As you metioned above about living above/below your means... I feel this is one of the biggest contributions to financial troubles. I know many individuals and famlies who live this way. In one sense it gives individuals the motivation to strive to do more and make their money go further. However, more often than not this is a continious downward spiral which inevitably ends up in finanical troube due to individulas pushing the boundaries on their living means.
The best way to keep a budget is to write down everything that you "need" to spend money on each month. The write down how much you want to save each month. If the two add up to more than you make, you either have to cut down on your "needs" or get another job. Easier to cut your "needs" though as you will then discover that you didn't really need them after all. I find that when I see it in writing in front of me, it makes it more real and makes you realize the realities.
I have a budget laid out monthly that I have followed very strictly for a few years. I allow money for a savings account, emergency account, investment account. If I have any left over then I use that to purchase something I like or want. It's always good to have a budget and stick to it and by doing that rewarding yourself as well! Keep up the great site, this is absolutely the best personal finance site on the net!
I tried my own budget in the past but it was more of a cash flow sheet. I itemized all my expenses, even the smallest ones. I even made a pie chart in excel to visually see where most of my money was going and I became conscience with spending money in these categories in the next month that came. It helped me realize a lot but it was most helpful in saving me money. When my birthday came around, I did so many transactions at one point that I didn't remember them and I stopped itemizing for a while until I finally just stopped completely. Now, I know I am spending way more money than I ever did when I was keeping track so I think it's time to act with a budget that works!
I don't think that most people understand what a budget is. A budget is simply a financial "plan." All plans are subject to the situation that reality presents, and therefore must be flexible and subject to revision as reality dictates. I make a budget each year, and examine how I am doing at the end of each month. At that point in time my budget gets revised for the realities of variations in income and expenses. At this point in time I adjust the budget (or plan) for what the reality dictates. I have never been disapointed, and I have never overexpended the original plan.
I don't really have a budget.. but I put a certain percentage of my check into checking and the rest into savings & I only allow myself to spend the available balance in checking.
I think the most succinct explanation for the type of budget I have was something I read on my favorite budgeting board. I'm not sure if I'm allowed to mention the name here.
Budgeting is telling your spouse that while there may be several thousand dollars in the bank, you can't afford that $2 cup of coffee because that budget category has been used up for this month.
We just started a real budget this month and it's been quite a test. We were good until about the 20th and then everything started to slip. I've made some adjustments for next month and we've written out our savings goals as motivation to stick with it.
My husband and I have listed a number of different financial goals including paying of credit card debt, saving up cash for a car and supplementing our monthly income to affort to rent a home while patiently waiting for our condo to sell in this crazy aweful market. This would be a great resource for our family
I think a budget is very helpful in getting some more money, however, more importantly I think is actual discipline. You really can't reach any financial goals if you don't have the discipline to stick with the set budget.
Interesting question!
I have had several budgeting incarnations over the years.
When I first learned to budget and become fiscally responsible and aware I had a budget that tracked everything to the penny in a big looseleaf with a zillion categories - it worked well for a number of years until I felt comfortable enough with my 'evolution' to drop it.
We did fine for a long time - periodically I'd rework a budget but not be too specific - to give myself some framework - but eventually we started getting into trouble again - nothing awful - but building some debt - eliminating the cushion we'd kept in the past - it happened during a stressful challenging time in our lives and it's what you'd expect if you had no plan on target to keep you on track.
I just decided to start a new budget and try doing all cash for 'flexible' categories like groceries, clothing, gifts etc. The budget is very specific and based on no leftovers [savings is a category as is debt repayment]. I've spent the month of August just spending cash and keeping a really close eye on my credit cards online to find the things that I've been forgetting to add - for example today searching reminded me of hubby's skype expense, our ezpass [toll] charges and the newspaper. By next month I feel confident that the budget will really be all inclusive. I've worked out a plan to move longer term money [for savings but also for things like our property taxes] into a separate fund so it doesn't get compromised, and money 'for cash' accounts will also be transferred into a local bank so I can make the [I'm hoping] consciousness raising trek to get exactly the cash denominations and amounts I need to fill my envelopes.
So I've done different things but I'm learning that, for ME at least, flexibility is not really working. But being TOO complex, needing to keep track of every purchase and find where it belongs - is self-defeating for my nature. I'm hoping the zero based budget with cash envelopes for flexible spending will be the best of both worlds -I don't need to write down every purchase from the fruit stand - just pay for it out of the correct envelope and stop spending when it's empty!
I think it takes a lot of willpower and stamina and motivation (all more or less the same things) to keep at it and to make it a habit. You definitely have to WANT it bad enough. I do it on and off - I think I am getting really good at being frugal out of habit, but sometimes I just get tired and want to let go.
I budget and only recently started to. I have a fairly strict budget. I've tried this before but always fought it. I am taking the Financial Peace University by Dave Ramsey and it teaches you how to make and follow a successful budget. :) It's so worth it and makes a difference.
