Ahhh, the budget. We have a love/hate relationship with ours. I first understood the idea of a budget as a "spending plan" via the book Debt Proof Living. Since then we use our budget as the basic safety bumpers to not fall over the edge back into debt. That's the part of it we love. We also try to use it to track our spending & decide how we'll spend. That's the part we tend to hate because we can never quite get keep track or plan as much as we want to.
I've setup a GoogleDoc outlining our bills each month - it is broken in two, to coincide with my paychecks (mid and end of month). All bills are automatically setup to auto pay through my bank online.
This GoogleDoc auto tallies our planned expenditures for the month (I update it regularly as we have irregular outgoing payments). Included in these expenditures, is the 'cash' that we have budgeted for various things that we expect to need money for each month - groceries, kids clothing, date night, family fun are the main categories. (We review family fun money with our kids each week and decide how we'd like to spend it. My wife plans weekly meals and home needs based on our 'grocery' budget. Our date nights - as many with kids will relate - don't always happen bi-weekly, or even monthly, so we generally have a nice amount saved up to treat ourselves when the opportunity arises.)
The total outgoing is tallied at the bottom, beneath which is a calculation to determine how much we'll have left over for savings or what have you. (some months result in addition income from commissions or odd jobs, so this number is usually changing as well.)
So while we budget the majority of our expenditures, we still have the occasional night where we say - 'let's just go out' - and that just comes from the 'left over' pot of gold...
It's not perfect, but we've been sticking to it pretty well for the better part of a year, and we're finding that there's a lot more money to go around at the end of our financial obligations, when we track it a little more closely.
Oh, and using Mint.com's trends feature was a large part of what helped us to initially set our budgets. It's a great too, and you can't beat free!
I have tried unsuccessfully numerous times to create and stick to a budget. This book seems like the answer to a prayer.
My situation is that I was unemployed for over a year and I was forced to tap into my savings and retirement funds for everyday expenses.
Now I have a new position that is $20K less than I was making previously. My 17 yo hs. senior daughter and I are living paycheck to paycheck and would like to find a way to spend better on a very tight budget. Especially as we will be applying to colleges soon and incurring more expenses.
I also use YNAB, and have found that it really works well with me. I've tried so many different types of budgeting systems, but have found that I prefer a system that is 1) simple (just want my budget, not my investments, net worth, etc.), 2) manual (it helps me to actually enter the data myself rather than importing it AFTER I spent it), and 3) accessible on multiple devices / places (web-based or Dropbox is key).
Also, it really helps to be realistic when budgeting. I struggled with budgeting for years since I tried to penny pinch too much. If you keep it realistic, you have a much better chance of staying within or below your budget.
I try... all of my fixed monthly expenses are in a spreadsheet to be paid on the 1st and 15th of the month and these are paid immediately. The problem is the other expenses... I'm working on those.
Yes, indeedy. If we didn't budget, we'd be sunk. We started by tracking expenses for a month and set up the categories from there. It morphed into an on paper envelope system. Food and mad money comes out of actual cash. When we encountered a couple whack-yourself-in-the-head unexpected expenses we added an "emergency" category. It's been working fairly well. We're not in debt, and have something in savings.
WAIT! DON'T TEAR IT UP! I, too, received the same kind of scam, but I didn't fall for it at all. So I contacted the Texas Attorney General and discovered that the FBI is quite interested in these scams. Keep all the emails, the check, the envelope the check came in, and everything else pertinent to the scam. The FBI is investigating scams, and especially ones that use Western Union or other wire services. This is not just a scam; it is HIGHLY illegal. So contact your Attorney General for your state and follow through with reporting the scam. EVEN IF YOU FELL FOR IT. Especially if you fell for it. Don't be so embarrassed that you will let these people get away with their activities and continue preying on others. Good luck, and God bless.
Why do I need this book? I'm in the process of getting divorced. I have a mountain of debt from the marriage because I wasn't "allowed" to be involved in financial decisions for 15 years. I'm desperately trying to hold onto my house. I'm the mother of two girls who need me to be a good role model so they don't end up in the same mess in the future. Oh, and I work for a non-profit that does good work but can't afford to pay much more than poverty level wages. Yeah, I need this book.
