have amassed nest eggs that are very impressive. Heck, I have seen folks that make a fourth of what dvcgirl's family makes and have very impressive nest eggs... which is not easy to do given the expenses in the NY metro area, but if you are disciplined, it can happen.

Its true that income is out of whack in the NY metro area (heck, the avg public school teacher in my district makes over $100k)... but expenses can easily get out of whack here as well (my property taxes are $16k/year for 1800sqft on a 107'x43' lot).

Like dvcgirl, I earn enough to own a larger home (even with the crazy property taxes here), but I have resisted keeping up with the Joneses and have decided that the home we have is fine for my family. The key to any budget, whether written down or just mental is to leave beneath your means so you can save for future goals and absorb any financial shocks that may take place. And as a tax man, everyone who can afford it should contribute the max to their 401(k), IRAs and 529 plans...

And to answer the OP, I personally dont do a formal budget!

 

[silmarg]

I know that to enjoy the kind of retirement we want....we need 4-5 million dollars.

You are spot on here as well...

There is a reason that GM and Chrysler went bankrupt... and why municipalities are in trouble now... Pensions and Retiree Medical.

These obligations are not cheap.

And for a person in the NY area without a traditional pension plan saving several million dollars will be the only way one can truly exit the workforce.

PS - I am not bashing GM and Chrysler... in fact, I am an avid fan of GM cars (in a part of a country where GM is not all that popular). In fact, I just bought a brand new Buick Regal Turbo this week - and I LOOOVE it!

 

[robsmom]

It's interesting....because a lot of the folks on this thread who are saying "no, I don't budget" *are* living on a budget. They're saying things like....I save for retirement and put money in this account or that account and just "know" where the money is. But I don't have a budget. But that *is* a budget. You don't need to have a spending journal and record every pack of gum you purchase to be living on a "budget".

A budget is simply telling your money where to go. If you are contributing to an investment fund or savings account, paying your bills each month and not going into debt.....you have a budget.

First let me say that I admire your dedication to savings. Even if it is easier on a higher income, it still takes discipline and foresight.

Your response above was exactly what i was thinking. Being on budget does not have to mean that you are stuggling, in fact it is what helps many to not struggle. A budget does not have to be a day to day tracking of everything, it can be weekly, monthly, annually. To me it is a plan for how you want to spend and/or save your money. I think if people know what they have coming in, set goals for the short and long term future, and know how they are going to reach those goals - they have a budget. Per dictionary.com


–noun
1. an estimate, often itemized, of expected income and expense for a given period in the future.
2. a plan of operations based on such an estimate.

 

[bellarella]

First let me say that I admire your dedication to savings. Even if it is easier on a higher income, it still takes discipline and foresight.

Your response above was exactly what i was thinking. Being on budget does not have to mean that you are stuggling, in fact it is what helps many to not struggle. A budget does not have to be a day to day tracking of everything, it can be weekly, monthly, annually. To me it is a plan for how you want to spend and/or save your money. I think if people know what they have coming in, set goals for the short and long term future, and know how they are going to reach those goals - they have a budget. Per dictionary.com


–noun
1. an estimate, often itemized, of expected income and expense for a given period in the future.
2. a plan of operations based on such an estimate.

However, the way the word "budget" was used in the OP did not capture this broad definition. The OP was talking about a detailed budget that gives line items for things like groceries, etc. This is what most people were responding to.

I agree that there are all sorts of ways to "budget." I work best in a three category "budget": savings, fixed expenses, everything else. This is not what most people would consider a "real" budget though. It works for me, and always has -- even when my paycheck was barely covered food and rent.

Some people do better when they don't need to think about money all the time -- a detailed budget lets them set up categories once a year (or some other broad time period) and then they can go on autopilot. When grocery money is gone, it's gone. When their insurance comes due, they have been saving each month for it and the money is there.

For me, that kind of budget is stressful. I know how much money can be spent on "not savings/fixed expenses" and don't worry about how it falls month to month. I know this system would stress other people out. Structure is a comfort to some and claustrophobic to others.

 

[Debbie]

dvcgirl is spot on. I am a tax preparer in the NY Metro area. I see people who make 6, 7 or 8 figures per year and have very little in the way of a nest egg... Lots of folks want to "keep up with the Joneses" and buy nice houses, vacation homes, and lease extravagant cars. Some of whom are now looking to trade down on housing.

Others, like dvcgirl, understand that this sort of income can lead to true financial freedom that others can only dream of and have amassed nest eggs that are very impressive. Heck, I have seen folks that make a fourth of what dvcgirl's family makes and have very impressive nest eggs... which is not easy to do given the expenses in the NY metro area, but if you are disciplined, it can happen.

Its true that income is out of whack in the NY metro area (heck, the avg public school teacher in my district makes over $100k)... but expenses can easily get out of whack here as well (my property taxes are $16k/year for 1800sqft on a 107'x43' lot).

