Please tell me about your method of budgeting

[AnnaS]

I have been doing/my own envelope system for about 28 years now. I don't do it for every single bill but I do have quiet a few envelopes. Basically I have an envelope for some major bills/projects coming/might be coming up. For instance Christmas, vacation, car insurance, homeowners insurance, Parties (yes, lot's of weddings, baby/bridal showers, sweet 16's, Communions, Confirmations, etc.), DVC Dues, etc. You get the point. What I also do is if my Car insurance bill is $4,000 yearly - (Pretty close to it) - I divide this amount by 52 weeks = $76.90. I know every week I need to put $75/$80 in that envelope. Homeowners is $1,600 yearly divide that by 52 weeks - $30.76. So I put $30 in that envelope, etc. etc. I also keep one for misc. Some weeks the envelopes get more and some weeks less. I do not do this for utilities, phone/cable, if one has mortgage/rent, etc. If I know some appliance is ready to go or we plan on tacking a project, I start an envelope. When the time comes around to pay for whatever it is - I barely feel it. I might have to add a few dollars. If I over budget (does not happen often), it starts for the next cycle/bill. You need to be very disciplined and not use it for emergency.

 

[Narnia_girl]

YNAB

 

[LJSquishy]

I started using YNAB (You Need A Budget) in October and it's made a huge difference for us. We were previously saving between $2,000-$2,200 per month and since using the YNAB software we've been able to save $3,000 monthly. This number is skewed for us right now because we've been living almost rent-free without a mortgage payment so don't think we normally have that much being saved every month! We're a one income family. But numbers aside, we're saving 1/3 more than we were before YNAB! It has allowed us to start building a new house several months earlier than we expected... We started the process in late November vs Feb/March. Once our house is done in late June our finances will be a lot tighter and YNAB will be more important than ever for us to help keep us on track but I'm excited for it.

I kept taking the webinars until I won a free copy of YNAB but it is so worth the price. There is even an app to input your transactions so you can keep your budget current even while on the go.

The biggest area money was bleeding out for us was eating out/snacky foods at the grocery store. We still have a lot of room for improvement but it makes us more aware and makes us want to do better next time. I know we can do better.

 

[xlxo]

• My method is look to at my credit cards. If I get behind my payments.... I'm in trouble.
• Need to plan for emergencies..... my furnace motor needed to be replaced this morning.... ouch.
• just bought myself a hybrid.... with the gas I'm saving... I can afford the car payments.
• Need to stop snorting that pixie dust.

 

[Dread Pirate]

I just started YNAB, and LOVE IT! I did all the free workshops online, and won a free copy of YNAB 4. The newest version comes out tomorrow, but I'm happy with version 4, so I'll probably stick with it. I like being able to categorize everything, and can see what's available in the category using the app on my phone. They have suggested categories for the budget, and the customer support and forums are so helpful.

 

[HeyIt'sMe]

The work I do as our company's Director of Finance requires heavy use of Excel and constant work with numbers - actuals, budgets, forecasts. I love it! I am a true accounting/finance geek. So, since I am very familiar with Excel that is what I use to create budgets and track expenses, savings, investments, etc for our personal finances.

 

[viaggiamo]

Check out the forum and blog of Mr Money Moustache it is awesome.

 

[dsneygirl]

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.

Another YNAB endorser. I was so skeptical at first but in just 8 months it has made a huge, huge difference in our finances, goals and savings. DH set it all up and it did take a while but the maintenance is easy. He updates it every Fri.

 

[aprilchem]

I don't use YNAB simply because I don't want to pay for it - I'm cheap that way (ha). It's really expensive!

What works for me is to set up an excel spreadsheet with all of my budget categories. Each month on payday, I go through my spreadsheet and add budget amounts for each category - these change monthly depending on how many weeks are in the month and what we've got going on. My budget spreadsheet is set up to automatically tally the amount I've got in the budget categories and subtract it from the total in my bank account at the bottom of that column, so I'm able to budget my entire paycheck for the month.

Beside that column, I have another column for my expenditures in that category for the month. Every week or so, I log into my bank and add each purchase amount to this column, which then gets automatically subtracted from the correct category into a tally in a new column. This is how much I have left to spend in that category. I make all my purchases with my debit card so it's easy to track. For example, right now (because I just did my entries for the week) I know that I have $331.46 left to spend in my grocery category until January 20th, when I get paid again.

Each time I look at the spreadsheet I make sure my online balance rectifies with what I've got in the spreadsheet, so I know I didn't forget any expenses.

At the end of the pay period any money that is unspent from any of my categories either can pile up (I do that sometimes with my "blow money" category if I'm saving for something big) or I transfer it into savings, if we won't need it for the next month. I'll do that with grocery money, for example, when we don't spend it all. I also have a line item for "savings" as a regular budget category, so anything unspent is just bonus savings.

I don't know how similar this is to YNAB, but it works really well for me. It took me a while to get my spreadsheet just the way I like it, but I love how it works now!

 

[pryncess527]

Another YNAB user! I'm not moving to the subscription model, but the desktop version was worth 10x the cost for the value it has given us.

We also use Paid in Full credit cards for the rewards, and YNAB made it really easy to maintain an envelope/cash style budget without having to actually use cash.

