Do You Budget?

[kristinecfp]

Since many people make financial resolutions for the New Year, I was just wondering...

How many of you actually have a budget? How do you budget - do you use software, spreadsheets, pen and paper?

Do you use your budget just to track spending, or do you actually compare your spending to your budget and make decisions based on those numbers?

I religiously track my spending, and I have a cash flow plan, but I've never considered myself a strict budgeter.

How about you guys?

[smartatmoney]

YES! I would NOT recommend being without a monthly budget. Mine is actually a 2 week budget 'cause that is how often I get paid. I end up using a spreadsheet since I don't like the way quicken handles it.

I use it to track my spending during the 2 weeks. I let quicken track my historical spending. I do make financial decisions based on how much has been spent etc.

It has really helped me stay on track. It was like getting a raise actually.
-SAM

[beebop25blue25]

Well, I budget but in a different way than most!! I take 100% of our income for the month and break it down to 70% to live off of. This goes to pay bills, groceries, eat out, etc, etc.!! When that 70% is gone, i'm done for that month! I save 30%.

This may sound odd to some but it works for us. It kinda gives me more freedom and I don't feel deprived. I have one lump sum that we live off of for that month and I know that I have to pay my house payment and everything that it takes for us to survive on that 70%. Then the 30% I stick into savings and don't see it or touch it unless i NEED to for emergencies. It works for us!

[Broken Arrow]

I use PocketMoney on a PDA. On it, I have a budget set up to manage cashflow per pay period (rather than monthly). I also track all my transactions down to the last penny, and is always updated within minutes after a transaction is made.

As such, comparisons and fine-tuning on the budget is also available, anywhere and everywhere I go, and never more than a few seconds away.

I never thought of myself as "strict budgeter" either, but perhaps I am and not even realize it? Well, whatever it is, this method works and suits me just fine.

[LivingAlmostLarge]

It's a resolution to try. I've tried money and quicken it doesn't work for me. I'm like beebop, I don't budget. arrgh.

[Ima saver]

I have done a budget for the past 40 years. I do mine weekly and it is all on paper. Then I put the money in envelopes. I have used the envelope system ever since I got married the first time. It has always worked for me, cause I never borrow from the envelopes.

[rduell]

My actual budget is a combination of paper and spreadsheets. I use the paper daily and the spreadsheets monthly. I got started years ago with Larry Burkett's system and have adapted it over the years to fit what I need. I use the budget to make comparisons and adapt the budget as I go along if I see I need more or less in each category.

[Amanda W]

Yes, we have a budget. I use a combination of Excel spreadsheets I have created and Quicken. We use the envelope system for our variable expenses, so I can be sure we don't go over.

[Aleta]

I budget. Right now, everything is listed in a spiral bound notebood, plus I have sheets for each account. I plan on putting everything on the computer this year though.

[disneysteve]

I'm never quite sure how to explain my system. Most of it is in my head (and my wife's head). We only buy what we need. If there is something we want that isn't a need, we only buy it if we feel it is reasonably priced and easily affordable.

As far as a formal budget, I absolutely budget our savings first. I get paid every other week and 17% of gross goes to savings. My wife gets paid twice a month and about 80% before taxes goes into her 403b (she brings home less than $80/check).

We don't really budget our spending, but we both just know inherently how much is too much for something. I really can't explain it any better than that. For example, I have no idea how much we spend on groceries, but I can tell you that there are many grocery items that we won't buy if we can't get them for less than a certain price. For example, I won't pay over $2 for a carton of OJ or $2.50 for a 12-pack of Coke. When prices are higher than that, we just don't buy the items.

I do keep a list of our recurring bills - mortgage, insurance, utilities, dues, magazine subscriptions, etc. But I do that more as a record of spending, not as a plan for spending.

I don't know if this makes any sense, but it works quite well for us. I think the key is that we both are naturally frugal and aren't apt to spend large amounts on anything, no matter how much money we have. Also, the fact that we are dedicated savers and investors helps keep our portfolio growing.

[LuxLiving]

Yes we do. Jesse's youneedabudget.com. I do make slight alterations as the month goes along, but the important stuff like retirement savings and taxes, etc. are all on automatic deducts. Usually it's grocery, gasoline or spending money that will take a minor hit if something unexpected pops up which happens less and less often as I track & anticipate better. Something not so minor comes out of the mini-emergency fund that I have in savings. Then for a major fall-back there is a major-emergency fund which is the year salary backup.

However, the word budget always had negative connotations for me for so long...when I got my brain around of the concept of a 'SPENDING PLAN' things finally started to click!

[Lonewolf]

I track all of our expenses for the month in Excel, the main reason is to capture items that fall outside the "norm" (such as medical expense, the purchase of a new kitchen table, etc). We have been doing this for a year with the hopes of potentially creating new "fund" accounts which make sense.

