How do you MAKE yourself follow a monthly budget?

[shelle94]

Was it hard to do at first? This is the first budget I have ever made for myself and I'm having a hard time sticking to it. I need to save for my November trip, but the only money I have saved that I haven't dug into is change. I'm thinking about just getting a whole bunch of change everytime I cash my paycheck. Maybe that will work. I'm also thinking about opening a savings account that earns interest and is hard to take money out of.

Anyone have any suggestions? How do you do it?

 

[cdnmickeylover]

When I got a raise last year I put the extra money into an account at a bank that's difficult to access. I have a regular transfer set up to go into this bank account and I don't touch it. Sticking to a budget is hard so I figured it was going to be easy taking money that I never had so to speak and getting it out of spending range as quickly as possible. It's worked so far.

Cdnmickeylover

 

[Lisa P.]

It's hard at first but step back. When you want to spend on a short term pleasure, remember to take a moment to really think about what you are forfeiting in your longer term goal(s).

We've found that having separate bank accounts helps a lot. Payroll deductions into a credit union account (and declining the ATM card to go with it) kept us from accessing that account lightly. The only reminder of that money came with the payroll stub and monthly statements. When the amount reached whatever goal we'd determined, a large withdrawal was made to be used toward investments, expensive purchases (like a car) and/or trips.

Meanwhile, you may consider the old "envelope" method of spending for a while. Separate your spending money (food, gas, pocket, etc.) into envelopes. Keep those in your kitchen and only take out what you will need that day. Leave the credit cards and debit cards at home too. If you don't have the money to buy something, you simply can't buy it. You'll be surprised to learn how much you really didn't need, after all.

There are few things as rewarding as living without any debt and within your means. When you buy a car or vacation with cash, you still have regular payments to make, but you are making them ahead of time, rather than later. You earn interest, rather than pay interest on a loan!

Think about it. There are plenty of people around you who are living on much less than whatever you earn. If they can do it, so can you. Most of us make the mistake of spending on everything in our lifestyle and then considering how we will pay for it all. Realistically, we need to begin with what we earn and figure out how to meet our requirements/needs, first, then our desires/wants, last. It's a hard switch in thinking, if we've been doing it backwards. But, it's definitely worth it!

There are some budgeting materials by Larry Burkett, that we've also found very helpful. You may look in a bookstore for those. HTH!

 

[PugLover]

In my experiences the only way to follow a budget is self discipline and making the choice that you will control your money, it will not control you.

Just following that philosophy can really change your life in the finance department.

Budgeting to me means separating needs and wants. Being realistic is another huge factor. If you are only earning 30K per year the chances of saving 20K in ten months is not likely. Many budgets fail because of unrealistic goals. Frustration sets in when goals are not met and it is easy to throw in the towel. Start with small goals and as you accomplish them make larger ones.

DH and I have been married for four years. The first two years of our marriage we paid the bills as they came and put money into savings when we could. We never really thought about how our money was working for us. Two years ago we got serious about taking control of our finances and our lives (from a financial standpoint) have improved drastically and for the better.

Start simple and add up all your monthly income. From that sum subtract the necessities: housing payment, insurances, utilities, auto payment/gas/maintenance, medical needs, food, clothing, gifts, memberships, retirement and personal needs. The key to this is reviewing all your expenses and figuring out how you can trim their costs. I am a big fan of couponing for food and household needs, planning meals according to sales, cooking from scratch, stockpiling sale items and using leftovers. By doing that I have easily trimmed several hundred dollars off our food budget. About twice a year I spend a few hours calling all insurance companies to make sure we are still getting the best rates.

Once all your expenses are paid that fall into the "must pay" categories your leftover amount falls under discretionary funds. We decided 50% of all our "discretionary funds" would be put into a long term savings vehicle for a home purchase. No questions asked, that money is to be used for no other purchases.

The remaing 50% is divided between a new car fund and a vacation fund.

