Do You Budget?

[MonkeyMama]

Re: Do You Budget?

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]

Re: Do You Budget?

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]

Re: Do You Budget?

Wow safari, you save more than most people make!

[kv968]

Re: Do You Budget?

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]

Re: Do You Budget?

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!

[Budgeteer]

Re: Do You Budget?

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]

Re: Do You Budget?

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]

Re: Do You Budget?

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]

Re: Do You Budget?

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.

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]

Re: Do You Budget?

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]

Re: Do You Budget?

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]

Re: Do You Budget?

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]

Re: Do You Budget?

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]

Re: Do You Budget?

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]

Re: Do You Budget?

spend some, save some, give some.

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