Calling all Budgeting Experts..I have a question...

[ThreeMusketeers]

So, How do you do it? Budget your family's money that is...I have heard everything from people doing weekly budgets to yearly budgets. What is your plan * in detail* I am looking for some new teqniques.


Do you put unsceduled car maintence in on your yearly budgets? And whats your monthly allowance for you and your partner?

 

[tlbwriter]

I'm not an expert, but I have a suggestion anyway. It might help if you got Quicken, or some other similar program, and used it to keep track of where you spend your money. In fact, you could do it retroactively if you've saved your records (checks, CC receipts, etc.) It helps you plan for those non-regularly-occuring expenses, as well as the ones that occur unfrequently but at regular intervals.

 

[tbelfonti]

I am definitely not an expert but I have a pretty detailed budget plan.

Here's what we did and it's a bit confusing as dh gets paid weekly and I get paid monthly.

We have an excel spreadsheet that holds our budget categories (each a separate sheet): Utilities (including newspapers), Insurance (car, auto, life), Mortgage, Pet care (food purchased from vet, vet bills), Auto (includes car payment, gas, maintenance), Daycare (tuition for DD5, daycare for DD1, aftercare / holiday care for DD5), Food (groceries, eating out), Credit Card (I'll explain in a minute on this one), Extra Cash, Disney, Taxes (auto / home), House (maintenance, tools, etc), Savings. I'm sure I'm missing categories, but I don't have the spreadsheet here to confirm.

We use Microsoft Money so we can easily calculate how much is spent on each category per year.

We have figured out which categories get paid weekly (when DH gets paid) and which ones are monthly for when I get paid. For example, food is monthly so we put $XXX in the food budget for the month and when it's gone, it's gone. We "pay" each category (for example $500 / month for utilities). Then we deduct our bills from this. Sort of an online check register.

In Excel, we have a summary sheet that lists all the totals for each category and a grand total. That total should equal the checkbook register balance (and the balance within Microsoft Money). Yes, we keep three registers of our checkbook, but it works for us

Now for an explanation on the "credit card" category: We use our disney visa card for EVERYTHING we can and pay it off every month. What we do is save all our receipts throughout the week and weekly we sit down and enter them into Money. We also "transfer" money from each of the categories to the credit card category. For example if I spend $105 at the grocery store, we'd deduct $105 from Food and add $105 to credit card. This way at the end of the month we have the exact amount in that category as our statement says.

Now I realize we're a bit uptight about this - and the credit card category may seem a bit extreme. BUT, when we first started out we had CC debt - at one point more than $20K which was a LOT for us. We paid it off and vowed to ourselves and each other to never get in that hole again - and this is how we guarantee that we won't pay interest. We know before the bill comes that we have the cash ready to pay it off.

We use this system to save up for things as well. We want a new mattress set so we're going to start putting xx dollars away every check. And when we have enough, we'll go out and charge it and pay the bill off when it comes in.

HTH and let me know if you have any other questions.

 

[HaleyB]

We have a fairly workable budget. The first rule of budgeting is to save first (pay yourself first). We do, and it helps when those unexpected things come up. Because while it is nice to save money each month, if we need new tires instead at least we are not having to cut into our grocery money or our Disney money. We each spend about $25 a week for pocket money. Larger personal expense get worked into the budget.

We do not do an extreamly detailed budget-
Just
Mortgage
Utilities (which I level pay so they stay the same, mostly)
Savings- our emergancy account is fully funded (6 months worth of cash) so we save to our vacation fund, college funds, and a new car fund (we buy with cash whenever we can)
Insurance
Gas and oil changes
Entertainment
Groceries (including everything I buy there)
Fast Food (One night a week)
Nicer eating out (twice a month)
Gifts/birthdays
Pocket money/cash
Perscriptions/co-pays
Clothing/shoes
Donations and dues
Dance class (for daughter)
Scout fees (for son)
I may be forgetting something, but I think that is all of it.

Some things get rolled into savings some months- like gifts and birthdays. If we don't spend as much as we have budgeted for we save it. That is important, we used to spend it like found money and then we would come up short when there were more than normal expenses for something.

 

[clutter]

I deposit my paycheck into my savings account. (Pay yourself first!) Then each month, I transfer what my 'normal' monthly expenditures are into my checking account (bills, groceries, gas, incidentals). Then when anon-monthly expenditure comes up (semi-annual insurance, car maintenance, etc) I have money in my savings to transfer. If you can calculate that amount on an annual basis, you know how much you have to ensure gets saved each month. Personally, I put in as little as I could possibly need during the month, so I have to think about what I spend in order to cover the month.

 

[pearlieq]

We keep 2 Excel Files. One is a budget file and one is our checkbook register.