From a budget stand point, I guess we would be similar to what Disneysteve described. In general, we do almost all of our payments via our credit card, and pay it off every month. This gives the ability to track at year end how expenses flowed. But overall, we live by the mantra of "unless the boneless chicken is 1.99 a lb, we don't get it". (Thanks for the blessed Freezer which allows us to stock up when prices are right.) Wife and I are on the same page, so that makes sticking to this "budget" much easier. In addition, we usually have an idea to how much the credit card "should be" each month, so if that gets close, we tend to tighten the belt a little tighter until the following month unless it is truly needed.

I think the key thing is understanding how the expenses are adding up, with most of ours contained to the credit card, it makes it easier to review and tweak. Discipline is the key, as it easy to swipe if you don't pay attention.

Wolf

[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.

It was certainly enough to do when it was just myself. After I got married, it was still all right but the saving wasn't quite as aggressive. Now that we have a daughter the cushion that we enjoyed is almost gone for a number of reasons, so we may need to re-think how it's working.

[disneysteve]

Lonewolf and mbhunter - thanks for posting and letting me know I'm not the only one who works this way. I just find it difficult to explain to others.

We also charge as much as possible to the credit cards and pay them off in full each month. Our 2006 charges were about $32,000. I'll be getting the year-end statements shortly.

And yes, we will tighten the belt a bit when spending is a little heavy for some reason. But we do all that based on an "internal calculator", not a written spending plan.

[mbhunter]

We charge a ton on our credit card as well (and pay it off every month). Something like $500 in rebates this year!

[MonkeyMama]

We did quite well doing that budget method (in the head?) when we had 2-incomes and no children. Just fine, we are extremely frugal, never bought much new, saved 50% of our income. My dh and I Were both raised very frugally so it is just 2nd nature overall.

There were times in our life though money has been very tight and budget helps us refine our goals, cut expenses, move forward. In the past I have done more temporary budgets. When dh and I first were married we set up a budget and an allowance system. I was really worried he would want to spend too much - LOL - but we set our limits and knew what they were so we stopped tracking entirely after just a few months. We were meeting all our goals and then some, we knew our limits.

Going down to 1-income we kind of kept that method, it was okay, a third mouth to feed, still okay. But with 2 kids now, and we are also looking at this 1-income thing a s much longer-term situation lately. As such something had to give so we got out the budget.

This time I actually have been tracking everything in Quicken, which is just easy and quick and nice. & I have an annual budget set up in excel. Putting all the fixed expenses, and our goals, and trying to make everything else fit. A constant work in progress. But I guess the point is as things get tighter, the more we work on the budget. For now we compare our actual expenses to budget every month. Don't necessarily tie to the dollar, but skim the totals in Quicken, the budget is in my head mostly. IF we are on track that is well, if not we refine, change, whether the budget or our spending...

We pay everything on credit card - will make $500 rebate this year - but I am working it out in the budget though frankly it gives me a headache sometime, working out the credit card charges in a cash budget framework. But I have got it pretty figured out. HAving all the cards close around the 3rd of the month helps - so we pay off the prior month around the 4th every month. The headache is sometimes things for the next month sneak in before the close - but it's close enough.

This is the first time I have ever had an annual budget. It has taken my budgeting to a whole new level - it's great. If nothing else I feel more organized, easier to plan ahread and set goals looking at an annual basis. Not that I track every penny - but just even to get a ballpark what is going on in coming months.

[safari]

I don't budget. I am saving on average about $3,500 a month (which includes 401k). Like Steve, I know what the prices are and will only buy the things that are reasonably priced. I am sure I could save a few more hundred a month if I wanted to, but I do like to splurge from time to time on things like concert tickets, european vacation once a year, NBA season seats, etc. I estimated that I should be able to retire comfortably by the age of 60, if not sooner.

[Ima saver]

Wow safari, you save more than most people make!

[kv968]

Originally Posted by safari

I don't budget. I am saving on average about $3,500 a month (which includes 401k). Like Steve, I know what the prices are and will only buy the things that are reasonably priced. I am sure I could save a few more hundred a month if I wanted to, but I do like to splurge from time to time on things like concert tickets, european vacation once a year, NBA season seats, etc. I estimated that I should be able to retire comfortably by the age of 60, if not sooner.

I'd say I'm about the same. Not saving $3500/month (I wish ), but just buy things that are reasonably priced and splurge every now and then...concerts, round of golf, etc... I'm on top of my monthly bills and just take it from there.

I move any money that I don't need weekly from my checking account to a MMA. That works good for me because for some reason I treat that money as if I can't touch it even though it's not my emergency fund. And if I do touch it, I "charge" myself a "penalty". In other words if I take out $100 or $200 for something I have to put in an extra $50 when I put it back. Some people find that weird but it works for me.

[JanH]

We budget now with an Excel spreadsheet and keep track of all spending in it. It has helped us define goals better and see what we have to work with. With kids in college, it has become almost a necessity!