Of course if you have debt (credit card, student loan or the like) your budget may look different than that. We did have quite a bit of debt to pay off (car loan, student loan and some credit cards) and found the snowball method to work best for us. Snowballing your debt means focuisng on one debt first and channeling large amounts of money to that debt every month while paying only the min. due on the other debts. Once remove that initial debt, "snowball that money along with a min payment" to the next debt you choose to pay.

Also, the importance of an emergency fund is essential - 6 months of living expenses socked away that is not to be touched.

DH keeps a large plastic cup on his dresser and we deposit all our change in there every night. Every few months we use a coinstar machine and get anywhere from 75 - 150.00. Those funds are put in a holiday account for gifts for the Dec. holidays. It is an easy way to save several hundred dollars each year without really trying.

Debt usually occurs because of poor planning.

If you cant save then your money is controlling you, start controlling your money!

 

[beansmom]

while I agree that poor planning is part of the problem, I feel the other part is the 'keeping up with the JOneses' syndrome. Example: a co=worker recently sold TWO paid for homes (and mind you, she is over 40 and looking toward retirement) and purchased a $150k home just because it had a pool. I would have kept one of the paid fors and sold the other and put a pool in at the paid for house before going into debt again. But she wanted a 'better' neighborhood, newer, bigger house.

It's about simplifying and buying what you need rather than what you think you want. I'd LOVE to buy expensive things and not think twice but I can't. I clip coupons, try to conserve energy-hanging my quilts out to dry instead of running the dryer, use bleach only for house cleaning...so many little things you can do to save. Re-use plastic bags. It's really a mind-set--we rarely eat out. I scrapbook and that is sort of wasteful but I only buy my supplies on sale. I stay out of the stores.

We do have satellite tv but we rarely go to movies. We drive one newer vehicle and one that is 10 years old. We live in a trailer...it's not a palace but it's not a dump either. We don't buy lots of clothes (except for my daughter who always needs something new to perform in). It's possible but not always easy.

You gotta wrap your mind around it.

 

[C.Ann]

Right now I am planning a trip to Disney for the first two weeks of December.. As a Christmas gift to my grown DD and my granddaughter, I am paying for the entire trip (quite a feat considering my DH and I live on LESS than a shoestring!).. I have started selling items on eBay and I'm doing fantastic - considering it's just everyday "stuff".. I do NOT touch that money no matter what!!!!!!!! I have envelopes broken down into each of the expenses for the trips and I am slowly filling each one.. it's a real kick seeing that our tickets for MVMCP are now paid for - tickets to Sea World are paid for, tickets for US/IOA are paid for.. I also started a change jar and EVERYTHING goes in there - even pennies..

Now - the ONLY money my grown DD is going to need is "spending" money - BUT - she is AWFUL about budgeting and saving her money.. (Her DH is great at it - but she is definitely lacking in that area..) Sooooooo - every two weeks when she gets paid I make her drive all the way to my house (25 miles each way) and she has to give me "x" amount of dollars, that I then put in the envelope marked "DD's Spending Money".. No matter how hard she whines or cries, I will NOT let her take any of it out!! Any chance your Mom might do the same for you? If it's not within reach - and you have to beg, plead, and cry to get a penny of it, maybe that would work for you? I know it sounds a bit childish, but who cares???? The goal is to fulfill your dream of getting to Disney World and it's worth a shot - right?

Best of luck to you!!!

 

[PugLover]

Keeping up with the Jones is a huge problem for some people. Usually over time life experience and maturity changes that mindset.

It really depends on what your goals are. If you want to purchase a new vehicle and dont want the montly burden of a car payment then chances are you might be sacraficing a vacation that year. If a costly vacation is what you desire, you might realize that your "at home entertainment" budget must be trimmed quite a bit.

People often plan their spending on what they want, not what they can afford and that is so damaging both for the short and long term in so many areas.

Money is something you will always need and have to deal with, a necessary evil if you will. The sooner we learn to handle it in an effective manner is when it wont seem quite so evil.

