Making a budget

[vegasnative]

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!

I have 17 columns as you call them. Well 17 different columns. I have 15 columns on the 15th (1st payday) and 8 on the last day of the month (2nd payday)...we get paid twice a month.

These are examples of our columns....mortgage, Dh's truck, my car, groceries**, power co., Ing**. savings acct.**, water, trash, sewer, allstate, comcast, hair care, sharebuilder**, other**

The ones with ** behind them are duplicated, so I actually set aside money from both paychecks for each of these items.

The 'other' column I put money into each payday and that is used for eating out, or clothes, or school stuff/sports.

Basically the way I do it, (I don't know if you read my previous post) but I use these "columns" as e envelopes. So when I get paid I allocate x amount into each column. For example...the first payday I put $125 into the 'other' column. So the money comes off the main balance but it is "budgeted". make sense? This method, it may seem odd, but it has helped us tremendously. We have ended up saving, and paying off debt, and beefing up the checking acct. It's been great. A bit tedious at times to move money into different e envelopes/columns/categories but if anyone is serious about getting on a budget and giving it a go, I say try my madness.

 

[Leshaface]

I have 17 columns as you call them. Well 17 different columns. I have 15 columns on the 15th (1st payday) and 8 on the last day of the month (2nd payday)...we get paid twice a month.

These are examples of our columns....mortgage, Dh's truck, my car, groceries**, power co., Ing**. savings acct.**, water, trash, sewer, allstate, comcast, hair care, sharebuilder**, other**

The ones with ** behind them are duplicated, so I actually set aside money from both paychecks for each of these items.

The 'other' column I put money into each payday and that is used for eating out, or clothes, or school stuff/sports.

Basically the way I do it, (I don't know if you read my previous post) but I use these "columns" as e envelopes. So when I get paid I allocate x amount into each column. For example...the first payday I put $125 into the 'other' column. So the money comes off the main balance but it is "budgeted". make sense? This method, it may seem odd, but it has helped us tremendously. We have ended up saving, and paying off debt, and beefing up the checking acct. It's been great. A bit tedious at times to move money into different e envelopes/columns/categories but if anyone is serious about getting on a budget and giving it a go, I say try my madness.

Because of you, i'm downloading the free trial of YNAB So in your opinion, is it worth the $60? Is it a one time fee?

I think I may have a little OCD because i don't have just a 'food' column; I have groceries, fast food, and restaurants It's just so I know how much a month i'm spending on sit down restaurants vs fast food places like taco bell etc..

 

[zulemara]

you guys should check out mint.com

I started using it in June because i wanted to track exactly how much I was spending on gas, groceries, eating out, etc. Using the data from that I was able to know on a monthly basis how much money I need for certain things and it has worked out great. I still use it, but for the most part I don't really need to anymore because I have things planned out well. Check it out, it can really help!

edit: I should add that mint.com is completely free and basically will link to your bank account and automatically track spending. You can setup budgets, classify transactions, add manual transactions(for the times u use cash) etc.

 

[minnie1928]

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.

Girl, do you get commission from YNAB?! You should after all these years!

While Karen is partial to YNAB, I myself like Quicken. Regardless of what system you use, the most important thing is to find one that works for you. If you can't find a style that truly works, then you'll be back where you started. I would start simple and as you get more comfortable with what you're doing then go a little more complex/detailed. Another thing to remember is that budgets are meant to be adjusted periodically...especially in the earlier stages. Once you get the hang of things it should become second nature.

 

[minnie1928]

you guys should check out mint.com

I started using it in June because i wanted to track exactly how much I was spending on gas, groceries, eating out, etc. Using the data from that I was able to know on a monthly basis how much money I need for certain things and it has worked out great. I still use it, but for the most part I don't really need to anymore because I have things planned out well. Check it out, it can really help!

edit: I should add that mint.com is completely free and basically will link to your bank account and automatically track spending. You can setup budgets, classify transactions, add manual transactions(for the times u use cash) etc.

