Please tell me about your method of budgeting

[NY Pirate Princess]

I have tried pen and paper but it just isn't working. Looking for a method that isn't a week's investment of time to set up and is easy to continue. Considering YNAB and cash envelopes.

Background: We are almost two years into a 15 year mortgage. Paying extra with the goal to retire it by 2024 instead of maturity date of 2029 so I may also retire! We will both get service based pensions which will cover basic needs but zero wants (such cable tv and cell service). We currently save for retirement with work accounts, have a 529, vacation account, and have a small emergency fund. I am comfortable with the size of the emergency fund as we have other cash floating around (like vacation) and we both must have at least 30 day notice of a lay off. However, both of our paid off cars are over 10 years old so I need to start saving for maintenance/replacement. No outstanding cc debt or student loans or any other retail debt.

I am time crunched with a stressful job and child rearing, but I know this is mostly a matter of discipline. I need to put the time in up front to set up a system that will be easy to navigate as I go, and dare I say a little fun, so I won't abandon it.

New years resolution number one is to set my financial picture and forget it once and for all. Any suggestions would be appreciated.

 

[teller80]

What isn't working for you now, sticking to a budget or actually making a budget? I understand time is valuable, but I don't think "a week's investment of time to set up" is an unreasonable use of your time. After that, think of it as a weekly chore, like laundry. No, it's not fun, but in the end you'll be glad you made the effort.

 

[Southernmiss]

Dave Ramsey, Quicken and an excel spreadsheet.

Dave Ramsey is a good start for the basics- write down every penny spent, list all your regular bills and you should see where the holes are that you spend without thinking. Look him up on the internet, listen to his program, get his book Total Money Makeover or take his Financial Peace University 8 week class.

I don't use envelopes but track spending with quicken. Dh referees soccer for our pocket $. All other money is accounted for in quicken. We use our Disney credit card for points and pay it off weekly.

The excel spreadsheet is how I list all of our bills and expenses.

Disclaimer: tough love ahead...
No method will work if you don't discipline yourself. We all have families, (we have 4 kids) jobs (3 between us) and activities (lots of running with the kids and Dh and I are on several church boards). So don't let that be your excuse. Because it sounds like you are.

 

[eliza61]

I have tried pen and paper but it just isn't working. Looking for a method that isn't a week's investment of time to set up and is easy to continue. Considering YNAB and cash envelopes.

Background: We are almost two years into a 15 year mortgage. Paying extra with the goal to retire it by 2024 instead of maturity date of 2029 so I may also retire! We will both get service based pensions which will cover basic needs but zero wants (such cable tv and cell service). We currently save for retirement with work accounts, have a 529, vacation account, and have a small emergency fund. I am comfortable with the size of the emergency fund as we have other cash floating around (like vacation) and we both must have at least 30 day notice of a lay off. However, both of our paid off cars are over 10 years old so I need to start saving for maintenance/replacement. No outstanding cc debt or student loans or any other retail debt.

I am time crunched with a stressful job and child rearing, but I know this is mostly a matter of discipline. I need to put the time in up front to set up a system that will be easy to navigate as I go, and dare I say a little fun, so I won't abandon it.

New years resolution number one is to set my financial picture and forget it once and for all. Any suggestions would be appreciated.

One suggestion: get rid of this notion. finances are pretty fluid, lol. I just started a thread about how I blew my Christmas budget. unfortunately that means i have to go back and retool my budget. Now that I'm approaching retirement (june 2016) I've been working on my finances all the time. Now I totally agree that spending hours and hours on a budget or your finances is ridiculous also. I'm a firm believer in knowing your true self. NOBODY does what they hate for a long period of time, it's basic human nature. that's why diets don't work. If you hate doing something all the discipline in the world won't work for long periods of time.
Find a system you can use and will fit your life.

Now, exactly what isn't working? are you having more month at the end of your money? do you simply want to know where your dollars are going?

One thing I see that I love that you are doing is goal setting. My husband and I always, always did a lot better when we had end point goals. I do like YNAB mainly because it has a app for my phone that is easy to use.

 

[LinderInWonderland]

I have spoken of this on these boards before, but I am using YNAB.

I really enjoy budgeting, so I was always making new ones and trying new methods. DH would smile and nod, and then spend as usual. None of our bills were ever late and we had some savings, but not anything like we want to be saving for all the things we want in the future.

YNAB works for us because we can have it on our phones and visible at all times. I took all the free webinars. It took minutes to set up all my categories and line items. Now, when we get paid, I assign the money to each category. When we shop, either of us can enter the transaction in the app and it updates across both phones and the desktop software.

