POLL: Are you on a written budget?

[jmjj215]

Alright, who here operates on a written budget. Do you operate weekly, monthly, quarterly?

Is your budget "zero-based" ?

If you are not operating on a written budget, what's the reason?

[PennyPincher]

I suppose so - I write down everything I spend in a spreadsheet I created. I categorize my spending, and have set it up to show me the percentage of income spent on each category.

I don't pre-determine a particular percentage for each category. I am watching and tracking my spending, but don't hold myself to a particular percentage. Some months more is required in one category than another. (when insurance is due, etc...)

This is a great system for me and allows me to see where my money is going, how much I've saved, and to refer back as needed... All in one place.

I'm not sure what a "zero balance" budget is though...

[DivaJen]

I have a budget set up within Quicken, so that I can track actual spending versus what was budgeted.

[tamip]

Yep, written budget here too. I also use the envelope cash system. I pretty much stick to that. If I notice things getting off track a little, I start tracking our spending again to keep us in check.

Tami

[paulmish]

Great topic! I actually wanted to share my attempts at budgeting. I have a budget in Microsoft Money, and I upload the transactions from my credit card and checking acct. Unfortunately, I have found no quick way to assign each imcoming transaction to it's proper budget item, because if you assign it to the wrong catagory (ex: leisure:video instead of video: fees) it just goes into limbo. I don't know if I can choose a catagory from the budget - haven't taken the time yet. So, while I have spent hours setting up a budget, and cutting back minor services to save money, I don't have a quick picture on how we're doing.

When my husband and I worked in IT, we had plenty of money. However, to pre-empt the offshore unemployment wave, we both went back to school (full time for me, part time for him). We've been paying tuition, and at least 20 hours of babysitting fees, on one income (lower than in previous years, too), with three kids in a fairly affluent suburb (our house taxes are $4800 annually). We have always saved in the good times, but our savings are being drained a little too fast for our comfort.

I came up with what I thought was a great idea. I transferred this month's Visa bill to a new card with 1 year 0% interest (Chase bank). We now use only debit cards, which is already lowering our impulse purchases significantly. So, instead of taking a certain amount from savings every month, we are going to use just income, debit everything, pay whatever we can afford toward the unpaid Visa, and if necessary, charge a purchase on the 0% card instead of tapping savings. At the end of the first year, we can either pay whatever is left, or move it to another card. This way we pay no interest, deduct nothing from savings, and we have the incentive of how much we can pay off this month to hold down our spending! Also, there is far less danger of getting socked with overdraft fees now than when we were paying 2 big bills a month (mortgage and visa).

Man, I'm so proud! I feel like I actually balanced our insufficient budget, in a way!

The Frugal Yuppie

[kashi]

Yes, I have a written monthly budget I created in Excel. That doesn't mean I stick to it, though.

[mjrube94]

I'm with Penny Pincher. I have a written "budget" with all of my categories, but it's more of a tracking tool than a real budget. If I see myself going totally off course in a category I try to correct it. Mine is zero-balance in that, whatever is left at the end of the month goes toward paying down my home equity line.

[PrincessPerky]

I wrote one once, then I kept finding stuff I forgot, so I rewrote it, then I managed to get rid of stuff, and well you can continue that back and forth for a few months. I got tired of rewriting. But I do have a rough idea of what I am supposed to spend. And I mostly do OK, not great, but OK.

[amomof4]

I don't have a budget for spending. My husband pays most of the bills, so I only have to worry about food, gas, & stuff like that. I do have a set amount that I get every month--I get it from the rental income. That is the only money I manage & have control over. My goal is to spend as low as possible every month. The extra money goes to the repairs/rehab of that rental. The less I spend, the faster I can repair that house.

[jmjj215]

I see most then have kind of a reactive approach to it. You track what you spend, then look back and say, "good or bad?" then with that information move forward and repeat the process.

My wife and I do both. We track everything we spend. But at the beginning of each month we decide what to budget into our spending categories. It helps us be on the same page w/ money - which is a great benefit.

Thanks for the input everyone. Anyone else have any thoughts?

Oh, zero-based just means every dollar is allocated somewhere.

[baselle]

I track all of my spending on my PDA, reconcile it with my online bank statements and keep it consistent month to month. I also track anticipatory spending on my PDA also, and I pay myself a consistent amount to savings and investment.

But no, I actually don't have a written budget or a spreadsheet listing monthly line items with dollar amounts and have those dollar amounts exactly equal my monthly income. <insert cringe here>

My system works for me - I save about 25% of my paycheck and I've been debt free for over six months.

Since my spending has been consistent, I've been thinking of doing a twist. Right now my paycheck goes into my checking account and I work from there. What I'm thinking of doing is transferring my entire paycheck in my ING account, then withdrawing a set amount (smaller than the paycheck) back into my checking account. It means that the difference (even if I have to use it) earns interest. Any leftover checking account money (hah!) goes back into ING.

Any thoughts? Anybody else do this? How quick can I get money out of ING?

[Tree0164]

I know what is coming in vs what is going out. I keep it in excel with major catergories. Anything extra was going towards savings now it is going towards car payments or extra carpayments.

[jmjj215]

Baselle, ING is a bit slow on withdrawals, but I still think you could manage that 'twist'. Since you're so disciplined about spending already, I'm sure you'd see a few days in advance if you'd be needing that extra in the ING account. That'd give you plenty of time to make a transfer.

[gakline]

Penny Pincher really summed up what I use. But instead of Excel, I use Microsoft Money.

Baselle --> Here's a quick thing to consider. I use to do the exact same thing. Deposit all into savings and transfer out a few times a month to checking. However due to some new regulations, if you make too many withdrawls (consistantly over 6 I think) from your savings, the Federal gov't thinks you're using it as a checking account. You can either get fined by your bank, or it will convert to a checking account. You should check out what your bank has to say.

[tamip]

How funny, that's exactly what happened to us!! We got fined, and our bank told us that we had to change to a checking account, or we would continue to get fined. So, now we have 2 checking accounts, and one savings account we don't touch.

Man, they end up getting you one way or the other!!

Tami

[jmjj215]

Wow, I had no idea about that fine. Thanks for the info guys. Amazing.

[momma4]

i guess you could consider mine a written budget. I sit down on the first of the month and make sure all the bills are marked on my calendar. Then I average my dh's base pay as if he would only make 40 hrs. then I figure out which bills can be paid when and what we have left for food and extras. when my dh makes over 40 hrs it is a bonus which helps us during our weak weeks.

[baselle]

Thanks guys.
I heard about the fee bit with money market funds when I did things via a brokerage. I didn't realize that this could happen with a plain o' savings account.

I have to think about this scheme a little bit more, study my spending patterns, particularly at the end of a paycheck - I like my little $100 cushion. But there's nothing stopping me from sweeping leftovers into savings when I get my fresh paycheck.

[tamip]

Oh, I love my "cush" too!! If I can manage to keep it until the next paycheck, then I put it towards debt.

Tami

[gakline]

The savings thing is only for withdrawls. Deposits are unlimited.