Making a budget

[brooke.jax.gia]

I was wondering if I could get some tips from yall on ways to make a budget and stick to it.

SO and I make decent money, yet we live paycheck to paycheck. I have never tried to make a budget before, let alone follow it, and I am 26. We have no credit card debt and our cars are paid for. So, it really blows my mind when I think about all of the wasted money and all of the trips I could be taking to Disney!!

Help!?!?!?!

 

[leadfootlevi]

You need to take some amount of time - daily or at least weekly - and figure out where your money is going. How much are you spending on lunches, groceries, gas, cell phone, cable...EVERYTHING. Every penny should be accounted for.

We did this by eliminating using cash. We pay for everything on CC (that we earn cash back from) and that made it easier to see where our money was going.

 

[brooke.jax.gia]

Just jotted down the basic bills that I pay out every month... there's about $2000 left over on a monthly basis after rent, daycare, cell, cable, internet & electric. Geeze!!! Now I guess I just need to figure out food & gas.

This is where I start stressing and want to run away from the budget!!

 

[leadfootlevi]

I know that stress...all too well. Keep going. It'll probably get worse before it gets better, but it WILL get better. Just keep your eye on the prize (DISNEY!)

 

[mom to minnie&mickey]

We are a one income family of four and this is what we do. My dh gets paid every 2 weeks and he brings home $500 cash for the next 2 weeks. Utilities, car, cc, insurance, taxes get paid separately. Our home is paid off. This is only for groceries, gas and any extras. It may not seem like a lot of money for a family but when you are paying everything in cash you stop to think about spending $5 on a fancy coffee, for example. I shop specials with coupons and we limit eating out to once a week, if any. I found that it is all the little extras that eat up most of the money (a coffee, chocolate bar, drink from vending machine etc.) The funny thing is that my fridge and cupboards are always full, we take the kids to McDonalds, buy them little things that they may see and want and don't feel we are on a budget. That being said, at times when the money runs out before the next paycheck it's no big deal, I just get some more from the bank because when you live with a budget there is always extra money available!

OP, every time you buy something, anything, write it down and what it cost. Even if cost $1. Do this on the same sheet of paper for one month (or 2 weeks). You will be amazed at what you see and the stupid things we ALL sometimes spend our money on. It will be tiresome but then you will have a starting point to see where you can save money. Good Luck.

 

[prncess674]

If you don't know where it is going and you just spend till it is gone I would start paying yourself first to force savings. I have my paycheck direct deposited to my Chase checking account and I have a savings account with ING. I am paid on the 1st and the 15th and I have it scheduled on the ING website for them to take $500 out of my Chase account on the 2nd and the 16th. I save a $1,000 month this way and never miss it. If an unexpected expense jumps in then I move it back, but I was like you and just spent till the end.

Before starting a budget you need to figure out where it is going. If you are using a debit or credit card download the last three months activity and start bucketing it to see where it really goes. I had an eye opener when I realized that one month I spent over $100 at Starbucks! The purchases seem small, but small purchases can add up to big dollars.

 

[brendaziz]

We're in the same boat right now. Trying to figure out where all our money goes!
I agree w/ pretty much all of the above. The one thing I'd say is- while it works for some people to use credit cards instead of cash, only do so if you can do it responsibly. If you think you might trip up and stop paying attention, cash is the way to go.
You'll be surprised at how much you spend on little things that add up. I agree w/ doing automatic savings withdrawals too. You won't miss it. And if you need it, it's there for you to use.
Have a set amount of cash and divvy it up so everyone has their own "free" money so there's no need to ask "permission" for a big mac

 

[HS3kids]

If you have $2000 left over a month, thats great! Now to see where it goes. Factor in how much you pay for gas monthly, and groceries, miscellaneous (gifts, oil changes, medical co-pays, church, newspapers, eating out, etc) See where you can cut back a little. Brown bag it to work a few times a week.

Are you a family of 3?
Is your child in diapers?

For a family of 3, groceries should be under $400 a month (IMO- we are a family of 5 with a dog and a cat and spend approx $500/month to feed us all, and this includes paper products and toiletries)
Take a look in your freezer and pantry. Then bust out the sales flyer for your grocery store and think up a few meals for the week using what you have on hand and what is on sale. (i.e. you have a box of pasta and a jar of sauce. onions, green peppers and ground beef are on sale= Make a pasta dish one night.) Pair sales items with coupons whenever possible for the most savings. I am not one of those people who can get $200 worth of groceries for $10, but I can save about $5-$10 per trip this way) Stick to your shopping list. Try store brands. (my store brands chocolate chip cookies taste better than chips ahoy- swear to God! and are cheaper!)
If your child is in diapers, try getting them at BJ;s Wholesale (with store coupon!) or wait for sales and stock up at other places.
Anything left over should be put into savings.
Right now I have direct deposit- $100 goes into savings every week, and $20 to a Christmas Club account, the rest goes into checking to pay bills, buy groceries, gas etc. Much easier when you dont really see the money, for me.
HTH a little! Good luck!

