Do you follow a budget?

[Dawn in Ohio]

Do you follow a household budget? Do you do it because money is tight and you have to? Or do you think everyone should follow a budget? Do you feel it is irresponsible to just spend and not keep track of where the money is going? Dh and I do not follow any preplanned budget. I have no idea what we spend on food or clothes or entertainment. We are both fairly conservative with our spending and there is always money left in the bank at the end of the month. Occasionally I feel guilty that there isn't more structure and planning to our spending... (but then other times I think we are doing fine and I don't need another thing to obsess over).

 

What do you think? (We are in the middle of a Sunday school class based on a Larry Burkett book. That is what has spurred this question. And then I keep seeing questions here asking how much people spend on various things.)

[elegantlion]

We don't have a monthly budget, but we budget. My dh is self-employed and our income can vary dramatically from month to month.

 

We did a Crown financial class at church several years ago and kept track of every expense. We're pretty frugral, but that was eye opening.

 

We pay cash for everything except house and car. The car will be paid off in a few months. We save, pay the bills first. Then we budget in the extras from there. If there is no cash, we don't buy.

[Jennifer in MI]

I go back and forth. For years, we were just careful with what we spent and we never had issues. Then, after reading here about all the budgeting posts, I started tracking my spending. I was amazed at how much I spent in certain areas!

 

Then, we decided we wanted to take a nice vacation. We had a reason to budget and set money aside for something specific. It was nice to see that money grow and stick to a budget, but then I start to feel confined by it, so then I get lax again.

 

I should say that the only debt we have is our house, so we're not working at getting out from under any debt and I do think that allows us a bit more freedom.

[abbeyej]

Instead of creating a budget out of thin air, why don't you just *track* your spending for a few months, to see where your money is going?

 

And yes, I think it's important to have a *plan* no matter where you fall income-wise. And one of the first things to budget for (once you've seen what your patterns are in spending, and can make some decisions about which of those things are "needs" and which are "need/wants" and which are, perhaps frivolous or unnecessary) is savings. Instead of savings being whatever is left over at the end of the month, let it be one of the set things, just like the mortgage or rent. *If* there's any left at the end of the month, sure, that gets saved too, but start with the savings. (And I believe the general recommendation is that that should be at least 5% of your income -- though obviously there are circumstances where that is difficult or impossible -- but in an ideal world, that would be the minimum.)

 

But yes, I think a plan is vital, no matter how much money you make (or don't). It doesn't have to be iron-clad, but knowing where your money is going and how you want to prioritize will serve you well.

 

And, lol, I say all this is the one who *isn't* in charge of the finances in our home (thank goodness). ;) Dh is better at budgeting than I am, and a good thing too!

[Night Elf]

We are trying to be more conscientious of our spending because with all the rising prices everywhere, we actually run out of money before my DH's next paycheck. That is very unusual for us as my DH makes a really great salary and our basic living expenses such as mortgage and utilities are really not that high. The budget helps us see where our money is going and where we can make better choices so we have plenty of money in the bank for when we really need it.

 

I see nothing wrong with having spending money as long as all needs and savings are being met. It's just my spending got out of control for a while. :)

[LauraGB]

We have been using a budget based on Dave Ramsey's advise for about 5 years. We did it because we were coming up short every month. Dh and I both are self employed and recieve payment once a month, so its a long time between checks. Dave Ramsey's system has worked very well for us and we have eliminated debt (even when we didn't seem to make enough money to get from check to check). Now, we can get through, know where our money goes, and when the budgeted amt for each expense is gone, its gone until the next month rolls around. Practice has made the budgeted amount last (usually). Basically, w/his system, we spend on paper every cent of our income (savings is also budgeted in - although, sometimes, in our case, there is no room for that). Just these last few months, I've foregone the individual envelopes, because the amt is so fixed and embedded in my head that I really don't need them at this point, lol. I can honestly say, having a budget a nice way to run things, and a real eye opener to where our money actually goes.

[Amy loves Bud]

No, we don't budget. But we aren't big spenders except when it comes to food - eating out and groceries are our big splurge.

 

The funny thing is, when we go back and look at it, our monthly outgo is surprisingly consistent. So we don't really see the need for a budget.

[*anj*]

Do you follow a household budget? Do you do it because money is tight and you have to?

Yes, we follow a budget. No, it is not because money is tight, but because we are planning for our future. We choose to live on about 65% of dh's salary. The rest is either put into savings or given away.

 

 

Or do you think everyone should follow a budget? Do you feel it is irresponsible to just spend and not keep track of where the money is going?

Yes, I really do think that everyone should have a budget. Even people who think that they're comfortable enough to not need a budget could be even more comfortable if they had one. It is important to think about your future and to prepare for emergency situations. If someone gets sick or loses a job or if your roof suddenly needs to be replaced, what will you do? What are your plans? A credit card is not a savings account.

Forgive me for the use of a cliche but failing to plan is planning to fail.

