Do You Budget?

[Budgeteer]

We have been using a budget for about 4 years. And yes, it's a formal budget and we track all of our spending.

We used Excel to build out our budget, but we use MS Money to track it. It's very easy that way because we can download all of our bank accounts/ credit cards into the software. It guesses correctly for most items, so I don't have to categorize anything. Then it quickly summarizes what categories we are over/under in. I find this extremely easy and useful.

There are a couple reasons we use an actual budget as opposed to just doing it in our head. 1) To make sure we save the money we plan to save. It's not to keep us from OVER spending as much as to make sure all the money makes it to where it's supposed to. 2) To keep a check in place so we don't start spending money on things without realizing it. 3) Because it gives us a complete picture of our money. It's very easy for us to decide if we can take on some expense, because we can look at the budget and decide exactly where the money can/can't come from.

Honestly, we rarely have a situation where we decide not to buy something because of our budget - we'll just shuffle things to make it work. But this is something we've decided to work on this year. We want to put the squeeze down a little on fudging across categories.

One other thing I wanted to mention. Part of our budget is individual spending money. At the beginning of the month, some money goes into my account and some goes into my wife's. That money is in the budget as 'spending money' and is always spent 100% as far as the budget is concerned. What my wife does with it from there is up to her. This works very well because I think wasting $20 on a candle holder or vase or whatever is silly and she can't see why I'd want to keep donating $10 at my Thursday poker game. This way, neither of us worry about it.

[kristinecfp]

I just now had a chance to read through all the responses. I'm surprised at the number of people that use their own spreadsheets instead of Quicken or Money. I also use my own spreadsheets, but I thought there were a lot more Quicken users out there. Interesting...

[disneysteve]

Originally Posted by kristinecfp

I'm surprised at the number of people that use their own spreadsheets instead of Quicken or Money.

I've been using essentially the same spreadsheet since 1992. Back then, it was on my Commodore 64. Then our first Mac, then our 2nd, now our 3rd. I've never used Quicken or Money, so I have no idea what they might offer that I can't do on my own, but I've always been able to manipulate all the data just fine on my own.

[lrjohnson]

Originally Posted by mbhunter

Disneysteve you and I spend money in much the same way. I think, as you do, that the only way that this works is if you're naturally frugal. Taking the money out for savings first and then organically spending the rest with an eye on the bottom line for each purchase can work.

Originally Posted by lonewolf

But overall, we live by the mantra of "unless the boneless chicken is 1.99 a lb, we don't get it".

I'm with y'all!! On My Challenge I actually have a budget because $1026 a month is tight, BUT I'll go back to no budget, with total tracking of all expenses. Sometimes I feel like a possible drawback of some budgets is that it may "allow" spending and not encourage people to spend less. Also, some budgets don't allow as much for averaging...my grocery bill swings pretty widely - some months I spend tons and the next month it's nothing.

Fern's Blog Post is a good post that reflects some of the "not exactly a budget, spending wisely" philosophy.

[Aleta]

My son is an accountant and he also says that Excel Spreadsheets are good to use. Although Quicken and some of the other software are good products, you are limited to what you can do. To have a more complete picture, the spreadsheet allows you to create your own plan. For tracking, I think the other programs are good for the income and outgo. It gives you an immediate picture.

As with the person above, I also agree that when you have budgeted categories that you can sure your money is being allocated properly. I sometimes wait till the end of the year and see what left over in each category and I put that into savings or will leave a months payment there in advance and deposit the rest wherever you want. That's also very exciting to see how well you did in the year.

[disneysteve]

Originally Posted by lrjohnson

Also, some budgets don't allow as much for averaging...my grocery bill swings pretty widely - some months I spend tons and the next month it's nothing.

I've wondered about that too. I think a key to keeping the food spending under control is buying in bulk and taking advantage of good sales on non-perishable items. So, for example, if OJ goes on sale really cheap, I'll buy 6 or 8 half gallons and freeze them, but that makes that shopping trip more costly than usual. If I was using an envelope system or some other tight budget, how would that work?

[tinapbeana]

Originally Posted by disneysteve

I've wondered about that too. I think a key to keeping the food spending under control is buying in bulk and taking advantage of good sales on non-perishable items. So, for example, if OJ goes on sale really cheap, I'll buy 6 or 8 half gallons and freeze them, but that makes that shopping trip more costly than usual. If I was using an envelope system or some other tight budget, how would that work?

keep last month's surplus in the 'envelope' available for this month's shopping.

[disneysteve]

Originally Posted by tinapbeana

keep last month's surplus in the 'envelope' available for this month's shopping.

As long as you didn't spend all of last month's allotment.

[tinapbeana]

very true, steve... since most things i buy tend to go on sale in a 2-3 month cycle, i find i'm not typically 'stocking up' on a lot of things at the same time. the amount i have in the grocery budget is to allow for stock-ups when they happen, the rest goes in the kitty for now...

another option is to keep say this month and say the next 3 month's worth of grocery money around if funds will allow. if you find chicken on sale and can buy 3 months worth, take some money from each month. all depends on how 'detailed' you want to be about it.

[vishenda]

spend some, save some, give some.

As long as I can pay the bills I"m happy.

[dvcgirl]

Yes, we budget....always have. We set the "yearly budget" every January, in fact we're doing ours today. My DH has a spreadsheet in which he tracks where and when to move money each month, and then the only two items we track are grocery spending and our "fun money" spending. We have a nice portfolio at this point and are on track to retire in our early 50s, so some might say we're a little anal with writing down each purchase we make in those two categories. But this is always the way we've done it, and for us it works.