The best way we have found to budget and stay on it is Dave Ramsey's plan of the envelope system. We put our budget on paper, take out the allotted amount of cash for each category, put it in that category's envelope. When the cash is gone, it is gone until next pay period. It has helped us realize how much we are spending on frivolous things when we have to reach into our cash envelope. It is easy to have mindless spending when you whip out the credit card for everything.
As a UK based travel blog editor I did some research into Mastercard prepaid debit cards as paying for your Ryanair flight with these cards is the only way to avoid paying the £5 per person per flight admin fee levied by Ryanair
Thrift store shopping, garage sales, coupons and deals has helped me stay within my budget. We do stray from time to time, but hey we work hard and deserve it
I have three high-yield checking accounts with three different institutions. I am currently earning 4.25% on $25k, 4.26% on $10k, and 4.09% on another $10k. I don't find the requirements a problem at all. For the direct deposits, my employer will break out my payments into as many accounts as I want. For the debit purchases, I use the cards online to make $1 payments to my cell phone account. I make over $130/month in interest.
I have 5 bank accounts:
1) Wachovia/Wells Fargo Checking Account: This is a free checking account that I have just for the convenience of the locations so that I can easily deposit any cash or checks I acquire. I earn no interest and keep the balance at $20.
2) FNBO Direct Online Savings Account: This is a free online savings account that currently pays 1.1% interest. I use it because it initiates free transfers both to and from it, so I can grab the money out of my Wells Fargo account and transfer it to one of my high-interest accounts for free, using FNBO as the middle man. I keep the balance at $20.
3) Incommons Bank High-Yield Checking Account: This is a free (Kasasa) checking account that is paying 4.25% interest up to $25k. I keep exactly $25k in this account.
4) Founders Bank High-Yield Checking Account: This is a free (Kasasa) checking account that is paying 4.26% interest up to $10k. I keep exactly $10k in this account.
5) Legend Bank High-Yield Checking Account: This is a free checking account that is paying 4.09% interest up to $25k. I am working on maxing out this account.
I log into all of my accounts multiple times a week. I never pay any fees. I never receive paper statements.
@Dawn - What a concept! And like you say, you'll always move into a place where the furniture is perfectly suited to it. What a great way to have a change of scenery too.
@St Augustine - Thanks for the feedback. For US residents, the Travelex Cash Passport terms and conditions that I've outlined in this post still stand true. So it looks like as a UK resident, you get a great deal! I'm glad you have found an option that works well for you, and thanks for sharing.
My husband and I have completely different philosophies. I have a spreadsheet with all our expenses mapped out a year in advance so I can see if we've got any huge bills coming up that we need to be prepared for. He just can't wrap his head around that concept and figures if he doesn't wildly overspend everything will somehow work out. Umm, yeah, because I periodically show him my projections and tell him we've got to seriously cut back on nonessentials for a while.
My "budget" is just a total monthly expenditure that I aim to stay below. At 22 years old, I'm single with no kids and living by myself, so it's probably easier for me than others. I earn about $3500 in post-tax and post-401k income every month and usually don't spend more than $1200-1300. Since I pay for everything with my rewards credit card, I'm able to track the sum of my expenses on a regular basis. I'm frugal as it is, so I usually don't need much oversight, but I like that I found an amount that allows for comfortable living and exciting savings.
I don't follow a budget! I just started working a year ago and started out being too thrifty and conservative with money. Now I moved to a cheaper rent place and have been too spendy. A budget (where I budget for fun things and wants, too) might help me balance with less worry.
We just started this month with a written budget and use mint.com to help us track our money. So far so good except I didn't allow enough for transportation and school also started. It's a work in progress, but it keeps us motivated to try better.
We're not great at following our budget to the penny, but having it and keeping track of where, exactly, our money goes is very helpful. Because we plan to spend so much less than our income, we're able to consistently invest and save a good portion of it. But we don't sweat it if, for instance, we make a conscious decision to buy organic milk every week. And while we may not have an earmarked emergency fund or car-replacement budget, we do ok.