Like dvcgirl, I earn enough to own a larger home (even with the crazy property taxes here), but I have resisted keeping up with the Joneses and have decided that the home we have is fine for my family. The key to any budget, whether written down or just mental is to leave beneath your means so you can save for future goals and absorb any financial shocks that may take place. And as a tax man, everyone who can afford it should contribute the max to their 401(k), IRAs and 529 plans...

And to answer the OP, I personally dont do a formal budget!

I don't do a written-in-stone budget either, but I'm still on the No Buy thread. It gives me a direction, and, budget or no, knowing where your money is going is the key.

First let me say that I admire your dedication to savings. Even if it is easier on a higher income, it still takes discipline and foresight.

Your response above was exactly what i was thinking. Being on budget does not have to mean that you are stuggling, in fact it is what helps many to not struggle. A budget does not have to be a day to day tracking of everything, it can be weekly, monthly, annually. To me it is a plan for how you want to spend and/or save your money. I think if people know what they have coming in, set goals for the short and long term future, and know how they are going to reach those goals - they have a budget. Per dictionary.com


–noun
1. an estimate, often itemized, of expected income and expense for a given period in the future.
2. a plan of operations based on such an estimate.

And I must add, I love when dvcgirl posts. She has her head on straight and tells it like it is-even when others don't want to hear it. Disneysteve (I think that that is right) was another poster that did so, although I don't think that I've seen him around much anymore.

 

[rockiesfan]

But we have goals...and one of those goals is to retire early, or at least cut back significantly on the amount of hours we work....and to travel more.

. . . . .

If we do cut back on work in our early 50s we're going to need to plan to carry our own health insurance....and I sure as heck don't see those premiums going down....do you? And finally, once we do slow down....we're going to want to travel *more*....because we'll have more free time.

Once we do hit our mid 60s....do you think we're going to get anything close to what we've been promised for Social Security....I don't. And that's not even what really concerns me....what really concerns me is the means testing that will take place for Medicare premiums for people in our tax bracket. We're preparing for that as well.

. . . . .

Also consider that two millions dollars in a nest egg today will *spend* more like *one* million dollars 25 years from now thanks to inflation. So, that's a factor as well. So, the nest egg number goes up.

This pretty much sums up our thoughts about retirement savings. We have no debt and live comfortably, so future retirement and college costs are why we stick to a budget.

And yes, we do a line item budget; it works for us. I don't know how to quote two posters at once, but I bellarella's comment "Structure is a comfort to some and claustrophobic to others."

 

[Disneyliscious]

I dont have a budget and never have. I dont have a savings account, retirement account and dont have one dollar put back for retirement.

I watched my parents work their whole life to secure a comfy nest egg of real estate and now watch them as they struggle to pay their bills (and they still have the real estate, which is worth nothing these days). They have rental homes and renters dont have jobs. Renters cant pay, my parents dont "get paid". On top of that it costs an average of $200 per renter to go through the courts to have them evicted, then there are repairs to the homes, etc.

I dont have any bills other than my utilities and a cell phone. I pay my bills and dont do much else. We take a very nice trip to Disney every 2 or 3 years, that I am able to do with my income tax return. I am a single mother with no money to set aside for anything.

Sure I could set that income tax money back in a savings account....for the possibility the economy collapses, or that I die and cant take it with me. But for me, I'd rather spend it now, with my kids...fulfilling their wishes and seeing them enjoy their childhood for we never know when they will no longer be with us.

I have a very carefree life and as a family we enjoy it very much. I live on a farm and grow most of our food (vegetables, fruit, and meat). I guess one could see that as budgeting but to me its a way of life. Its just normal. Its what you do, when give the chance. It was my opportunity in life to be blessed with never having to buy meat and rarely vegetables. Many others are blessed with great jobs they worked hard for. Living from the land is my 'job' and I feel very fortunate at the life it gives me. Money isn't a 'staple' in our life. Its not a priority.

Sure we have hard days, weeks, months. But we know that down the road the 'Magic' is coming. (We all love Disney). We dont go out to eat very much, we never go to the movies (2 trips to the movies could buy us a Disney park ticket), and we shop very thrifty.

I understand my lifestyle isnt for everyone. But for me, having no money is one thing. Having no money and bills due is another. I dont have either and I still feel very fortunate.

As a single mom I make less than $10 per hour and my kids just asked for a 2 week trip to Disney. We'll be there. Mom will make the magic happen and they know it. Life is truly wonderful. My oldest will be 18 this year. It will probably be the last vacation I take with my boys before my oldest ventures into a life of his own. I want those memories more than I want money in the bank. Im greedy. Im selfish. Im a MOM.

For those who do save, I admire and respect you all a great deal. Someday I may do the same, but not today.