In the budget file I list out our total monthly income at the top, and then underneath it is listed all of our expenditures (mortgage, utilities, student loan payments, savings, spending money, etc.). The expenses are divided into two chunks, one for the first check and one for the second check of the month based on when they're due and how much they are.

I also include a transfer to short term savings for the monthly share of annual expenses (DVC dues, auto insurance, holiday spending, medical spending, clothes/shoes, auto maintenance (like the car repair you mentioned), and home maintenance). For example, if I expect medical expenses to be $600 for the year, we pay $50 each month to the short term savings account and then draw it out as necessary.

This is simplified, but it basically looks like this:

Monthly Income: $100

Check #1
Student Loan: $5
Auto Gas: $10
Electric: $5
Natural Gas: $5
Groceries: $10 (I pay for these by credit card but still record the budgeted amount in my checkbook register to "reserve" the money)
Spending Money (2 weeks): $5
Savings for annual expenses: $10

Check #2
Mortgage: $25
Spending Money (2 weeks): $5
Retirement Savings: $15
General Savings: $5


The Excel check register list just like the written one in your checkbook, but on the computer. Each time we get paid I record the deposit, then just copy and paste the budget items right underneath it. If there's any leftover after that (not usually because I budget pretty much down to the penny) we may put extra in savings or take a little extra for spending money.

Either way, it works well for us and helps me keep an handle on where our money is going.

ETA: To answer your question about spending money, DH and I each get $60 per week of our own money to cover lunches, personal gifts, recreation, and recreational shopping . We also take $80 per week for entertainment like eating out, movies, plays, etc. So, it's $800 per month all together.

 

[Chicago526]

Not an expert as we are still tweeking ours. But to get started, here's what we did.

Sit down and write down (or type in) EVERY expense you have for the month, down to the weekly pack of gum you buy at the newstand on the way to work. Total that and put it aside.

Then, think of the non-monthly bills you have. Do you pay your car insurance twice a year? Home owners or renters insurance once a year? Car registration once a year? Do you owe taxes when you file in April? Yearly vet bill when you take Fido in for his yearly check up? Oil changes once every three months? Donations to charity? Buying things from your kids school fundraisers? Think of EVERYTHING you can, pull out old checkbook logs or canceled checks to help remind you if needed. Add all this up and divide by 12. This is the monthly amount you need to put away for these types of expenses.

Add your montly expenses to the non-monthly expenses (divided by 12) and then add the amount you want to save each month. This is your total monthly expenses. If it is less than your net take home pay for the month, you're doing great! If it equal, then you may want to cut back in some areas slightly, as it's always a good idea to have a bit of "wiggle room" for truely unexpected expences (for instance we donated money to Katrina relief in August, obviously something we didn't plan on!). If your expences are MORE than your income, we'll, you've got a problem! Rework your budget until it balances.

Now, once you work it out on paper, how you manage it day to day to KEEP on budget is as individual as a fingerprint. The best system is one that you understand and is easy for you to stick to. If you make it too complicated or to difficult, then you'll abandon it after a few weeks or months.

As for car maintanence, well some things you can predict, others you can't. It also depends on how new your car is (the newer it is, the less likely major repairs are going to be, especially if it's still under warenty). Obviously yearly tune-ups and once-every-three-month oil changes are easy to plan for. But how much to set asside for unexpected repairs? Personaly, I think it's best to pick a large lump sum (say, $1,000) and save as much as you can each month until you get to $1,000. That's your car break down fund. If it breaks, pay the bill and start saving again until you hit $1,000 (or whatever). If your car really goes south and the repair bill is higher than what your car fund is, then you can dip into your emergency savings to make up the rest (or if it's really bad, use it towards a down payment on a new car!).

 

[TKERBELL]

About a week ago I had stumbled across a website that will help set up a budget and help you find where (in percentages) your money goes -
DH got a new job offer that will increase his annual salary by about 20% so I did the worksheets offered on this website with current income info and guesstimates on the future income - WOW I was truly impressed - They have all kinds of worksheets and budget ideas and forms....you get the picture!!!

The website is www.saygoodcredit.com

It's just a suggestion - I used Excel for a LOOOOONG time - I used plain old ledger sheets handwritten - anyway the idea is to find where all your money goes and really what the ideal percentage is and adjust it - and get rid of CC especially the Store Only ones (ie...Kohl's, Sears....etc) and try to use cash for your purchases - We have AMEX - has to be paid off at the end of the month every month and I earn travel rewards with it -

A SoapBox moment: We are all guilty of living in a world of "gotta have it now" that is the whole concept behind CC - At some point we do have to realize that we don't need it now. We need to learn to save our money for what we want.....And we all need to learn the differences between needs and wants...

Good luck in your budgeting adventure - believe me it is worth it in the long run -

 

[ThreeMusketeers]

Alot to take in..Thank you all so much for the time to write all that down. I appreciate it.

