Ask the Readers: Do You Honestly Follow a Budget? (Chance to win $20)

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Everyone claims to know about budgeting. Many more will say that they have one, and just as many will swear that they follow it. But do they really? Does following a budget involve more than just not overspending on your budgetary categories? Or is it enough to just stay within a general framework so you can pay your bills and not incur any debt?

What do you think it takes to "budget" effectively? And do you do so yourself? (Be honest...not everyone feels like they have to budget to be financially savvy — and that's OK!) Who has taught you the meaning of a budget or has inspired you to follow one? Let us know your thoughts in order to be entered to win one of three $20 Amazon gift cards! Feel free to link to a blog post, if you've written on this topic! We'll include it in our post upon the conclusion of our giveaway!

Win one of three $20 Amazon gift cards:

We're doing three giveaways — one for random comments, one for random Facebook "Likes", and another one for random tweets.

How to Enter:

  1. Post your answer in the comments below, or
  2. Go to our Facebook page, "Like" us, then "Like" the update mentioning this giveaway (you can comment, as well -- but you don't have to for entry.)
  3. Tweet your answer. Include both "@wisebread" and "#WBAsk" in your tweet so we'll see it and count it.

If you're inspired to write a whole blog post OR you have a photo on flickr to share, please link to it in the comments or tweet it.

Giveaway Rules:

  • Contest ends Monday, Aug 30th at 11:59 pm CST. Winners will be announced after Aug 24th on the original post and via Twitter. Winners will also be contacted via email and Twitter Direct Message.
  • You can enter all three drawings — once by leaving a comment, once by liking our Facebook update, and once by tweeting.
  • Only tweets that contain both "@wisebread" and "#WBAsk" will be entered. (Otherwise, we won't see it.)
  • Only those who have "Liked" both our Facebook page and the contest update will be entered.

Good Luck!

Disclaimer: The links and mentions on this site may be affiliate links. But they do not affect the actual opinions and recommendations of the authors.

Wise Bread is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.


Guest's picture
Karen

I've tried several different methods but the biggest features that help me are:

1. Record everything down to the dollar. Be it cash, a check or credit cards, be aware of what you're spending and when. It doesn't have to be fancy and exact in terms of categories but it should at least show the total that you have to spend and a running total of how much you've actually spent. Categories may help you fine-tune and analyze your spending such as what percentage you're spending on housing but you may not want to get picky about if something is groceries vs supplies, dining out vs entertainment with friends.
2. Online sites make it easier to import your monetary activity. Just be sure to make sure that you have any revisions such as gas stations or restaurants which will register initially $1 or the bill and then revise for the actual cost of the gas or include the tip.
3. Include in another column expenses that have yet to be incurred but will definitely hit your bank account that period. Such as checks for the end of the month for rent, utilities, etc. That way you're not "surprised" when the mortgage check hits your account and you've already anticipated the cost.
4. Also, if you go over one month, carry over the excess to the next month so that the overages don't snowball. In general though, I don't carry over any savings if I don't spend my entire budget.
5. For mortgages, I can't do the 13th payment that so many people reccommend. However, I can manage a few extra hundred a month. Also, I'll adjust my mortgage payment every year by a COLA factor. That way I'm paying more additional principal each year in a relatively painless way.
6. I also track how much I spend on "treats." Not neccessities or every time I eat out but if I know that I gave in and ordered that pizza when I had food at home or splurged on a magazine that I didn't need. It's helpful to me to know how much I'm spending on truly discretionary items.

If I really need some retail therapy, I tend to go to the Dollar Store with twenty bucks. I actually find snack food, toiletries, party supplies etc that I'll use and again, it's only $20 and they're all $1 or less. More practical than spending $60 for a new blouse or $100 for the stereotypical shoes.

Guest's picture
Diann R.

No, I can't say that I do follow a budget. I try but it feels too detailed, restrictive and time consuming. I am somewhat reasonable with my money, I pay my bills, bargain shop and look for ways to reduce and save. Things usually work out (Thank God). There are some months that are a very tight squeeze because I do not save ahead for bills that come infrequently but are expensive like insurance, home owners assoc., Medical bills etc. We are paycheck to paycheck with our finances. I know that I can and should do better. I work on improving by reading sites like Wise Bread.

Guest's picture
Jill

We use a budget more as a guideline but we aren't very strict about yet. We ALWAYS keep track of every penny we spend but since we just started using the budget we are just getting an idea of what what we spend and where we could cut. Hoping we get better about it.

Guest's picture
Vanessa

We follow a budget but if we over budget for something or if we earn more money for some reason than normal we don't have a budget for that so that extra money usually gets spent, when it more than likely should get saved, especially for those time when an unexpected bill comes up. Other wise though we follow a strict budget cent to cent.