I've heard some good things about mint.com, however not all banks are setup for it. I'm still waiting for my mom's bank to be eligible.

 

[minnie1928]

I think I may have a little OCD because i don't have just a 'food' column; I have groceries, fast food, and restaurants It's just so I know how much a month i'm spending on sit down restaurants vs fast food places like taco bell etc..

If you want to know that level of detail, then there's nothing wrong with that. I use 2categories, one for groceries and one for eating out.

 

[Leshaface]

If you want to know that level of detail, then there's nothing wrong with that. I use 2categories, one for groceries and one for eating out.

Phew...thought I was gonna have to check myself in somewhere!!

 

[vegasnative]

Because of you, i'm downloading the free trial of YNAB So in your opinion, is it worth the $60? Is it a one time fee?

I think I may have a little OCD because i don't have just a 'food' column; I have groceries, fast food, and restaurants It's just so I know how much a month i'm spending on sit down restaurants vs fast food places like taco bell etc..

I've never used it and didn't even know it existed until just now. I just do it all myself on a simple Word doc. I think I might be a little OCD with the budget too, because like I said it can be tedious at times, well really only on paydays when I start moving money into my E envelopes. But I swear by my madness, it totally works for me.

 

[vegasnative]

Another thing to remember is that budgets are meant to be adjusted periodically...especially in the earlier stages. Once you get the hang of things it should become second nature.

YES! I adjust my budget all the time. While we were paying off cc debt, I was only putting a small percentage into savings each month. Once the first card got paid off, I snowballed but I also bumped the savings percentage up. So with the 2nd card we were paying more on IT than we were when we had 2 cards in debt, but not quite as much TOTAL to cc debt as when we had debts on the 2 cards. I shifted some of that money to savings each month. Then when that was paid I upped the savings percentage again....I'm now working on our travel trailer. So when that is paid, I will up the savings percentage again. It's all the same money amount in the budget because every dollar must be accounted for, but yes this is a good piece of advice, budgets do need to be adjusted.

 

[iNTeNSeBLue98]

My budget is set up as an Excel document. I began this the year after my DH lost his job and we fell behind. I tracked spending for a few months and then used that as my example for the following year. I plan the ENTIRE YEAR in advance. Does that make me OCD? (I can't believe I haven't set up for 2011 yet - usually done in October).

Unfortunately we still live paycheck to paycheck. I have my sheet set up with 2 columns for each week (we're both paid weekly), one is what's expected and one actual, with a total at month's end for record keeping. I clearly see where those extra expense have been. In the first column is a list for each expense/category. I keep a running balance across the bottom that lets me know if I will have a shortfall or surplus. I can then adjust the weekly numbers to meet due dates and stay on track. It has helped us stay on budget and pay bills on time.

 

[DawnM]

Karen and a few others recommended YNAB to me and I love it. So much easier than carrying around cash envelopes (or realizing I left them at home and have no way to pay without a debit card).


I still have some things I don't quite "get" with YNAB, but overall, as long as that bottom line on the monthly spending matches our income, I don't worry about it.

You "assign jobs" to your dollars. So, even the amount we put in savings is given the "job" of going into savings. Every dollar is accounted for.

ETA: I do YNAB now, but we started this journey years ago to pay off all debt (and it is GONE other than the house) and to get a solid 6 month emergency fund saved (we have surpassed that now!) Honestly, the more solid our finances are, the less I want to spend....it is odd.

Dawn

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.

 

[MommyBell08]

Last year my husband and I decided to make a budget too! We had some cc debt and are cars and just now almost pd off, so you are a great step ahead of a lot of ppl not having those bills. We know how much we need for out monthly bills so we take that amount and anything over goes toward paying off the cars or savings. This has worked great for us, and know that we have a budget and went to all the work to stick to it this past year, its much harder to break. Good Luck!