 

Before we started living on a close budget, I never thought we had enough money. Now I realize that we have plenty of money. We are in control of it now. We know where every single penny goes. I used to wish that I could afford to donate money or help out with people who are having a hard time. Now I know that we can do that because we have earmarked funds for that very purpose. It just feels good, and we really know that we are being good stewards of our gifts.

I was jokingly going on and on about this coffee maker that I am lusting after. I cannot buy it right now though because I need to save specifically for something that is really a "want" more than a "need." We have the money for it. I could walk into a store and buy that thing whenever I want, but I won't. If, however, we had to replace our transmission we could do it in a heartbeat and pay cash. That's because of budgeting.

 

Dh and I do not follow any preplanned budget. I have no idea what we spend on food or clothes or entertainment. We are both fairly conservative with our spending and there is always money left in the bank at the end of the month. Occasionally I feel guilty that there isn't more structure and planning to our spending... (but then other times I think we are doing fine and I don't need another thing to obsess over).

 

Because you're a Christian, I'm going to challenge you on this. Do you believe that everything you have really belongs to God? Is it His money? If so, do you think you need to be accountable for how you use it? Are you (at a minimum) tithing? Are you saving for a rainy day? Is there someone in your church or neighborhood who you could help?

 

Many people who diet start off by keeping a food journal. Think of a budget as a food journal. I'd be willing to bet that you'd be surprised at how much you're actually spending. I used to think that we were conservative in our spending too, but when we started living according to a budget I really came to understand how much I had wasted.

[Sue G in PA]

We used to budget. We used to have a strict monthly budget b/c we were reforming our spending habits. Now, we just sort of have a loose idea of what we spend and how much we have. It's not working but I'm terrified to actually put it down on paper b/c I KNOW we are falling behind every paycheck. I just don't have the strength to actually see it written down, KWIM? It would put me over the edge, I fear. So, we just go paycheck to paycheck. We don't eat out often. We just had pizza out and that was our "splurge" for the month. I bought Drive Through History last month and that about did us in. I have so much more curriculum to buy but I must sell what I have and use that money. Then there are school supplies and organizational supplies. I don't even know where that money will come from. So, no, we don't budget.

[WTMindy]

Our budget consists of "Don't spend any money you don't have to!!" ;)

When we were first married and had no money we kept a very strict budget and now we are still in the habit of spending money very thriftily. We have enough money now that we wouldn't really have to live the way we do, but we save for things like travel that are important to us. Dh is very thrifty with money and thinks a lot about the cheapest way to do something, and I'm just not a huge spender, so it works pretty well. But, we don't keep any written records of all our purchases or anything like that.

[Kelli in TN]

I do have one for my "share" of the money. I have my budget written out until the end of 2008. Then I will write out a new one. I know exactly which piece of curriculum I will purchase from which payday, I know exactly when I will pay this or that and which weeks will be beans and rice weeks. I am trying to put $20 per payday into long term savings.

 

Sometimes I get thrown for a loop and it all goes out the window though. I am having one of those weeks now as my daughter's tuition for her college classes is due and the money that would have paid for that expense went to pump out the septic tank.

 

Guess you could say her tuition money went down the drain!!!:lol:

[Sue G in PA]

Yes, we follow a budget. No, it is not because money is tight, but because we are planning for our future. We choose to live on about 65% of dh's salary. The rest is either put into savings or given away.

 

 

 

Yes, I really do think that everyone should have a budget. Even people who think that they're comfortable enough to not need a budget could be even more comfortable if they had one. It is important to think about your future and to prepare for emergency situations. If someone gets sick or loses a job or if your roof suddenly needs to be replaced, what will you do? What are your plans? A credit card is not a savings account.

Forgive me for the use of a cliche but failing to plan is planning to fail.

 

Before we started living on a close budget, I never thought we had enough money. Now I realize that we have plenty of money. We are in control of it now. We know where every single penny goes. I used to wish that I could afford to donate money or help out with people who are having a hard time. Now I know that we can do that because we have earmarked funds for that very purpose. It just feels good, and we really know that we are being good stewards of our gifts.

I was jokingly going on and on about this coffee maker that I am lusting after. I cannot buy it right now though because I need to save specifically for something that is really a "want" more than a "need." We have the money for it. I could walk into a store and buy that thing whenever I want, but I won't. If, however, we had to replace our transmission we could do it in a heartbeat and pay cash. That's because of budgeting.

 

 

 

Because you're a Christian, I'm going to challenge you on this. Do you believe that everything you have really belongs to God? Is it His money? If so, do you think you need to be accountable for how you use it? Are you (at a minimum) tithing? Are you saving for a rainy day? Is there someone in your church or neighborhood who you could help?

 

Many people who diet start off by keeping a food journal. Think of a budget as a food journal. I'd be willing to bet that you'd be surprised at how much you're actually spending. I used to think that we were conservative in our spending too, but when we started living according to a budget I really came to understand how much I had wasted.