Guest's picture

I have a budget, but my goal is usually to not spend any money.

New goal, make more money because you can only save so much. :)

Guest's picture
Serena

I definitely do follow a budget! I tracked my spending for the first time this year, and it nearly gave me a heart attack! Now I budget for everything, using some fairly detailed Excel spreadsheets and notebooks, from my rent and insurance to my pets' expenses and money earmarked for savings. So far, I've gone from spending way over my income to living within my means - which feels great!

Guest's picture
Patrick Boutet

We've always been reasonably frugal but really not that crazy on following a exact budget until last year. As a family, what got us going was the realization that fulfilling big dream will require more than wishful thinking, we would need to do something more drastic; our goal is to take off for 6 months travelling with our kids in 5 years. Not something you can plan two week in advance, but in 5 years it's doable. So the first essential ingredient in our recipe is a exciting goal; which we have now. It has been inspirational and essential.

We then built a budget for the year in excel format based on the previous year expenses and budget; where we got depressed a first but eventually realized the full extent of the challenge. Second ingredient; knowing how bad it is do do something about it. It got us to do two things;

First try to see if we can get any extra money by asking more from our respective employers and come up with a strategy to know how well we do every week. For the first point, we got positively surprised of what we got by asking for extra cash for this great project of ours. We than started shopping and trying different budget tools that would help us track our performance along the way; we tried many software for about a month until we found the one that suits our need; It has help tremendously since the real problem in a budget is the "soft" expenses, the 2$ to 10$ you think have no impact overall but really make the whole difference. We've been at it for almost a full year and we are really proud of what we achieved, we put about 10K$ aside on an overall 75K$ family revenues, something we would have never done without the budgeting. Some of our forecast where off but we got things reasonably right to put that mush aside . Next year we will have even more info to build our budget and we think we will not have the surprises that we had last year.

If we had a couple of advise to give, we'd say get your kids involved, they are smart and they can understand the long term goal when they know and they can help you achieve it. Let's be honest, these little guys can have spend more they you need because they don't understand what you are trying to do; you kids must know the value of a buck. Our kids are 6 and 8, and you'd be amaze how supportive they are of the exercise.

Also, track you revenue and expense every week in the tool you want; don't let it slip much more otherwise you'll forget where you spent your money. and by the way, using less cash and more cards, given they don't kill you with charges, will help you track.

Last things, as a couple you have to agree on the goal, the method and discuss the matter regularly; it keeps things smooth and rewarding. Don't try to do it alone it will not work!

Go, you can do it!

Guest's picture
Christina

No, I don't...I just check spending from previous month, make sure nothing's out of whack, and go from there. I am at a point where I do not need to have a set budget for each spending category, but I do have a set amount total for the month...so if I eat out too much, I can't spend as much on groceries or clothing, etc.

Guest's picture
Susannah

I keep a budget mostly to track my spending. As others have said, it makes me question those impulse buys when I know I have to input them into my spreadsheet later! I do pretty well, although the summer has been rough with a lot of weekend activities, vacations, electric bills, etc. I'll just hibernate on through the winter though!

Guest's picture
Geckotraveler

We budget and use the envelope system. Every Friday we withdraw $200. $40 for each of us as an allowance for the week (to be spent any way you want without question), $80 food and $40 date night. I do the grocery shopping and if I go over I take it out of my allowance. My husband will usually take extra out of his allowance if our date night exceeds our alottment, but we usually don't have to worry about that. At the end of the week if we have money left over from grocery shopping, date night or our allowances we have what we call the "stash". The "stash" is used for fun extras like the unexpected wedding gift, baby shower, invitations to a show or restaurant with friends...all of the things that make life unexpectedly sweet. All of our bills are automatically set up to be paid by our bank online. We average the amount for utilities and do not touch the checking amounts unless it starts creeping up, then we transfer some money to the savings account. Expenses like car insurance, vacations, annual clothing allowance, car tags, renter's insurance, birthdays, Christmas, and many other once or twice a year expenses plus money for car repairs, medical emergencies, and unexpected times are added together and divided by 12. Each month that amount is taken out of our checking account and transfered into a savings account. When it comes time to pay for these items that amount is transfered back into checking and the money is always there. This amount is no small amount at over $800 a month, but what most people do not understand is that just because it is not a monthly expense does not mean it is not an expense that needs to be budgeted for on a monthly basis. We usually have money left over at the end of the year and we can put an additional amount into a separate savings account for long term savings, treat ourselves to something unexpected like tickets to a theater productions and donate to charities. Usually we are able to do all three and we love that feeling.