 

[disneysteve]

I'll try and give the short version of our routine.

I keep a spreadsheet for several of our monthly bills that vary from month to month: local and long distance phone, credit cards, gas, electric, and water. Each month when those bills come, I enter them on the spreadsheet and it calculates the monthly average.

Most of our bills, including those mentioned above, get paid automatically either by auto-withdrawal from our checking account or, when possible, by being charged to one of our two reward credit cards. In addition to the above, this also includes life and disability insurance, home equity loan payments, alarm, newspaper, Internet access and probably a couple of others I'm not thinking of right now. I keep a list on the cover of our checkbook with the amounts and dates of the recurring auto-charges so I don't forget to enter them each month.

I get paid every other Friday. 16% of my gross pay each check goes to savings. We fund 3 mutual fund accounts by auto-withdrawal from checking. We fund DD's 529 plan also automatically. The remainder of the 16% goes to our ROTH IRAs until they are maxed out for the year. After that, the surplus goes into our money market fund and from there gets invested in a variety of places. DW gets paid on the 15th and 30th. 75% of her gross goes to savings as well.

We pay for everything we possibly can with one of two reward credit cards. Of course, we pay the bills in full every month and never carry a balance. Nice of those companies to give us those free loans every month, isn't it.

That's basically it. The whole system has been essentially on autopilot for years now. I just keep track of everything as it moves along.

We don't have anything at all resembling an allowance. We spend what we need to spend. We are both pretty thrifty. Neither of us goes out and buys things we don't need. We both are very attentive to prices and if we need or want something particular, we won't buy it unless we feel we have found a good deal. The tremendous advantage of living below your means is that you don't have to worry about every penny you spend because you know you've got enough to cover what you need while simultaneously socking away a substantial portion of income for the future.

 

[ThreeMusketeers]

I'll try and give the short version of our routine.

I keep a spreadsheet for several of our monthly bills that vary from month to month: local and long distance phone, credit cards, gas, electric, and water. Each month when those bills come, I enter them on the spreadsheet and it calculates the monthly average.

Most of our bills, including those mentioned above, get paid automatically either by auto-withdrawal from our checking account or, when possible, by being charged to one of our two reward credit cards. In addition to the above, this also includes life and disability insurance, home equity loan payments, alarm, newspaper, Internet access and probably a couple of others I'm not thinking of right now. I keep a list on the cover of our checkbook with the amounts and dates of the recurring auto-charges so I don't forget to enter them each month.

I get paid every other Friday. 16% of my gross pay each check goes to savings. We fund 3 mutual fund accounts by auto-withdrawal from checking. We fund DD's 529 plan also automatically. The remainder of the 16% goes to our ROTH IRAs until they are maxed out for the year. After that, the surplus goes into our money market fund and from there gets invested in a variety of places. DW gets paid on the 15th and 30th. 75% of her gross goes to savings as well.

We pay for everything we possibly can with one of two reward credit cards. Of course, we pay the bills in full every month and never carry a balance. Nice of those companies to give us those free loans every month, isn't it.

That's basically it. The whole system has been essentially on autopilot for years now. I just keep track of everything as it moves along.

We don't have anything at all resembling an allowance. We spend what we need to spend. We are both pretty thrifty. Neither of us goes out and buys things we don't need. We both are very attentive to prices and if we need or want something particular, we won't buy it unless we feel we have found a good deal. The tremendous advantage of living below your means is that you don't have to worry about every penny you spend because you know you've got enough to cover what you need while simultaneously socking away a substantial portion of income for the future.

You always speak so eliquently and have such great advice! Thank you once again disneysteve!

 

[robsmom]

One other suggestion is to think about top down budgetting in addition to bottom up. Bottom up is look at what do you spend in each category each month and using this to determine the future spending. This is your starting point to see where your money is going. Equally important, however, can be to start with a blank piece of paper. List what your priorities and goals in life are. Be as honest with yourself as you can. Then as best possible put these goals/priorities in order. Then start with your income and say how much of what i have (percent wise) do i want to use for this priority. Ignore what it costs you now just say what would this be worth to me. Don't forget to make staying out of jail a priority, and financial security a priority and include taxes/insurance etc. When you are done, look at what you are really spending in that area versus your top down budget. How closely does your real spending match your goals. This tells you how/where to make changes. You list might include these type of things:

what you want in a home: live in a nice home, be in such and such neighborhood town, have 2/3/4/5 bedroom home, repairs, furniture,

what you want in retirement: have a secure retirement, travel/vacation, retire young/old?