I try to budget, but so far it isn't working. I always spend over my budget every month for the past 6-8 months. I'm probably doing something wrong or maybe I don't have the will to keep my budget in tack. Having this eBook would be great. I love to read personal finance blogs and books. Can you send one my way?
One of the first things we did after saying our vows three years ago was draw up a budget, and we've kept one ever since (in varying degrees of strictness). We're in a lean time now, with my husband pursuing his doctorate and us living on my (meager) reporter's salary.
I think the most important thing in budgeting is to be realistic. We tried to budget just $15 a month for "entertainment," - eating out, watching movies, going to coffee shops, etc. And we routinely went over that amount because it's not realistic for two people and because I knew we could get away with it (I think I'm the weak link in this chain!).
Also important is to work together if you're a couple; If one person makes the budget, the other might be less likely to stick with it or more likely to be frustrated. If you work together, it's a lot easier.
And keep an updated record of what you've actually spent each month. Then at the end of the month you can tell if you can splurge (ice cream dates!).
Budgeting has really paid off for us. We bought a (somewhat rundown) house debt free, largely because of careful budgeting even when we didn't need to.
I have a very detailed budget. I enjoy tracking it. Do I follow it? I guess it depends on who you talk to. I believe that I don't follow it as well as I'd like. My husband feels like I am the budget police. We agree at the 50,000 foot level about saving and spending but when it comes to individual things especially for the kids, DH is more apt to say 'spend' when I would say 'we don't have the money for it.' DH counts on his passive income/extra income (he is full commission) to get us through the shortfalls whereas I believe that his passive income should go directly to savings and if we have to use it, we've definitely failed our budget. We haven't fallen yet but I know I need to get a new job in the next 12 months and I am concerned I might have to take a pay cut and have increased commute.
Ahhh, the budget. We have a love/hate relationship with ours. I first understood the idea of a budget as a "spending plan" via the book Debt Proof Living. Since then we use our budget as the basic safety bumpers to not fall over the edge back into debt. That's the part of it we love. We also try to use it to track our spending & decide how we'll spend. That's the part we tend to hate because we can never quite get keep track or plan as much as we want to.
I've setup a GoogleDoc outlining our bills each month - it is broken in two, to coincide with my paychecks (mid and end of month). All bills are automatically setup to auto pay through my bank online.
This GoogleDoc auto tallies our planned expenditures for the month (I update it regularly as we have irregular outgoing payments). Included in these expenditures, is the 'cash' that we have budgeted for various things that we expect to need money for each month - groceries, kids clothing, date night, family fun are the main categories. (We review family fun money with our kids each week and decide how we'd like to spend it. My wife plans weekly meals and home needs based on our 'grocery' budget. Our date nights - as many with kids will relate - don't always happen bi-weekly, or even monthly, so we generally have a nice amount saved up to treat ourselves when the opportunity arises.)
The total outgoing is tallied at the bottom, beneath which is a calculation to determine how much we'll have left over for savings or what have you. (some months result in addition income from commissions or odd jobs, so this number is usually changing as well.)
So while we budget the majority of our expenditures, we still have the occasional night where we say - 'let's just go out' - and that just comes from the 'left over' pot of gold...
It's not perfect, but we've been sticking to it pretty well for the better part of a year, and we're finding that there's a lot more money to go around at the end of our financial obligations, when we track it a little more closely.
Oh, and using Mint.com's trends feature was a large part of what helped us to initially set our budgets. It's a great too, and you can't beat free!
I have tried unsuccessfully numerous times to create and stick to a budget. This book seems like the answer to a prayer.
My situation is that I was unemployed for over a year and I was forced to tap into my savings and retirement funds for everyday expenses.
Now I have a new position that is $20K less than I was making previously. My 17 yo hs. senior daughter and I are living paycheck to paycheck and would like to find a way to spend better on a very tight budget. Especially as we will be applying to colleges soon and incurring more expenses.