 

[DWGal210]

This really resonated with me! I thnk my budget problem is I try to be TOO detailed, and for me that hasn't been working. Last night, I figured out what I need to save each week for mortgage, cash savings & vacation savings - that will go into savings each week and the rest is for the miscellaneous, varying expenses. When it's gone, it's gone!!

THANK YOU for this post! It made budgeting "click" for me so thank you!!!

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".

 

[meloneyb21]

I love watching Til Debt Do Us Part on CNBC and she just follows a simple formula which I never did until I started watching.

Total Income - Fixed Expenses - Debt Repayment - Savings = Variable Expenses.

Variable Expenses are things that vary throughout the month, sometimes you have them, sometimes you don't. Basically just stuff. Break your variables up into envelopes (like pet supplies, entertainment, gifts) and get to the end of the month before you get to the end of the money.

Since you don't really have any debt, you could put more towards savings.

 

[Karenj2]

Because of you, i'm downloading the free trial of YNAB So in your opinion, is it worth the $60? Is it a one time fee? When I bought it, it was $40, but I still think it's worth it - it is a one-time fee.

I think I may have a little OCD because i don't have just a 'food' column; I have groceries, fast food, and restaurants It's just so I know how much a month i'm spending on sit down restaurants vs fast food places like taco bell etc..

For "food", I have: Groceries (includes non-food items because I'm too lazy to break out one receipt), Restaurants (any type of restaurant, be it sit down, fast food, or takeout), Wine & Beer (because we can't get wine & beer at the grocery store - stupid PA laws), and Karen's lunch (for when I eat out at work).

Girl, do you get commission from YNAB?! You should after all these years! LOL - I am such a YNAB pusher, aren't I? I swear I don't work for them - their product just worked so well for me when I NEEDED to have a working budget!

While Karen is partial to YNAB, I myself like Quicken. Regardless of what system you use, the most important thing is to find one that works for you. If you can't find a style that truly works, then you'll be back where you started. I would start simple and as you get more comfortable with what you're doing then go a little more complex/detailed. Another thing to remember is that budgets are meant to be adjusted periodically...especially in the earlier stages. Once you get the hang of things it should become second nature.

Karen and a few others recommended YNAB to me and I love it. So much easier than carrying around cash envelopes (or realizing I left them at home and have no way to pay without a debit card).


I still have some things I don't quite "get" with YNAB, but overall, as long as that bottom line on the monthly spending matches our income, I don't worry about it.

You "assign jobs" to your dollars. So, even the amount we put in savings is given the "job" of going into savings. Every dollar is accounted for.

Dawn

 

[Leshaface]

I've never used it and didn't even know it existed until just now. I just do it all myself on a simple Word doc. I think I might be a little OCD with the budget too, because like I said it can be tedious at times, well really only on paydays when I start moving money into my E envelopes. But I swear by my madness, it totally works for me.

Oops sorry for my confusion!

For "food", I have: Groceries (includes non-food items because I'm too lazy to break out one receipt), Restaurants (any type of restaurant, be it sit down, fast food, or takeout), Wine & Beer (because we can't get wine & beer at the grocery store - stupid PA laws), and Karen's lunch (for when I eat out at work).


You're telling me about the PA laws! We go to York every summer, and we like our wine and beer and it's still amazing to me, that we have to go to a specific place to get that stuff!!

Anyways, Karen I have another question..i added in all my accounts to YNAB but I don't want those accounts to be considered 'available'. Those are pure savings accounts that I want to ONLY deposit money into each month and never take money out. Is there an option somewhere to not show my savings account balance as 'available'? I hope this makes sense

 

[Jill in Chicago]

I think the most important thing with a budget is to know what you want to accomplish. Do you want to: just know where does the money go? Pay down debt? Set aside a certain amount for emergencies? Save for a vacation? Or maybe change where you spend money in one area so that you can spend it in another area instead?

Without a set goal it is hard to stay motivated to keep a budget.