What you want for your kids: send kid(s) to college, private school, activities

What you want for transportation: have a nice car, have a car that gets from a to b

What you want for entertainment: eat out, movies, shows, tv's, computer, electronics

What you want for travel: every year, rarely, 1st class or budget

what do i want for myself: vacation home, boat, time

 

[iNTeNSeBLue98]

I started using an Excel spreadsheet to keep track of expenses about a year ago - it's my bible now. I can't buy or commit to pay anything without consulting it first.

When I first created my budget I had general categories, then I'd look back and try to figure out where the money went and could remember what I was including. Eventually I had to be more detailed and now have more specific expenses charted.

Here's my list of recurring expenses.

HOUSING
rent
FOOD
Groceries
my lunch
DD lunch
DH lunch
Dining In/Out
SAVINGS
separate checking
direct deposit to savings
DH cash deposit to savings
Auto deposit to DH online bank
Auto deposit to DD online bank
UTILITIES
electricity
cable
wireless phone
land-line phone
AUTOMOBILE
auto loan
insurance
Gas
Maintenance
Car Wash
CREDIT CARDS
charge 1
charge 2
charge 3
etc.
etc.
LOANS
DH financed work tools
LIFESTYLE
Clothing/Shoes
haircuts
Recreation
Gifts & cards
Entertainment
MEDICAL
Dental
Medical
Optical
Pet Care & Supplies
HOUSEHOLD
other work Tools
newspaper
furnishings & supplies
Maintenance
postage
MISCELLANEOUS
anything that didn't fit it the categories above
one-time payments


I use our take-home pay as our base income figure. I'm salary, but DH is hourly and sometimes it varies. I keep two pages (could be one but I use Excel's formulas to lookup data). I track by week per our pay schedule, charting the amount due and the amount paid. I keep a running balance and always know how much money we have, when there might be more wiggle room or when we're cutting it close (I hate living paycheck to paycheck) And I'm more certain that the bills will be paid on time with my format. Excel gives me the freedom to cut/paste the expenses to the appropriate week if there simply won't be enough income expected to cover what's "due" in a particular week.


I used to frequently be a week late on many bills, then suffered the late payment fees of course. With my budget I haven't been late (not never) with most of our bills. Charge card balances are decreasing and I'm putting money in to savings (for Disney of course!) for the first time, I think ever.

 

[PlaneJoy1]

Now I realize we're a bit uptight about this - and the credit card category may seem a bit extreme. BUT, when we first started out we had CC debt - at one point more than $20K which was a LOT for us. We paid it off and vowed to ourselves and each other to never get in that hole again

HTH and let me know if you have any other questions.

Not to hi-jack the thread, but what was your strategy to paying of 20K in debt. I love ideas and success stories when I feel like I'm getting no where.

 

[tbelfonti]

Not to hi-jack the thread, but what was your strategy to paying of 20K in debt. I love ideas and success stories when I feel like I'm getting no where.

When we had all that debt, we had no budget, no concept of where our money was going.

We set up our budget and put every possible extra penny toward our debt. We stopped using our credit cards and focused on paying them off. Quite honestly it was many moons ago (7 years?) so I don't remember our specific strategy. I'm unsure if we focused on paying off one card at a time or took the money and divided it evenly among the cards.

Sorry I can't be of more assistance!

 

[dvcgirl]

We sit down at the beginning of each year and come up with every possible expense we can think of. Not included are auto maintenance and auto fuel as my business pays for those expenses. The remainder of the profits from the business are invested for retirement/future goals. We don't spend my salary at all because my DH's salary more than covers our expenses. Our expenses are low because we have no mortgage or car payments. This allows us to save a lot of our income. They key for us has been that instead of increasing our spending as our incomes have increased (and our expenses have gone down), we've stayed at the same percentage of monthly spending.

Here are our categories (below). We take each category and even if it isn't a monthly bill, we turn it into one. For example, we spend roughly $2,400 a year on our pets, and so we make that a $200 monthly "payment". We then look at what is left over at the end of each month. We give ourselves a liberal amount to spend each month (and we have never spent it), and then the remainder gets invested into an array of long term investments each month (automatically deducted from our account). What I like about our system is that once it's in place at the beginning of the year, the only figure we need to pay attention to is our monthly spending number (which we intentionally set high for us). As long as we never go over that number (we never have), there is always enough money in our account.

Usually the excess from monthly spending is enough to cover travel, but if we have a big trip or a major house project to complete that comes out of my DH quarterly bonus. We have some ideas for a couple of *major* house projects and that may require a couple of years of bonuses, but we'd save his bonus for that because we don't dip into investments for things like that.

Property taxes
Homeowners association fees
Homeowners insurance
Auto insurance
Electric/water/garbage (one bill)
Phone
Cell phones
Cable
Cable for internet
Pest control (we live in Florida...a must have)
Lawn/shrub care (fertilizing and pest...we cut ourselves)
Pool care
Medication co-pay
Physician visit co-pays
Pet care
Home maintenance
Groceries