Budgeting each paycheck...

[MonkeyMama]

That's the thing. In our 20s my spouse and I both worked and so were saving plenty. But I didn't really have a grasp of how much of my savings was "long-term" or more short-term. Now I just kind of have long term (all in retirement funds), mid-term, and short-term. Short-term is just whatever is used within the year. I don't personally belabor a lot of subaccounts, etc. I try to keep it as simple as possible, while trying to get a better "big picture."

As Jim points out - there are MANY methods to the same end.

[LivingAlmostLarge]

MM, I'm sort of the same way. Short term is this year, stuff like home maintenance and repairs, car repairs, vacations, etc. Mid-term is car savings, new appliances for the home, roof replacement, etc. Long term is more retirement only really.

And like Jim, I just know we need to set aside something like $2k/month for different goals.

[zetta]

I'd highly recommend checking out YNAB. Part of their budget philosophy is to build a buffer so that you are always a month ahead of your bills. You budget on a monthly basis, and use money earmed in December to pay January's bills.

I total up all my semi-annual bills (property tax, car insurance, etc.) and set up an automatic transfer each month from checking to savings of 1/12 of the total -- it's $875 for us. Then when a big bill like property tax comes up, I transfer the full amount back from savings to checking before writing the check.

Savings also has enough to cover all insurance deductibles and a reserve for major repairs.

I use YNAB to track my budget, and add $100 each month to short-term catagories like vacation and Christmas gifts.

Regardless, if you want to pay yourself first, move that $500 to a location where you are unlikely to raid it to buy things for the house. You also want to set up a decorating line in your budget so that you have some money planned to satisfy those wants.

[ScrimpAndSave]

Thank you, Zetta. What is YNAB?

[Jazzmint98]

YNAB=youneedabudget.com

[LivingAlmostLarge]

I found it hard to use. Easier to just use excel and save a month of expenses.

[cschin4]

I really never budgeted. I just try to spend less than I make and then focused on building a savings account and EF which could be used to cover the unexpected repairs, bills, etc.

[zetta]

I found it hard to use. Easier to just use excel and save a month of expenses.

YNAB Version 3.0 is in beta, and the usability has been improved a huge amount -- definitely worth checking out if you need some budget software!

[TurnDebtIntoDebt]

One of the mistakes that we make in purchasing homes is that we don't buy what we need in advance in the process of time. What you don't want is to buy a home and then go into further debt trying to furnish it. It is wise to buy a little at a time, keeping it in storage, so that when it's time to buy, you have what you need already and there will be no need for any other loans, including credit card debt. But splitting your mortgage payment in two is a very smart decision. In doing this, more money is going towards the principle of the loan. You're actually making 26 half payments, which comes to 13 full payments... that's an extra monthly payment that is going towards actually paying off your home. Now in regards to saving, that is priority! You need to save and establish an emergency fund and a separate savings as well. Plan for what may happen, such as job loss or lay offs. If it happens, will you be able to sustain for at least 3 months? Furnishing your home may just have to take longer than you want it. It is a decision of whether you want to be financially secure or on your way to losing your home or destroying your credit.

[ScrimpAndSave]

Well, my home is already furnished - and I do have more than 3 months saved...so I think I am in a good spot.

[skydivingchic]

I agree with Zetta regarding saving enough money so that you are living off last month's income. My cashflow has smoothed out tremendously since I was able to start this. No more worrying about bill due dates relative to paychecks or trying to split up paychecks. This also allows you to cashflow smaller unexpected items - you have time to figure out where money will come from. If there are any hiccups in when your paycheck gets deposited, its not such a worry as you have time to sort things out. It took me several months of saving before I had enough money to implement this, but it is one of the best things I've done for myself financially.

[mintguide]

I also never budgeted to that extent though I am sure it is a good plan. I just really look more at the monthly costs and make sure I am covered. As for savings, some months were better than others and sometimes i save more or less depending on what my expenses are.