Sadly, I have never been able to keep to a strict budget. My solution is to use "pay myself first." I do 401k auto-deposits, auto-deposit to my long term savings, and auto deposits to my slush fund for periodic big ticket items. Could I save more than this? Maybe, but time is scarce for me. I'd rather have the few extra hours per month of leisure.
I recently devised a budget, but following it has been a struggle. It leaves me only $200 at the end of all the monthly bills for gas, groceries, things I need and possibly eating out (which is off the books right now)! So I've been "borrowing" from other categories. I'm hoping things even off soon.
I don't really have a budget. I earn a good living, have a reasonable amount in easy to access savings/emergency account, put a significant portion away for retirement, give a significant portion to charity and live below my means. My only debs is the mortgage on my house (30 year note, will be payed off in a total of about 17 years). I have a good idea of my recurring monthly expenses as well as what I generally spend on day-to-day living. But, other than that, I don't worry about money too much.
I probably should have a more planned out financial plan/budget. But I've found that when I get too detailed in tracking my money I get mildly obsessed with it and that never goes anywhere good. I probably should figure out a way to lean more towards "real budget" but I'm lacking the motivation to do so.
OMG - this is exactly what I need something simplified that I can get started right away and it can change my life forever. Thank you for thinking of us that are novices at budgeting.
Yes, in fact we budget so precisely that our Financial Adviser has told other clients to see us for an example of how to do it! My wife is a budgeting genius!!
Since I get paid once a month, a budget is key in my house!! Since I am salary I know how much each month and how to plan my spending accordingly. Summer tends to be more expensive for us ~ higher electric bills since its hot and the kids are at home and back to school time. I use an excell spreadsheet with a tab for every month. I can put on yearly expenses (vehicle tags, car/house insurance, etc) so that I can put a little extra money away the months before to be able to pay them!!
Getting my kids involved helps alot also. They see that when the electric bill is $200, that we don't have money for say, the movies. And they help more with turning the lights out or lowering the thermostate (we are at 110 today!!).
I always have wanted to. But, I have no idea how to seriously sit down and work out a budget and then how to follow it. As my life is undergoing MAJOR changes, this is a life-skill that I could use some real help with!
As you metioned above about living above/below your means... I feel this is one of the biggest contributions to financial troubles. I know many individuals and famlies who live this way. In one sense it gives individuals the motivation to strive to do more and make their money go further. However, more often than not this is a continious downward spiral which inevitably ends up in finanical troube due to individulas pushing the boundaries on their living means.
The best way to keep a budget is to write down everything that you "need" to spend money on each month. The write down how much you want to save each month. If the two add up to more than you make, you either have to cut down on your "needs" or get another job. Easier to cut your "needs" though as you will then discover that you didn't really need them after all. I find that when I see it in writing in front of me, it makes it more real and makes you realize the realities.
I have a budget laid out monthly that I have followed very strictly for a few years. I allow money for a savings account, emergency account, investment account. If I have any left over then I use that to purchase something I like or want. It's always good to have a budget and stick to it and by doing that rewarding yourself as well! Keep up the great site, this is absolutely the best personal finance site on the net!
I tried my own budget in the past but it was more of a cash flow sheet. I itemized all my expenses, even the smallest ones. I even made a pie chart in excel to visually see where most of my money was going and I became conscience with spending money in these categories in the next month that came. It helped me realize a lot but it was most helpful in saving me money. When my birthday came around, I did so many transactions at one point that I didn't remember them and I stopped itemizing for a while until I finally just stopped completely. Now, I know I am spending way more money than I ever did when I was keeping track so I think it's time to act with a budget that works!
just found out that my grandfather years ago would eat a clove a day. no wonder he lived to be 94 and was never sick! he died of old age.
I don't think that most people understand what a budget is. A budget is simply a financial "plan." All plans are subject to the situation that reality presents, and therefore must be flexible and subject to revision as reality dictates. I make a budget each year, and examine how I am doing at the end of each month. At that point in time my budget gets revised for the realities of variations in income and expenses. At this point in time I adjust the budget (or plan) for what the reality dictates. I have never been disapointed, and I have never overexpended the original plan.
I don't really have a budget.. but I put a certain percentage of my check into checking and the rest into savings & I only allow myself to spend the available balance in checking.
I think the most succinct explanation for the type of budget I have was something I read on my favorite budgeting board. I'm not sure if I'm allowed to mention the name here.
Budgeting is telling your spouse that while there may be several thousand dollars in the bank, you can't afford that $2 cup of coffee because that budget category has been used up for this month.
We just started a real budget this month and it's been quite a test. We were good until about the 20th and then everything started to slip. I've made some adjustments for next month and we've written out our savings goals as motivation to stick with it.