 

[brooke.jax.gia]

Thanks everyone for the ideas! Direct deposit isn't available to me at work, so I think I will use the envelope system for cash. I've heard this works well for a lot of people.

If you have $2000 left over a month, thats great! Now to see where it goes. Factor in how much you pay for gas monthly, and groceries, miscellaneous (gifts, oil changes, medical co-pays, church, newspapers, eating out, etc) See where you can cut back a little. Brown bag it to work a few times a week.

Are you a family of 3?
Is your child in diapers?

For a family of 3, groceries should be under $400 a month (IMO- we are a family of 5 with a dog and a cat and spend approx $500/month to feed us all, and this includes paper products and toiletries)
Take a look in your freezer and pantry. Then bust out the sales flyer for your grocery store and think up a few meals for the week using what you have on hand and what is on sale. (i.e. you have a box of pasta and a jar of sauce. onions, green peppers and ground beef are on sale= Make a pasta dish one night.) Pair sales items with coupons whenever possible for the most savings. I am not one of those people who can get $200 worth of groceries for $10, but I can save about $5-$10 per trip this way) Stick to your shopping list. Try store brands. (my store brands chocolate chip cookies taste better than chips ahoy- swear to God! and are cheaper!)
If your child is in diapers, try getting them at BJ;s Wholesale (with store coupon!) or wait for sales and stock up at other places.
Anything left over should be put into savings.
Right now I have direct deposit- $100 goes into savings every week, and $20 to a Christmas Club account, the rest goes into checking to pay bills, buy groceries, gas etc. Much easier when you dont really see the money, for me.
HTH a little! Good luck!

We are a family of 4 and one pup. DD is still in diapers, but she's getting a potty & panties for Christmas! I now have $400 in the budget for groceries a month, I usually only go shopping 1X a week and never spend over $100. This includes all non grocery items also like paper towels, diapers, etc.

Gas is a killer for us. SO typically is good for $50 a week, and me $100 a week. MUST.FIND.WAY.TO.LOWER.THAT.

 

[iNTeNSeBLue98]

For one month, or even two week, keep a log of everything you buy.

Examples: Do you get a fancy coffee drink every morning, rent a DVD a couple times a week? Buy a daily newspaper, donate to charity or get photos printed? Write it all down to see where the money goes.


Best tip above: Pay yourself first. If you're not already putting money into savings, pay yourself before you buy anything else. Put X amount in a savings account.

 

[crisi]

A killer for a lot of people is dining out. So watch that one closely. Its easy to drop $20 at McDonalds and $20 on pizza and then $100 at Outback in a week, and not pay attention to any of it.

Also, while you track, pay attention to how you buy. Do you want into Target for laundry detergent and come out with laundry detergent, a cute outfit for the kids, a candle, a DVD, a tube of lipstick, a Dove chocolate bar, and a copy of People? (why no, I've never done that....)

 

[pearlieq]

Do you want into Target for laundry detergent and come out with laundry detergent, a cute outfit for the kids, a candle, a DVD, a tube of lipstick, a Dove chocolate bar, and a copy of People? (why no, I've never done that....)

Wow...that doesn't ring any bells at all...no way...

OP, it might be worth it to think about how you want to manage your money. Some people like detailed budgets with a line item for everything. Some people like envelopes.

Some people do well with a more free-form budget where they take a certain amount off the top for savings/investments and then just leave the rest for living expenses and when it's gone it's gone. You have to be the type of person who will stop spending when the money runs out, but if you are, a lot of people find that easier and less intimidating than a formal "budget".

 

[Karenj2]

What's worked for me is a budgeting software called YNAB Pro (www.youneedabudget.com). The key, as others have said, is to budget every single thing you buy - from a stick of gum to a flat screen tv...

What I like about YNAB is that it helps to guide you away from living paycheck to paycheck. While using it, we've been able to sock away a good amount for an emergency fund, plus the fun stuff, like a "Christmas account", a vacation fund, etc.

 

[brooke.jax.gia]

Thanks again guys for all of the suggestions! I feel better about the whole situation and think making a budget will help my family to save some of our money.

 

[windycitymom]

Please check out Dave Ramsey, a financial guru. I have read a ton of personal finance books over the years, but Dave is my favorite!! We are almost done taking his Financial Peace University course through a local church and it has been awesome! I only wish Dave & FPU was around when I was 26. He is also offering a home study course, but I find the small group discussions just as rewarding as the DVDs. I don't know of anyone who has taken FPU and not liked it.

 

[njmom47]

You could pull your bank statement for the last few months and track your spending habits. Sometimes it's amazing where you can piddle away money!
Also, pay yourself! Having a savings account is sooo important! Any extra should go in there (if you do online banking, you can transfer it from one account to another...don't even have to go anywhere).

 

[malibuconlee]

If you are having a hard time figuring out a budget, but have enough to pay your bills and do everything else there is another train of thought. Pay yourself first. Put 10% minimum away each paycheck as savings.

We used to have a more strict budget when we were younger. Now we set savings goals and as long as those are met we can spend on fun things, eating out, trips as we see fit.