It used to be that our cushion was our savings account and we were dipping into it way too often. Now, the cushion is in our checking account and savings can be left alone.

 

[KristinU]

When Dave Ramsey came out with his new budgeting application called Every Dollar last spring-ish I switched from my old Excel spreadsheet. I really like the simplicity and the fact that it is web based, so I can look at it from work or home. I'm still eagerly awaiting the Android app for even more portability. The app is pretty straightforward and took me maybe an hour to set up. I do hop in several times a week to assign my transactions to the correct budget categories. I find it easiest to just stay on top of them regularly rather than once a week or once a month.

 

[hsmamato2]

sorry OP, pen and paper is my main tool. I keep a budget book - make a main page (update for yearly income/outgo) with a list in order of bills to be paid, accounts to invest in,and extras. SO I have an overview of yearly income vs. outgo-That goes in the front- then the budget pages get a weekly input-(payday) with in/outflow..... then I break it into monthly,and weekly-
**** example, if I owe xxxxx for realty taxes yearly, then divide by 12, and I owe xxx monthly,which breaks down into xx weekly(divide by 4)*** this serves as my basic plan.
for everyday life-I write out in categories that make sense to me, subtracting as the month goes along. SO I start on the 1st of each month with a XXXX for entertainment,and as I spend,each week I subtract on that line how much,and current weekly 'balance' I have left to spend. same goes for each 'category' of daily spending....
I bought a simple accounting book from walmart for 3.00- and it has enough columns preprinted that I just write my categories across the top,and subtract from there.I don't know why but I find writing it is easier for me to keep track of than a computer spreadsheet, but each person is different.
Balancing my books takes less than 1/2 once per week. (fwiw, I use a cc,which makes it simple to keep track of daily expenditures to write down weekly)
It's simple- our income ....xxxx-necessary expenses like housing/car/food-savings=daily spend on anything else divided up into categories.

 

[DisneyMandC]

Just started YNAB and really enjoying it. DH and I are fortunate to both have good incomes, but had no idea where our money was going. We haven't set a budgeted amount out for each category for next month yet, but just putting in our expenses has helped us see where our money is going (way too much eating out this month). Really looking forward to taking the Webinars and understanding how to use it better.

 

[Gumbo4x4]

We're tryin something new. I've eliminated known expenses from the equation because they're not only fixed, but also unavoidable.

I know roughly how much $ we have available each month for everything else (to include groceries & eating out). My spreadsheet starts each month with a full balance. Every purchase is logged & we work our way toward $0. If we hit $0 before the end of the month, that's it. No more purchases (I left just enough wiggle room for very basic necessities like gas & milk).

If we end the month with a positive balance, that can be carried to the next month - like rollover dollars. My spreadsheet took all of 10 minutes to set up.

Wish us luck

 

[Sunshineminnie]

I have used Mvelopes for years and love it. It is an online envelopes system. I started both of my kids on it too. My high schooler uses the free version and he really budgets well. My college daughter uses the full version. It has been invaluable in teaching her to manage her finances. We started both kids on a budget and managing their own money in the fifth grade. Now that they are 20 and 17, they really get it! They are very frugal with their money. They shop for bargains. They aren't caught up with name brands. They know how to save for something that is important to them and have figured out the difference between needs and wants.

 

[hsmamato2]

We're tryin something new. I've eliminated known expenses from the equation because they're not only fixed, but also unavoidable.

I know roughly how much $ we have available each month for everything else (to include groceries & eating out). My spreadsheet starts each month with a full balance. Every purchase is logged & we work our way toward $0. If we hit $0 before the end of the month, that's it. No more purchases (I left just enough wiggle room for very basic necessities like gas & milk).

If we end the month with a positive balance, that can be carried to the next month - like rollover dollars. My spreadsheet took all of 10 minutes to set up.

Wish us luck

That's the basic idea from mine too! I like it a lot,since it's easy to see how much is left for the month at a glance...

 

[Sadie22]

I would suggest meeting with a financial planner who will review your situation and make suggestions.

 

[tvguy]

Pretty much cash and carry. If the money is gone from the checking account, we don't spend anything. Anything in the checking account the day before pay day gets transferred to savings.