I also use YNAB, and have found that it really works well with me. I've tried so many different types of budgeting systems, but have found that I prefer a system that is 1) simple (just want my budget, not my investments, net worth, etc.), 2) manual (it helps me to actually enter the data myself rather than importing it AFTER I spent it), and 3) accessible on multiple devices / places (web-based or Dropbox is key).
Also, it really helps to be realistic when budgeting. I struggled with budgeting for years since I tried to penny pinch too much. If you keep it realistic, you have a much better chance of staying within or below your budget.
I try... all of my fixed monthly expenses are in a spreadsheet to be paid on the 1st and 15th of the month and these are paid immediately. The problem is the other expenses... I'm working on those.
living on low income. every little bit helps
Yes, indeedy. If we didn't budget, we'd be sunk. We started by tracking expenses for a month and set up the categories from there. It morphed into an on paper envelope system. Food and mad money comes out of actual cash. When we encountered a couple whack-yourself-in-the-head unexpected expenses we added an "emergency" category. It's been working fairly well. We're not in debt, and have something in savings.
WAIT! DON'T TEAR IT UP! I, too, received the same kind of scam, but I didn't fall for it at all. So I contacted the Texas Attorney General and discovered that the FBI is quite interested in these scams. Keep all the emails, the check, the envelope the check came in, and everything else pertinent to the scam. The FBI is investigating scams, and especially ones that use Western Union or other wire services. This is not just a scam; it is HIGHLY illegal. So contact your Attorney General for your state and follow through with reporting the scam. EVEN IF YOU FELL FOR IT. Especially if you fell for it. Don't be so embarrassed that you will let these people get away with their activities and continue preying on others. Good luck, and God bless.
Why do I need this book? I'm in the process of getting divorced. I have a mountain of debt from the marriage because I wasn't "allowed" to be involved in financial decisions for 15 years. I'm desperately trying to hold onto my house. I'm the mother of two girls who need me to be a good role model so they don't end up in the same mess in the future. Oh, and I work for a non-profit that does good work but can't afford to pay much more than poverty level wages. Yeah, I need this book.
The best way we have found to budget and stay on it is Dave Ramsey's plan of the envelope system. We put our budget on paper, take out the allotted amount of cash for each category, put it in that category's envelope. When the cash is gone, it is gone until next pay period. It has helped us realize how much we are spending on frivolous things when we have to reach into our cash envelope. It is easy to have mindless spending when you whip out the credit card for everything.
As a UK based travel blog editor I did some research into Mastercard prepaid debit cards as paying for your Ryanair flight with these cards is the only way to avoid paying the £5 per person per flight admin fee levied by Ryanair
Thrift store shopping, garage sales, coupons and deals has helped me stay within my budget. We do stray from time to time, but hey we work hard and deserve it
I have three high-yield checking accounts with three different institutions. I am currently earning 4.25% on $25k, 4.26% on $10k, and 4.09% on another $10k. I don't find the requirements a problem at all. For the direct deposits, my employer will break out my payments into as many accounts as I want. For the debit purchases, I use the cards online to make $1 payments to my cell phone account. I make over $130/month in interest.
I have 5 bank accounts:
1) Wachovia/Wells Fargo Checking Account: This is a free checking account that I have just for the convenience of the locations so that I can easily deposit any cash or checks I acquire. I earn no interest and keep the balance at $20.
2) FNBO Direct Online Savings Account: This is a free online savings account that currently pays 1.1% interest. I use it because it initiates free transfers both to and from it, so I can grab the money out of my Wells Fargo account and transfer it to one of my high-interest accounts for free, using FNBO as the middle man. I keep the balance at $20.
3) Incommons Bank High-Yield Checking Account: This is a free (Kasasa) checking account that is paying 4.25% interest up to $25k. I keep exactly $25k in this account.
4) Founders Bank High-Yield Checking Account: This is a free (Kasasa) checking account that is paying 4.26% interest up to $10k. I keep exactly $10k in this account.
5) Legend Bank High-Yield Checking Account: This is a free checking account that is paying 4.09% interest up to $25k. I am working on maxing out this account.