It's a place to start while you are tracking your spending to see where it's all going and places to cut back on. The key is to do it every time!

 

[vegasnative]

I've tired doing the envelope thing with cash and it just didn't work for me. Sometimes I would leave the house with just 1 envelope, say for groceries, and make a stop elsewhere, and didn't have 'that' envelope with me....uuugh.

So I did E Envelopes and I have been doing this for over a year now and it works great for me.

I have our budget just on a simple Word doc....every penny! We get paid twice a month, on the 15th and last of the month. I've budgeted certain bills to be paid on the 15th and others on the last day. But for both the 15th and the last day I have x amount going into my e envelopes for groceries and other.

Does that make sense? For example....when we get paid, I automatically deduct 350 from the balance, and move it into my grocery e envelope. So when I go to the grocery store, I swipe my debit card, but that amount then doesn't come off the main balance, it comes out of the e envelope for groceries.

Also, go through all your bills such as utilities and average them for the last year. I take $224 a month out of our pay and put it into our Avista (power co) e envelope. During the summer months our power bill is usually no more than $120 a month, but during the winter it can get up to $300, especially with Christmas lights on. The actual average was $188, but I went higher, and guess what...I have an extra $500 sitting in our Power com E envelope. Actually all of our e envelopes have grown because I did go slightly higher than the actual average. I can pull from them if I want to, but I haven't done so in awhile, it's kind of nice to have a beefed up checking account.

But the key is to account for every single penny, as has been mentioned on the thread several times.

I also agree with others about "paying yourself first". I have "savings" as an actual bill. So when we get paid, I transfer a certain percentage to our savings account, and it too is put into the budget.

 

[mickeyluv'r]

Although you may not hit Target - per say - one way to fight the urge to overspend is to use shopping lists. If you go to the store with a plan, and stick to it, that really helps. Send the family member who is better at this to do the shopping. SO much shopping nowadays is pure impulse.

A big area of budgeting I find is food. Not just eating out vs. eating at home. Eating healthy. (bear with me...I'll get to a budget oriented point) It is initially expensive to eat healthy foods, no doubt, and eating healthy foods is an investment; trading healthy foods for cheap junk is NOT a good trade off, IMO. McDonald's is NOT a money saver, IMO. Eating junk makes you eat more food. If you want to save money - really - think about WHAT you are eating. Try to eat more protein, seasonal veggies, and seasonal fresh fruits. Shop the perimeter of your grocery store - and pick wisely. Avoid prepared foods, refined sugar, white flour foods. Go with a list of what you want to buy. Even among healthy choices there is wide disrepancy. You can eat a healthy protein like beans - or one with high-end-imported gourmet meats. A few vegetarian meals can be a real budget stretcher!

Think the same way when you dine out. More whole foods are the way to go. I have found that by eating healthier foods, I'm able to save money. Another way to think about it is that a $4 plate of eggs (-even better, a veggie omlette) is MUCH better value than a $4 plate of syrup covered pancakes, or $4 worth of muffins. It will keep you full much longer.

Ironically, I find using grocery coupons does not save me money. The coupons are usually for junky foods that I don't normally buy. I DO save money though by hitting two different stores each week (or every other week) One store ALWAYS has low prices on milk and veggies. The other nearly ALWAYS has lower prices on things like toilet paper, cleaning products, and meat. Go figure?

Stay away from retail malls. You'll be amazed at what you don't need if you don't go shopping. Also, consider lifestyle choices, like your transportation. Is riding a bike to work a few days a week an option over gas and parking fees? Can you telecommute a few days each month? How much are you throwing away on ATM fees and the like? Late fees?

When you do buy durable goods, watch for big sales. Buy items you need - like men's dress shirts in bulk, so to speak, rather than paying full price because you spillled coffee on your only one. BUT - Be very CAREFUL not to get carried away stockpiling items you don't use. Look around your house - how many items do you have that you never use?

Also, LEARN prices. A "sale" does NOT equal the lowest price for an item. You have to know what the going price for that item is! Sometimes the 'sales' price is actually higher than the 'regular' price! (or the price you can find elsewhere)

Even if your work won't do direct deposit for you - you can pretty much do direct deposit on your own. When you cash your check - always deposit it a certain way - like put 20% into a savings account and 80% into the checking account. EVen if your employer deosn't really offer direct deposit - there may be a way to have one of the credit unions basically set up soemthing very similar. (IF you can use a credit union over a big commercial bank that charges lots of fees, so much the better).

 

[Leshaface]

Some great tips on here!!

I was just doing my budget, and am wondering about something...

Pretty much everything we buy is straight from checking (our debit card), so every month when I receive our checking statement, I write down next to the purchase what it's for (gas, utilities, groceries, dry cleaning, car maint., fast food, etc) then add up all same 'groups' and transfer the totals to a main budget ledger.

My question is (for anyone out there), how many 'columns' or 'groups' do you have? I have 48 available columns on my ledger and I use all 48! Is this getting a little carried away with separating groups??

I'm not sure if there might be something easier for me to do/use or if this is what the majority of people do??

Sorry for going a little OT OP, but maybe it can also help you too!