Need Some Budgeting Advice

[cptacek]

I have my bills planned out for the rest of the year. I have an account just for bills and I have a spreadsheet that is just like a checkbook register to keep track of it. If you are starting from scratch, use your current balance, then project when you will get paid, how much, and what your bills are. I budget for the highest bill I have ever gotten for that service, and if it comes in lower than that, I can use that money for something else.

To do this, you need to know when the bills are due, if you can schedule them ahead, if you have to mail them and what day you have to mail them, or if they are automatically deducted, and what the highest you have paid for that bill is.

Every time we write a check, pay a bill, use the debit card, get paid, etc, I enter that transaction and color that line gray (in correct date order). When I have automatic deductions, on that day, I color that line gray. Anything that is not gray is coming up. I have a box I color black (and enter a letter in so I can filter that out) when I reconcile this register with the bank statement.

I don't think I'm explaining this very well. Let me try again. My spreadsheet has rows like this:
Check #; Date; Reconciled?;Description;Debit;Deposit;Total
;09/12/2008;X;Beginning Balance;;;$625
1871;09/14/2008;;Westar Energy;$125;0;$500
Auto; 09/16/2008;;AT&T;$78.00;0;$422
------------------------------------------------------
1872;09/17/2008;;Alltel;$68.00;0;$354
BP;9/20/2008;;City Department;$104;0;$250
;09/25/2008;;Pay Day;0;$300;$550

Today is the 16th. Everything above that line would be gray, everything below that line would be white. The current balance today is $422, after the automatic payment to AT&T. I am planning on paying Alltel $68 tomorrow (with Bill Pay), and when I do that, I'll color that line gray. On the 20th, I have budgeted $104, but the bill really is only $98. So, when I make that payment, I change the $104 to $98. The balances update automatically (ah the magic of formulas in spreadsheets)

I have it like this until the end of the year. I know I have a 6 month insurance payment in November, so I have that in the spreadsheet for November. If I ever project that I will be in the red, I have to find a way to cover that...either I have to budget more or cut somewhere...but because I can see that 6 months in advance I can make small changes instead of freaking out the month the bill comes. It also helps that I budget for the largest amount the bill has ever been, because electric is lower in winter and gas is lower in summer, so that helps even out the projections as well. If I am starting to accumulate money in the bill account (which I should because I should come in under budget every month), I can play with the numbers and decide if I can manage to allocate it to something else.

[TigerFan06]

I'm definitely going to print this thread out. More ideas than I had expected.

[Aleta]

TigerFan06: I use a brick and mortar bank for various accounts including my husband's business account, money market, and checking. I deposit the checks from my husband's business into my money market account which earns interest of 3.50 APY. All categories go into there. At the first of the month, I transfer money that will be paid out for the month including food, water, electricity, telephone/internet, small automatic investment amounts and any money gifts that will be paid out. I write the larger checks from my money market deposit account such as credit card (paid off monthly), estimated taxes (quarterly), house insurance (yearly), car insurance (6 mos), etc. I keep the majority of money in this account. I can only write out 3 checks from this account and transfer 3 times.

As Steve said, it is good t have a buffer in your checking account because anything can come up and you don't want to use one of your 3 checks from a money market deposit account for a small expenditure.

Also, I agree that you should contribute up to the max for all of the reasons that Steve and another poster mentioned. The match is free money.

I also use online savings accounts and CD's to make more money for items that won't be needed for a time. ING Direct, FNBO Direct, and Emigrant are a few that many here use.
As Steve said, it is good

[Well Spent]

Remember to always set aside some money for incidentals. You never know if your refrigerator will stop working or your washer and dryer. These are unexpected costs that can happen to any appliance. By having a little money set aside for these types of occurrences, it will help you stay on track with your monthly bills. This way you will not fall behind at all, because once you fall behind it becomes that much more difficult to get caught up.

.

Yeah, personal finance columnist Michelle Singletary calls this a Life Happens fund. I'm working on one right now for car maintenance, appliance upkeep, etc.

[Aleta]

These funds are very important to add to your budget as Well Spent said. I allocate money each month to House Maintenance, Car Maintenance, Small furnishings. I also allocate money to Holidays, Gifts, and Vacation. These expenses are going to happen so you might as well plan and budget for them.

I usually have an ongoing fund for furnishing the house which is a small amount every month, but I increase it when I'm planning on purchasing a planned expense.