It really is hard to judge others situation and why they make the choices they do. I have found it is best simply to learn from others mistakes and truimphs (from a financial standpoint) and to continue to tweak mine for a maximum return. It has to be a lifelong evolution.

 

[jlp651]

1. I have a "Holiday Club" account with my bank...I can't take anything from it...and it matures in October...each pay check I set aside a certain amount...
2. I add in any money that I'm not expecting to get (ie gift checks from work, birthday and holiday money etc...) I put that into the account too...
3. I save my change....I will break a dollar bill for 3 cents...its almost a whole extra dollar torward Disney!
4. When I start to get bummed that the trip isn't coming quick enough...I go buy Disney Dollars...or I roll change...
5. I don't go nuts spending $$$ the way I used to..If I really want something-I give myself 24 hours or more to think about it...if I really want it I'll splurge...that hasn't happened too often b/c there are somethings I really want to do on our trip...

I always make sure my bills are paid and there is $$$ in my Disney Fund!

 

[clutter]

I deposit my paychecks into my savings account. Then each month, I transfer my budgeted amount. I charge everything on my Disney Visa (used to be a ToysRUs one), and record it in my checkbook, so I can track my spending.

Any bonus checks, tax refunds, etc goes to an account that's inconvenient to get to. That's used for home repairs and Disney trips.

Good luck. It's hard work, but you can do it. I just went back to regular cable after 6 years of limited service ($13/mo v. 44/mo). Prepaid cell phone ($20 for 3 mos). Dinner's out only once a month, and pizza in only once or twice a month. We have to do a lot of fast food on our schedule, but it's the dollar menu! (Usually only for dd, I'll eat later at home.)

It's not budgeting, it's prioritizing.

 

[HunnyPots]

This is what works for us:
Every week, dh withdraws an "allowance" for each of us. His is very small but covers things like fast-food breakfast a couple of times a week, snacks, etc. He packs a lunch almost everyday. Mine is large enough to cover groceries and household supplies. We also give allowances to our two kids. We fill our gas tanks every Saturday and make that last all week. Before we pay any bills, we make a transfer to our savings account and write a check for our church contribution. Other than that, we don't write checks except for bills. In other words, we treat our cash allowance like it is the only money we have!

This has been great for many reasons. Here are just a few:
1. No impulse spending!
2. We know all the important things are covered.
3. We've lost weight, due to the fact that we hardly ever eat out now!

The main thing for us was to stop nickel and dimeing ourselves to death. It was shocking to see how much we spent every month on fast food and trips to Wal-Mart. Those little extras really add up.

And one more thing: Get rid of debit cards! Those things are pure evil! They make it much too easy to spend money on things you don't really need. Plus, it gets really easy to forget to write each one down in the checkbook. I speak from experience here!

I hope this helps. This system, though simple as it is, has been a life saver for us.

 

[frannn]

here's what I do (for me and DH):

Take more federal taxes out of our salary each week then necessary (I know we could be earning interest on that money, but we are not disciplined enought to save it), to get big refund for year end, to be used towards house/car repairs/vacation/bills

Have paycheck directly deposited into account, only take out budgeted amount for food, shopping, etc

Plan my food shopping around weekly sales

Only buy things either on sale, from ebay, flea market, dollar store

Forget about the $ in my savings account (It only exists for emergencies!)

Pay off credit card bills each month or with tax refund

Shop all year for birthdays, holidays, to get best prices and spread out cost

Go to WDW at least once a year, but budget the components, like car, plane, hotel (on site), passes, souvies

I still spend a lot, which I need to slow down (with three kids that will eventually need to go to college), but I've been thrifty since childhood, so we live in a beautiful house, but with a lot of bills!

 

[Abra Cat]

I have to agree with others who have suggested an automatic deposit into a vacation savings account. We've done this for a few years now, and what we don't see in our checking account, we don't miss.

