Advice on direct deposit/budget

[bclizzle]

So I have never really budgeted, and I have recently bought a house. I was kind of just going with the wind with purchases, and getting the house together. Ive sat down and taken a look at how much money ive technically spent this year, and lets just say, I need to make a plan.

What I am looking for is advice on where and what I should be putting where. I always use plastic now, Id like to get back into spending cash.

I have a checking and a savings at one back, and a checking at another. I guess im looking for advice on what to allocate where, and how much.

Paid bi-monthly, net is $1720 per pay. My bills are as follows:

Mortgage, $950 due 1st
Gas, $100 round number, 1st week of month
Electric $60 round number, 1st week of month
Water $30 round number, 1st week of month
Internet/cable $105 round number, 1st week of month
Medical $90 round number, 1st week of month
Auto $60 round number, due around the 18th of ea month.

My old plan was to send $375 each pay to the other banks checking account, and that would essentially be my spending money for misc. The rest went into the savings, and then i would just pay my bills out of there. But it has not been working.

[disneysteve]

The first thing you need is a complete budget. You listed $1,395 in bills but you earn $3,440, so there is another $2,045 that you need to account for. Obviously, it covers things like food, gas, clothing, entertainment, travel, charity, etc. as well as savings but you need to get a good handle on how much you are actually spending.

[HappySaver]

Do you have a phone bill? How about insurance? Then there's all the stuff Steve mentioned. Don't forget less regular things like haircuts, maintenance/repair, gifts. You can figure out your annual costs for those and divide by 12.

There are great budgeting tools online - a quick search through this board will give you recommendations. I use a simple spreadsheet. Works just as well for me. I don't consider it a "budget" (that's scary sounding, like a diet). It's a list of average monthly expenses. The key is less about which tool you use, and more about being honest with yourself about what everything really costs, and spending the time to be complete and really capture everything.

[Eagle]

My old plan was to send $375 each pay to the other banks checking account, and that would essentially be my spending money for misc. The rest went into the savings, and then i would just pay my bills out of there. But it has not been working.

Do you pay most of your bills with either your debit card or credit card? If so consider using www.mint.com to track your expenses over the last few months.

As others have suggested your biggest need is to balance your budget. Every dollar should have a home. Your income and expenses should match on paper (or excel) or whatever you use.

What are your monthly expenses on for example:

Eating Out: $?
Groceries: $?
Entertainment: $?
Charity: $?
Cell phone: $?
Car Insurance: $?
Gym Membership: $?
Yard Related: $?
House Related: $?
Hobbies: $?

[Gailete]

Having a checking account for misc. would be not a good idea. I would think it would be way to easy to shop and buy, since you have money in the account instead of knowing that all the money in the ccount is accounted for. If the items that the other posters mentioned is supposed to come from your bill checking account, $750 in the other account is way too much for 'spending money' for someone at your income level. You need to be saving for retirement already as that was another area you didn't mention.

[dcperilli]

I would direct deposit your pay into Checking A, then allocate your savings goals to Savings A and your FIXED expenses to Checking B.

That way Checking A will be strictly for spending money. PM me if needed.

-Dom

[snafu]

I think the others have offered excellent advice and I hope you'll take action. I call it giving every dollar a job! To step back, one basic rule of thumb is to allocate Gross Income 20% Savings [includes retirement]to Pay Yourself First, 50 % to Needs like mortgage, utilities, groceries, transportation, insurance and 30% Wants which are choices like cell, cable, eating out, entertainment, gifts, clothes [items you'd drop if you were on unemployment benefits]. If you look at your spending for the past 6 months, how much went to Savings/Needs/Wants?

I offer as suggestions....Home ownership gets expensive so we've been designating 1% of net income to house maintenance fund as a budget line item. I arbitrarily allocate 17% of net for food including eating out or take out as it was the figure given as 'average' on a government report. I do a menu plan to avoid the stress of 'what's for dinner' but challenge myself to spend less thereby creating a personal slush fund. DH and I each have a cash allowance for non accountable spends and once the sum is gone for the month, so is the spending in that category.

You need to decide what's important to you, set figures and challenge yourself to stay within those parameters. It helps to have a long term goal to work towards. I wonder if you've read 'The Automatic Millionaire,' or any of the quick reads often mentioned here.

[bclizzle]

thanks for all of the replies, sorry hectic past few days.

Those are all of my actual "bills". No cell phone. Insurances were mentioned. I also allocate 10% + 1% match to my 401k, I did not mention that since it did not affect my net income.

Since I have bought the house it has been so hard for me to keep track of what was going where financially the last few months. I know its something I need to work on, Ive sort of fallen into that new house trap that I always said I wouldnt.

I almost feel like I need to do something new just to sort of shock the system, so to speak