I log into all of my accounts multiple times a week. I never pay any fees. I never receive paper statements.
@Dawn - What a concept! And like you say, you'll always move into a place where the furniture is perfectly suited to it. What a great way to have a change of scenery too.
@St Augustine - Thanks for the feedback. For US residents, the Travelex Cash Passport terms and conditions that I've outlined in this post still stand true. So it looks like as a UK resident, you get a great deal! I'm glad you have found an option that works well for you, and thanks for sharing.
At my worst, I was about $30K in debt. Took me a few years to get out of it. Through all of that and then some, I never once was on a budget.
To me, it isn't a requirement.
What is, is....
Eliminate all unnecessary spending.
Save money wherever and whenever you can.
Simple as that
My husband and I have completely different philosophies. I have a spreadsheet with all our expenses mapped out a year in advance so I can see if we've got any huge bills coming up that we need to be prepared for. He just can't wrap his head around that concept and figures if he doesn't wildly overspend everything will somehow work out. Umm, yeah, because I periodically show him my projections and tell him we've got to seriously cut back on nonessentials for a while.
My "budget" is just a total monthly expenditure that I aim to stay below. At 22 years old, I'm single with no kids and living by myself, so it's probably easier for me than others. I earn about $3500 in post-tax and post-401k income every month and usually don't spend more than $1200-1300. Since I pay for everything with my rewards credit card, I'm able to track the sum of my expenses on a regular basis. I'm frugal as it is, so I usually don't need much oversight, but I like that I found an amount that allows for comfortable living and exciting savings.
I don't follow a budget! I just started working a year ago and started out being too thrifty and conservative with money. Now I moved to a cheaper rent place and have been too spendy. A budget (where I budget for fun things and wants, too) might help me balance with less worry.
We just started this month with a written budget and use mint.com to help us track our money. So far so good except I didn't allow enough for transportation and school also started. It's a work in progress, but it keeps us motivated to try better.
We're not great at following our budget to the penny, but having it and keeping track of where, exactly, our money goes is very helpful. Because we plan to spend so much less than our income, we're able to consistently invest and save a good portion of it. But we don't sweat it if, for instance, we make a conscious decision to buy organic milk every week. And while we may not have an earmarked emergency fund or car-replacement budget, we do ok.
I try to budget, but so far it isn't working. I always spend over my budget every month for the past 6-8 months. I'm probably doing something wrong or maybe I don't have the will to keep my budget in tack. Having this eBook would be great. I love to read personal finance blogs and books. Can you send one my way?
One of the first things we did after saying our vows three years ago was draw up a budget, and we've kept one ever since (in varying degrees of strictness). We're in a lean time now, with my husband pursuing his doctorate and us living on my (meager) reporter's salary.
I think the most important thing in budgeting is to be realistic. We tried to budget just $15 a month for "entertainment," - eating out, watching movies, going to coffee shops, etc. And we routinely went over that amount because it's not realistic for two people and because I knew we could get away with it (I think I'm the weak link in this chain!).
Also important is to work together if you're a couple; If one person makes the budget, the other might be less likely to stick with it or more likely to be frustrated. If you work together, it's a lot easier.
And keep an updated record of what you've actually spent each month. Then at the end of the month you can tell if you can splurge (ice cream dates!).
Budgeting has really paid off for us. We bought a (somewhat rundown) house debt free, largely because of careful budgeting even when we didn't need to.
I have a very detailed budget. I enjoy tracking it. Do I follow it? I guess it depends on who you talk to. I believe that I don't follow it as well as I'd like. My husband feels like I am the budget police. We agree at the 50,000 foot level about saving and spending but when it comes to individual things especially for the kids, DH is more apt to say 'spend' when I would say 'we don't have the money for it.' DH counts on his passive income/extra income (he is full commission) to get us through the shortfalls whereas I believe that his passive income should go directly to savings and if we have to use it, we've definitely failed our budget. We haven't fallen yet but I know I need to get a new job in the next 12 months and I am concerned I might have to take a pay cut and have increased commute.