Getting rid of the little "extras" can really help, too. Cutting back to a less expensive cable plan, cancelling the gym membership you never use, dropping long distance from your home phone bill and taking advantage of free long distance on your cell phone plan (if you have one), etc, all seem like small savings, but added together over time they can really add up. I just switched our checking account from a plan with a $9 a month fee to free checking, and I'm so excited that I'll be saving an extra $72 before our December trip to WDW— that's a character meal for our family!

One thing to really keep in mind when making a budget is, be realistic. Don't short change one catagory just to put aside extra money if you know you'll really need that money. Saying, "Well, I just won't go anywhere for fun, and I won't rent movies so I can save more money, so I don't need to budget for that" or "I'll eat Ramen Noodles 4 times a week" is unrealistic— you're going to be really bored. Spend money in moderation, look for free things to do, etc.

 

[beansmom]

shelle,

you might check out the forums at frugal-families.com and fractured.net ...both sights are geared toward having more quality, not quantity in life.

Also motley fool has a board called Living below your means.

 

[rachael95]

The book Financial Peace, by Dave Ramsey is a great place to start. He explains the envelope system, how to pay off debt using the debt snowball and has easy budget forms in the back of the book.

One thing to remember is to keep your budget simple. My DH loved doing the budget with Microsoft Money, but it was so detailed we couldn't stick with the budget. (we had categories for the filters for the a/c unit and batteries for the smoke detectors).

Once we switched to a simple budget and also started using the envelope system for a few things, it was like we'd gotten a several hundred dollar raise every month. We have an envelope for eating out, one for groceries, one for entertainment we both enjoy (movies, etc.) and an envelope each or our personal fun money. The personal fun money is used for things that only one or the other of us wants. It works great. We've been saving for Disney by the money that is left over in the envelopes each month. It encourages us to find those sales at the grocery store and to go to the 1$ theater instead of the regular theater.

Rachael

 

[shelle94]

Wow....thanks for all the tips. I think I'm going to go with a combination of things.

I just installed MS Money and I think I'm going to like it. I love how it shows long term effects of your budget. It looks like I can save a lot more than I thought if I really try. I live by myself and have a half-way decent paying job, but I didn't realize how far my money could go if I cut a few things out. I have had a budget on paper for the past 6 months or so, but I couldn't really SEE how it all comes together. I couldn't believe my eyes when I looked at those graphs. I can save that much by November?? Holy cow!

I'm also going to open up a Christmas club account and use only cash for day to day things. I hope if I see my savings going up on MS Money it will be easier to control my spending. And no more debit card. It's way too easy to use. I'm excited now. My personal loan and car loan will be paid off in September. The only debt I will have after that is $400 on my one and only credit card and my student loans. I will need to buy another car early next year. This one is junk. I would love to go a couple years without car payment, but I don't think this one will make it that long.

Meanwhile I will be socking money into my vacation fund and emergency fund. It's scary living paycheck to paycheck hoping nothing happens.

Thanks for all the help. You have all inspired me.

 

[prncess674]

I'm also going to open up a Christmas club account and use only cash for day to day things. I hope if I see my savings going up on MS Money it will be easier to control my spending. And no more debit card.

Debit Cards are not all evil if you use them responsibly. Also don't just become a cash junkie because it is hard to remember where you spent every dollar. I love my Debit Card and Credit Card (SPG AMEX, which I pay off every month and earn SPG Points) because I have a written record of every dollar I spend. Don't become a slave to the ATM because you dumped DC and CC. Make sure you have a system in place to account for your cash. I tried the cash system for a while and couldn't believe how many times I would hit up the ATM and at the end of the month when I received my bank statement I had no idea where all those $20 went. Load your last 6 months bank statements into MS Money or Quicken and really start looking where you money is going and what you are willing to give up. I realized I was spending money on things I could live without but also realized where money was going on things I couldn't live without. I spend close to $100 a month getting manicures and pedicures but I loved them too much to give them up but I found other things I could give up.

 

[shelle94]

I think every payday I will just take out a set amount in cash. This will be for groceries, fast food, and fun money. I get paid biweekly so I will really have to learn to stretch this money out. When it is gone that's it. I need to start saving receipts so I can track where the cash goes. I'm going to try to not use the ATM. I will not totally get rid of my debit card. I pay all of my bills online with it. I just won't carry it in my pocket every day like I have been.