My husband and I have listed a number of different financial goals including paying of credit card debt, saving up cash for a car and supplementing our monthly income to affort to rent a home while patiently waiting for our condo to sell in this crazy aweful market. This would be a great resource for our family
I think a budget is very helpful in getting some more money, however, more importantly I think is actual discipline. You really can't reach any financial goals if you don't have the discipline to stick with the set budget.
Interesting question!
I have had several budgeting incarnations over the years.
When I first learned to budget and become fiscally responsible and aware I had a budget that tracked everything to the penny in a big looseleaf with a zillion categories - it worked well for a number of years until I felt comfortable enough with my 'evolution' to drop it.
We did fine for a long time - periodically I'd rework a budget but not be too specific - to give myself some framework - but eventually we started getting into trouble again - nothing awful - but building some debt - eliminating the cushion we'd kept in the past - it happened during a stressful challenging time in our lives and it's what you'd expect if you had no plan on target to keep you on track.
I just decided to start a new budget and try doing all cash for 'flexible' categories like groceries, clothing, gifts etc. The budget is very specific and based on no leftovers [savings is a category as is debt repayment]. I've spent the month of August just spending cash and keeping a really close eye on my credit cards online to find the things that I've been forgetting to add - for example today searching reminded me of hubby's skype expense, our ezpass [toll] charges and the newspaper. By next month I feel confident that the budget will really be all inclusive. I've worked out a plan to move longer term money [for savings but also for things like our property taxes] into a separate fund so it doesn't get compromised, and money 'for cash' accounts will also be transferred into a local bank so I can make the [I'm hoping] consciousness raising trek to get exactly the cash denominations and amounts I need to fill my envelopes.
So I've done different things but I'm learning that, for ME at least, flexibility is not really working. But being TOO complex, needing to keep track of every purchase and find where it belongs - is self-defeating for my nature. I'm hoping the zero based budget with cash envelopes for flexible spending will be the best of both worlds -I don't need to write down every purchase from the fruit stand - just pay for it out of the correct envelope and stop spending when it's empty!
Wish me luck ;)
Thanks for the mention!
I think it takes a lot of willpower and stamina and motivation (all more or less the same things) to keep at it and to make it a habit. You definitely have to WANT it bad enough. I do it on and off - I think I am getting really good at being frugal out of habit, but sometimes I just get tired and want to let go.
I budget and only recently started to. I have a fairly strict budget. I've tried this before but always fought it. I am taking the Financial Peace University by Dave Ramsey and it teaches you how to make and follow a successful budget. :) It's so worth it and makes a difference.
Sadly, I have never been able to keep to a strict budget. My solution is to use "pay myself first." I do 401k auto-deposits, auto-deposit to my long term savings, and auto deposits to my slush fund for periodic big ticket items. Could I save more than this? Maybe, but time is scarce for me. I'd rather have the few extra hours per month of leisure.
I have 20 years worth of proof of budgeting. It takes a passion to be in control in order to monitor your spending.
I recently devised a budget, but following it has been a struggle. It leaves me only $200 at the end of all the monthly bills for gas, groceries, things I need and possibly eating out (which is off the books right now)! So I've been "borrowing" from other categories. I'm hoping things even off soon.
I don't really have a budget. I earn a good living, have a reasonable amount in easy to access savings/emergency account, put a significant portion away for retirement, give a significant portion to charity and live below my means. My only debs is the mortgage on my house (30 year note, will be payed off in a total of about 17 years). I have a good idea of my recurring monthly expenses as well as what I generally spend on day-to-day living. But, other than that, I don't worry about money too much.
I probably should have a more planned out financial plan/budget. But I've found that when I get too detailed in tracking my money I get mildly obsessed with it and that never goes anywhere good. I probably should figure out a way to lean more towards "real budget" but I'm lacking the motivation to do so.
We really need to start following a budget as we'll be going to one income in January.
We had our identity stolen over 10 years ago. Not fun.
OMG - this is exactly what I need something simplified that I can get started right away and it can change my life forever. Thank you for thinking of us that are novices at budgeting.
Yes, in fact we budget so precisely that our Financial Adviser has told other clients to see us for an example of how to do it! My wife is a budgeting genius!!
Since I get paid once a month, a budget is key in my house!! Since I am salary I know how much each month and how to plan my spending accordingly. Summer tends to be more expensive for us ~ higher electric bills since its hot and the kids are at home and back to school time. I use an excell spreadsheet with a tab for every month. I can put on yearly expenses (vehicle tags, car/house insurance, etc) so that I can put a little extra money away the months before to be able to pay them!!
Getting my kids involved helps alot also. They see that when the electric bill is $200, that we don't have money for say, the movies. And they help more with turning the lights out or lowering the thermostate (we are at 110 today!!).
I always have wanted to. But, I have no idea how to seriously sit down and work out a budget and then how to follow it. As my life is undergoing MAJOR changes, this is a life-skill that I could use some real help with!