[LuxLiving]

disneysteve - on leveling out the bumps when finding OJ or other grocery goods on sale and the month's grocery budget is all gone??

Plan for it.

Weekly Grocery Budget 50.00
Weekly Stock Up Budget 15.00

I just budget to allow for it. I know I will GENERALLY always find a great bargain on something because of where I shop. Once the grocery money (menu-planned, shop w/a list) is gone AND the stock-up money is gone, that's it - UNLESS there is some sale

****SO spectacular, SOOOOO deep-discounted****

on stuff that I already know we'll use and like the brand, then I just buy a year's supply of it OR all they have on the CC and go home and move the money from the Grocery Escrow Fund back into checking and pay off the CC.

Works for us. I really enjoy having the money back in Escrow to pull off these extra-inexpensive-great buys. Thankfully I have a huge pantry room 8x12 lined w/shelves in my basement to hold the booty!

[Aleta]

When you first start buying alot of supplies, the money does go quickly. I usually will keep some cash around and will replenish it. When you buy in bulk like this, it adds up quickly. Sometimes, I have gotten to the point where I actually can't buy anymore. I then can truly wait for a sale. I usually only buy when it's on sale. That is a particular teaching from Andrew Tobias in The Only Investment Guide You'll Ever Need. Even though it's not a new book , it is updated. You really have to try different ideas to see what works best for you. But, it's a good idea to get even taxable items on sale in bulk because you pay more in tax also.

[boefixepa]

I use mvelopes it is an internet based computer envelope system that works for me. I have a yearly budget and it is distrubuted monthly to the envelopes. I can trasfer 'left over' money to savings or let it sit there for next month. I budget to allow for stocking up on bulk purchases and I plan for all the period expenses by putting a little away each month and letting it build so that when the bill is due the money is there. I also use this method to 'balance' my utility bills. I figure the yearly average, add a little to cover usage increase divided by 12 for my monthly amount. I 'pre-fund' things from saving if I am starting at an odd place. (ie in the expesive months instead of the cheap months). This way I always have a positive balance in my utilities and can adjust if needed.

I fund monthly and have a monthly based budget. Meaning the checks I deposit on Jan 10 & 25 will be 'funded' to the envelopes Feb 1st for Feb bills. This did require a chunck of savings to start, but once started it is easy to mantain and you are always have a month to make any needed adjustments.

The stress relief I have felt from this system is beyond description and I would never go back to paycheck to paycheck and thinking the money in my checking account is what I had to live on. Boy was that a LIE!

[The Budget Man]

I use the "Personality Budgeting Program" The 20 years it took in development have made it the easiest program there is to use.

There are only three places my money can go...

Bills
Day-To-Day Living
Savings

Each of these areas need to be looked at differently.

With the Bills I let the Personality Budgeting Program work out automatically what is coming up and how much I need to be putting away each pay. I always have enough money in the bill account and the program tells me if a big expense is coming up.

My savings are also on automatic as I don't save unless it is done that way.

Finally my Day-To-Day living money is the amount left after the bills and savings have gone. With the Personality Budgeting Program I alwaus know how much is available and every so often I look carefully at an arrea of spending like the groceries.

All in all since I started using the Personality Budgeting Program my budget has become a friend rather than the enemy I used to hate so much.

When I look at the work some people put into their budgets I couldn't do that so I'm happy with such a simple budget that works for me.

Enjoy Your Money
The Budget Man

www.PersonalityBudgeting.com
The budget that is so easy to use that people keep budgeting!

[debtfreeme]

I have an excel spread sheet with all of my monthly obligations spelled out, plus retirement, vacation savings, and all the other things I am saving for each month.

I plan where my one pay check a month goes (same amount the first of each month) usually around the 20th of the previous month. I know when I have to pay all those little annoying things: subscriptions, prescriptions, mail box, renters insurance, buying things from my nephew he sells for school, girl scout cookies to send to my sister who lives in Europe, etc. that are not always paid for each month and mark it in the appropriate month and “save” toward that goal monthly or make sure that the check that month can cover everything I need it to.

I use the envelope system for the following items: monthly gas and coil changes for my car, my “fun” money and my groceries. Those I have a set amount each month and when it is gone, it is gone and no more fun for me!

I have used this system for about 2 years and can account for almost any penny I have spent except the fun money.

[s.saver]

safari, I am totally with you (not w/3500 a month) but am reasonable, I save, and even though I should I don't budget

[OhioMom7]

Most of our expenses are fixed so that part is easy. Mortgage and budget pay on utilities so no surprises there. Auto withdrawal on savings and soon 401K when dh qualifies.
We have another checking account and that is what we can spend. I am always trying to save money in that account but that is for EVERYTHING so some months it's eaten up by prescriptions or eyeglasses, etc.
I don't have a strict budget.

[DC?]

I've always kept a checkbook (well, now it's on the computer) register, but I just recently started a formal budget. I'm using these free applications: Pear Budget (a fancy Excel spreadsheet) for the budget and Cashbox for my register.

I'm really happy with these so far. I started off with my own spreadsheet but found Pear Budget more elegant and more advanced than anything I could take the time to do.

[saver25]

Has anyone had any success with any of the new online budgeting programs? It seems that there are a lot of new websites that are offering budgeting/tracking software - I haven't tried any of them but I would be curious to see how they stack up to Quicken, Money, etc...