 

[disneypanda11]

I would wholeheartedly recommend YNAB. I've used it for about two years now and have found it to be a great real-time reference for our monthly goals. We'd previously used Quicken, and with that, I could give you a detailed accounting of where our money was going, but it was not suiting us as a decision-support tool to make informed spending choices based on what we'd allocated to each category. With YNAB, I can call that information up on my phone in seconds and can attest it really has shaped my behavior. I think that's a key difference- whatever budgeting method or tool you use should be impactful in helping you change your behavior meaningfully to attain your financial goals.

I'll add this too (and please believe me when I say that I mean no offense to anyone)- I was initially worried that YNAB would be too rudimentary for us, as when we purchased it it really seemed marketed as a way to break the paycheck to paycheck cycle (which was not the problem we were trying to solve). However, after using it for this long, I am confident that no matter what your financial position or situation, it is flexible enough to fit anyone's needs whether that means working to make ends meet or planning for long range financial success.

 

[PlaneJoy1]

Another YNAB user. It has completely changed our financial picture over the past two years! I was able to see the benefits in the first paycheck after starting to use YNAB. They are releasing a new, web-based version tomorrow. I don't know much about it, but I will likely stay with the current version for a little while. The new version is a subscription service. It's worth at least trying the 30 day trial, which is how I started.

 

[MomToOne]

I just use an Excel Spreadsheet, with a rows for each line item, and a column for each month. I find I need to take a yearly view, not just a weekly or monthly one, and a spreadsheet makes that easy-peasy. I like to set a saving goal for the year, then work the numbers to hit it. Just due to the nature of some bills, some months the amount going to savings is lower (or even negative: hello bi-annual car insurance bill! LOL), other months I stuff lots away. Keeping an eye on the yearly number, instead of the monthly one, helps me stay motivated.

As I hit a month, I replace the budgeted amounts with the actual amounts for each item (yes, I track every dollar I spend - it takes just a few minutes a day, if that), which helps me have a good record when I go to develop the next year's budget. It also allows me to "Rob Peter to Pay Paul" as I need to because some things come in higher than thought, while others come in lower. I always strive to maintain - or increase - my annual savings number while making adjustments like this, and not to lower it, but sometimes it does take a hit - that's just life! At least by doing things this way, I am aware of it the moment it happens.

I find the worst part of getting going on a budget is coming up with the right line items for you. I have a set that I have fine-tuned over the years that works well for me, but I'm sure others would want different ones. But don't let that stop you from getting started - just pick something that seems logical to get started with, then you can adjust as you go along.

New years resolution number one is to set my financial picture and forget it once and for all.

I suspect this may be where you are going wrong - finances just aren't things you can "set and forget". They constantly need watching, adjustment and fine tuning as our lives adjust and change. I think a more realistic goal would be to minimize your time spent at them - but there will always be some element of time that needs to be spent.

 

[KSR0330]

I like tvguy's idea of "cash and carry". It's much easier to over-spend when it's put on a card, whether it be credit or debit. I definitely spend less when it's cash rather than my debit card.

You have to find what works best for you, which may not be what works best for someone else. I have tried spreadsheets and tracking every penny, and I just can't do it long term. Right now I'm going "bare bones" in the attempt to pay off one of my credit cards. I have made a plan of what I will spend on groceries and gas, with a little ($20) spending cash each week. Everything else that doesn't go on my monthly bills (mortgage and utilities) will go on the card. I'm very motivated to get that card paid off so I'm sure I'll be able to stick to my plan. Good luck!

 

[NY Pirate Princess]

Thanks everyone! To clarify my goal, I want to know where my money goes. When I try to write a budget I get bogged down in which categories to use, how much to put in each one, how much detail I want to see in the end, etc. I'll be looking into YNAB in January. I have been resisting spending money on something that helps me not spend money, but I think the time has come. I didn't realize it was changing formats. Thanks again!

 

[Nennie]

I use mint.com It's free, and it keeps track of everything. I use credit cards (for points/miles, and pay them off each month). Mint will see the purchases, and put them in the right category (groceries, gas, restaurants, etc). It's fun to try to come in under budget, etc. I never realized what I spending stuff on until I set up Mint.

 

[tink9702]

Start with just the categories the first month. You'll need basics like Mortgage, Gas, Groceries. We put healthcare, personal care & household goods into 3 different categories, have a regular vacation account & a Disney one too. Just start with what you know you spend money on and what you want to save for including a category for New Car & re-adjust monthly. We love YNAB because it's helped us know at that precise moment if we should eat out for dinner - no more restaurant money then we don't go out. It also stops me from overspending at the grocery store. This week we decided to eat what's in our pantry/fridge because I'd "overspent" on food for Christmas since we hosted my family for 2 days.