 

[PatsGirl]

I keep it simple for my family, pen and paper. I also do budgets for clients (I work with mentally disabled adults that live independently) and this works for them its so easy. To start, list all your accounts payable: old doctor bills, charge card balances, etc. just to see what that bottom line is and how you'll work it into a monthly budget. List all your fixed expenses (mortgage, estimated utilities, estimated gasoline charges, hair appts, car payments and monthly insurance, loans, etc). Decide what your food/household budget is weekly by looking back a few months, adding up by the month, and then divide by how many times (usually weekly) you go shopping, include pet supplies and beauty supplies. ONLY GO SHOPPING ONCE WEEKLY! List all discretionary spending: birthdays and other special occasions that you'll buy gifts for and decide NOW how much you'll budget for them, eating out, pocket money.

So you have one sheet of paper that lists Accounts Payable, Fixed Expenses, and Discretionary Spending. I suggest you come up with a number for Christmas and vacation expenses as a side-note here as well as any big ticket item you/your family would like to save for.

Month to month budget: left side of sheet (I use plain lined paper) broken into pay weeks, lists all monies coming in. Right side of sheet for each week lists what needs to be paid; ie., food, discretionary spending, rent, credit card #1....Week #2 starts with any monies remaining, add monies coming in ~ right side what needs to be paid; ie., food, car gas, hair appt, credit card #2, and so on and so on. At the end of the month, anything left over goes into saving for those big ticket items, vacation expenses, paying off charge cards, etc. I always suggest some type of emergency fund if possible, this should go into a separate account that does not get touched unless absolutely necessary.

If you underspend or overspend on any item, I red line it with the correct amount so I can choose to change it for the following month or at least to take a harder look at it.

 

[Shmily1]

I use YNAB also but won't be switching over. I love the current product but find that paying yearly for it would be more than I am wanting to do since I don't feel I would benefit from the "enhancements".

 

[pigletto]

We use YNAB. I'm on it daily as I track every single expense. I've been using it for almost 2 years I think, and I'm never surprised by anything anymore. I know what's due, how close or far away we are from our goals etc. We are spending less and vacationing less but we have a firm grip on the reality of our finances that we didn't have before and that is peace of mind for us.

 

[jsrowdon]

I use personal capital to track all my spending. It is similar to mint but I prefer it because it focuses more on investments but also tracks spending by category.

 

[angierae]

A spreadsheet that works very much like the envelope method, only it's all digital because I prefer not to carry cash.

 

[NinaBella]

I just signed up for YNAB this morning because I was curious. I WILL NOT be using it. It would be a part-time job to do all that work. I would have to come home each day and ask DH what he spent that day and I am sure he will not remember, keep a receipt, or know the amount. It seems like a good tracking system, but if you are a family, everyone would have to participate (at least the parents). It would be a nightly headache for me.

I like my spreadsheet. It's very detailed and I only update it twice a month. I project all my bills for the next month, enter the monthly income and have simple formulas that total the numbers I want to see. I track bills and my accounts but not things like stopping at Target or Starbucks. The majority of my bills are paid the first 10 days of the month. On a few items are on an ACH for between the 15-18 like our life insurance payments. Typically by the end of the month, whatever is left in checking I will use to snowball the next month.

 

[pryncess527]

I just signed up for YNAB this morning because I was curious. I WILL NOT be using it. It would be a part-time job to do all that work. I would have to come home each day and ask DH what he spent that day and I am sure he will not remember, keep a receipt, or know the amount. It seems like a good tracking system, but if you are a family, everyone would have to participate (at least the parents). It would be a nightly headache for me.
.

It does help to have everyone on board! And the mobile apps help with that -- once you've been somewhere once, it knows your location/category/method of payment, making it quick and easy for my DH to enter his daily latte while he waits. Otherwise he'd never be on board!

The new one lets you connect to your bank, similar to Mint. I personally don't like that option, I find manual entry pleasant and easy, but it does cut down on the work for those who considered entry a barrier.

 

[bovioask1]

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.

I'll have to check that out, my wife and I took FPU and it helped great for the time being. Paid off a ton but still have some more CC debt to pay off, overall Financial Peace University definitely made us more aware of our spending and saving. Write down expenses, things always change, emergencies happen, it's hard to keep to your budget but at least you'll have more understanding on what is being spent and what you can put away.

 

[chris31997]

We use pen and paper to work out the kinks then I input everything into EveryDollar. Our categories change as our needs change.

Line items could be: DiningOut, Groceries(we like to keep them separate), Walmart/Household, Kid activities, Mortgage/Rent, Elec, Personal(haircuts,nails ), Blow It, Christmas, Cars, Vacation. Really line items can be anything you want or need. You can put anything it, you just want to keep it reasonable

 

[NinaBella]

It does help to have everyone on board! And the mobile apps help with that -- once you've been somewhere once, it knows your location/category/method of payment, making it quick and easy for my DH to enter his daily latte while he waits. Otherwise he'd never be on board!

The new one lets you connect to your bank, similar to Mint. I personally don't like that option, I find manual entry pleasant and easy, but it does cut down on the work for those who considered entry a barrier.

Well that is great for those who have a personal smartphone who can download the app. My husband only has a government/military issued blackberry. I believe the new one is a smart blackberry, but he will not be downloading any apps to it. He is the guy that has to do all the reports on misuse of the phone. I am not sure I want our budget out there being looked since the phone usage is highly monitored.

The YNAB webstite could use a lot of improvements. I tried to figure it out for 2-hours which included watching YouTube videos. IF I wanted to use it (which I decided I don't), I would still have to keep a spreadsheet PLUS use the YNAB and the YNAB is not detailed enough for me and looks too cumbersome to update each night.

My spreadsheet provides a lot more details in an easier to read format. I have simple formulas in my spreadsheet that adds up the totals from various locations to tell me where I am in my budget.