We also have separate long term savings (not tax free), retirement and medical savings that are tax free for our healthcare expenses like eyeglasses, Dr co-pays, RX co-pays, dental bills, etc. All of this comes out of my husbands paycheck before he even gets his check and we never miss the money. This year we knew we both needed new eyeglasses and increased the medical deductions to cover that. It is a huge savings for our taxes.

It may sound as if we are doing really well by some people's standards, but I have huge medical issues, we recently had to relocate because we lost our jobs and luckily DH got a job, but I did not. Neither of us were elligible for unemployment because we were self employed. My job now is to take care of all the things we used to pay for. Great dinners are now at home instead of at restaurants, I do laundry instead of dry cleaning services, we rent and do not own a home, our cars are used and older, but paid in full, we use the library and red box for most of our entertainment, shopping is at thrift stores and consignment shops instead of the mall and department stores.

We lost everything a short while ago and now we have to re-group to be abe to retire with more than just social security. It is not easy, but it is necessary and we are happier than we have been in a long time.

Guest's picture
Karen Isaacson

No, I'm afraid our budgeting consists of our somewhat haphazard response to bills and the like. I've suggested to my husband that we go on the budget payment plan for gas/electricity, and he says he doesn't want to...and we've had a considerable number of unexpected expenses throw our best efforts for a loop.

Doesn't mean we don't try, but we always seem to fall short in following a budget. Wish that weren't the case...

Guest's picture
Julie A

I've tried following budgets with specific guidelines as to how much I can spend on each category each month and failed multiple times. What I find works for me is that I use my income from the previous month to pay all my bills at the beginning of the month including setting aside $100/mo for a vacation I'm planning on taking next year and I have $165/wk automatically sent to a checking account I use for my everyday spending including gas and food when that's gone I can't buy anything else until the next week. It takes some planning to make sure I have enough money for gas to last me til the next monday when the money is deposited but it keeps me on track and if I have any extra I can splurge for something for myself.

Guest's picture
curry crawford

Yes i do,because if you want to have things in the future only you can make it or save it.No one else is going to make it happen ,But you!

Guest's picture
Jason Evans

Honestly no. I set a budget electronically on mint.com and its app. However, the purchases do not always fall under the correct item. For example, gas might be listed under food or entertainment. So with this I just try be reasonable in my spending.

Guest's picture
Christina Barone

I honestly don't have a holiday budget that I enforce but I have a general dollar amount per person that I would like to spend. I try my best to keep to that amount and not go over.

Guest's picture
Mary

I have used a budget in the past, but lost my grip when our money situation improved. Guess what? Now we're back to square one... living paycheck to paycheck again. To help me get on track and stay there, I started a tumlbr blog. My latest update on budgeting is here http://financialtoddler.tumblr.com/post/31217827895/isgolfinthebudget

Starting Friday, we will be doing the old school money envelopes. For us, there is no other way.

Guest's picture
Weimom

I use an excel sheet to calculate my budget every year. There's a free version online so you don't need to purchase Microsoft Office. I start with my annual net income, and divide it into different spending categories (fixed and variable). Starting out, you don't want too many categories, because it can be overwhelming. I check my budget every 2 weeks on pay day to verify I'm on track and in case any emergencies pop up. When you see everything on paper, it makes a huge difference mentally. I keep a copy of my budget in my bag/purse which controls any inclination to overspend.

Guest's picture
Kathy

I've never followed a WRITTEN budget. One reason is that I'm single, so there's really nobody else's actions I need to "rein in", other than my own.
But I DO pay careful attention to just how much I'm spending. I try not to buy anything unless there is a good practical reason, and it's justifiable. I do allow myself a little "fun" spending occasionally. Nobody should have to keep their nose to the grindstone 24/7, especially if they've never permitted spending to get out of hand in the first place.

In my whole life (and I'm almost 60), I've NEVER been in trouble with money, even in the days when I was making barely more than minimum wage, or when I was unemployed for long stretches. I've never borrowed a dime from anybody.

Guest's picture
SADie

hubby gives me certain amt cash for "household expenses"...sure i make a menu, have a small garden, make a list for grocery shopping, use phone as calculator while shopping, try to add dog expenses, etc...but sometimes i need more for items i feel are important to me, to our general health & well-being...since i'm on a fixed income, i "put away" cash to save for "those extras" so as to not create "illness" where there should be none (IMO he's getting sicker all the time)...but when his health "craps out", then i can take him to where he can be tended (LMFAO) since he "hates" docs

so to answer the question "do i follow a budget?" the conundrum is NO...i figure at this state of affairs, or since my life is already so messed up (TBN) life's too short to be TOO rigid about ANYTHING

like right now im trying to gather a little cash to pay my gasoline expenses to visit a wonderful friend (gotta get away from him sometimes) so i'm trying to figure where i can make those "exchanges"