I know occasionally things will come up that I haven't planned for. I know there's no way that I can totally stick to this budget, but I'm going to try to come close. My check is different everytime because I get shift differentials when I work certain jobs or certain hours. I put in a conservative number because I can't count on those differentials being there.

I have a couple of good things going for me. I walk to work so I probably use only about a full tank of gas every month. I'm not worried about groceries because I'm obsessed with couponing. I have a decent stockpile already.

I'm looking forward to this challenge now that I am organized. I'm even resisting that sale on towels at disneystore.com. It's a good deal, but I would rather spend that money when I get to Disney.

 

[ducklite]

First of all make sure your budget is realistic. Be sure to budget for items like gifts, oil changes, and doctors bills and throw in some mad money as well. If the budget is too tight you'll never be able to stick to it, and as soon as you break it you'll just get into the habit of doing so.

Next open a savings account that has an inconvenient branch and don't get an ATM card for the account. Mail a check every week to the account, and watch it grow.

Also rather than hitting the ATM for $20 three or more times a week, at the beginning of the week take $xx and that's it. It has to last for the week.

Anne

 

[jaw62901]

I hope that this helps.

When I decided that I wanted to go to WDW Dec 26 to Jan 3, I knew that it was going to be pricey and that I would need to set a budget.

After looking and looking for a "Disney" resort other than value resort I might want to stay at I found I nice AP rate at the Swan for a Club level room for $209.06 a night. Nice thing about this is that breakfast are now taken care of saving $200 there alone, plus I have already paid a $209.06 deposit on the reservation.

Like I said, I sat down and figured that for my 8 night 9 day stay, I would need a budget at around $2856 for everything. Keep in mind my airfare was taken care of allready. I also realized that even though nothing is due until checkin, I wanted all the money to be saved by the middle of November, so I wouldn't have to worry or think about this in December. Plus before I go I need to purchase an AP pass, so I will need that money with enough time to either get it at my local Disney store or order it from Disney.com.

So, I took the $2852 divided it by 7 and came up wth $408 as the figure that I need to save each month. Since some months I have $596 after everything is taken care of and sometimes $696, I know that $408 wont be a problem.

I know that I really want to go to WDW in December and if at anytime I think about buying something, I think about WDW and that urge goes away very quickly.

I hope this helps,

 

[Geebs]

" while I agree that poor planning is part of the problem, I feel the other part is the 'keeping up with the JOneses' syndrome. Example: a co=worker recently sold TWO paid for homes (and mind you, she is over 40 and looking toward retirement) and purchased a $150k home just because it had a pool. I would have kept one of the paid fors and sold the other and put a pool in at the paid for house before going into debt again. But she wanted a 'better' neighborhood, newer, bigger house."


i had to laughat this comment. $150 k for a big house with a pool...that is nothing!!! Being from New England, this would be a dream come true for us!!!! The condo that my husband and I live in costs that much!

Joking aside...there are some ways to save $$ and to budget!
Save change....this works and it doesn't take much effort. My father and I did that for a while ( he put in much much more than I did). In 16 months, we emptied out the jug ( a square watercoolr jug) and had $2400!!! yes..that is two thousand four hundred $$$!!!

here is something that my husband and I just did...we refianaced our mortgage. We got a much lower rate and our payments are now $180 a month less and that icluded rolling all of the closing costs in! over the course of a year...those savings will add up.

Try calling credit card companies and see if they will lower the interest rate...saving $10 a month will add up.

Try paying off at least one debt entirely and move to another.
We are doing that...we have paid 2 student loans off and are now working on finishing those.

Do a small part time job--- my husband cuts the lawn of an elderly lady every other week. It only takes about 3-4 hours and he makes $50 each time. This isn't alot of time out of our schedule and a nice little mad money!

hope these suggestions help!