 

Anj, I am a Christian and so I 100% agree w/ your post. Really. But, we can't even live on 100% of dh's salary much less 65%. Dh stopped tithing long ago (much to my dismay, but he's in charge of the money so...). We can barely afford food much less curriculum. The curriculum that I have purchased was with money from selling curriculum, w/ the exception of one "splurge" (Drive Through History). I hear you, though, and am feeling convicted to start a budget (gulp!) b/c I think we do waste money. Well, I know we do. Where does one start? I've heard of this Pear budget. Is it Christian? Any suggestions on where to start? Anyone? I can't believe I'm even asking this...

[ClassicMom]

We have huge medical debts and need to pay as much on them as possible. We pay cash for everything else.

 

I agree with what's been said as well. If you don't budget, it's amazing to see how much you can just spend on "stuff". A budget doesn't have to be a noose around your neck. In fact, it can be enlightening because you know where your money is going and you can make informed decisions. If you want to spend money on "xyz" then you can do it, you just have to think about it first and make sure that it's something you really want.

(If you aren't on a fixed budget; otherwise it's coming out somewhere else).

[Tracey in TX]

Do you follow a household budget? Do you do it because money is tight and you have to? Or do you think everyone should follow a budget? Do you feel it is irresponsible to just spend and not keep track of where the money is going? Dh and I do not follow any preplanned budget. I have no idea what we spend on food or clothes or entertainment. We are both fairly conservative with our spending and there is always money left in the bank at the end of the month. Occasionally I feel guilty that there isn't more structure and planning to our spending... (but then other times I think we are doing fine and I don't need another thing to obsess over).

 

What do you think? (We are in the middle of a Sunday school class based on a Larry Burkett book. That is what has spurred this question. And then I keep seeing questions here asking how much people spend on various things.)

We have a budget, but don't really follow it, per se. It's more of a guideline. It's used specifically to know what our spending habits are when we opt for a major purchase. We'll follow it closely if it looks like our spending is out of control. It's cyclical; I might not spend much in months and it all comes out 2-3 times annually. We pay ourselves first (savings) and plan around this. Our future is more important than the present.

[Paula in MS]

I just looked at Pear Budget yesterday and I really love it. I have always been conservative with my spending, but things are getting tighter and I needed to track my spending. (Our only debt is our house and dh wants to pay it off quickly.)

 

Pear Budget tracks your spending just like an envelope system. It does not track your checks or reconcile your bank account. It is very simple to use. Put in your budget amounts and enter your receipts. I have looked at everything out there and this is very simple and flexible. After you enter receipts, it will show you how much money is remaining in each category. I really hope this works for me. I am a great financial planner (MBA in finance) but I have no follow through.

 

There is also a 30 day free trial. :001_smile:

 

Paula

[*anj*]

Anj, I am a Christian and so I 100% agree w/ your post. Really. But, we can't even live on 100% of dh's salary much less 65%. Dh stopped tithing long ago (much to my dismay, but he's in charge of the money so...). We can barely afford food much less curriculum. The curriculum that I have purchased was with money from selling curriculum, w/ the exception of one "splurge" (Drive Through History). I hear you, though, and am feeling convicted to start a budget (gulp!) b/c I think we do waste money. Well, I know we do. Where does one start? I've heard of this Pear budget. Is it Christian? Any suggestions on where to start? Anyone? I can't believe I'm even asking this...

 

I understand. I've been there.

But I will tell you that you can do this. It can be done.

We started off by reading Dave Ramsey's Total Money Makeover. Prior to that we never even thought we could afford to have a budget. It has made a huge difference for us. I know that there are many other plans and financial experts out there, so you could choose whichever you prefer. I don't know anything about the Pear budget.

 

I can almost guarantee that if you don't have a written budget, you are wasting money.

Where to start? First, gather $1,000 for an emergency fund. Do whatever it takes to save up that money. Look around your house. What could you sell? Can you provide a service in exchange for cash? Look at your monthly expenses and figure out which ones you can do without.

 

Next you'll need to figure out where your money is going every month, and where it needs to go. How much do you have to spend for the fixed monthly things? How much is left? Do you have any consumer debt? After you gather your emergency fund you need to make a plan for paying that off.

 

I'll stop here, but believe me, I understand your frustration. I've been there. There is hope.

[Amy loves Bud]

This sounds a lot like us. We could afford to live very differently than we do. But we just don't really get a big thrill out of a lot of spending. We like good food, we like a good vacation. But we like to save even more than we like good food and vacations ;) . So we don't spend a lot in other areas. Nor do we have any debt - no cc, no car payments, no mortgage.

 

So we don't budget, but we're also naturally not big spenders, and the couple of areas we do spend big in are areas that we have made a very conscious decision to do so.

[Suzanne in ABQ]

I don't have a budget, and I don't keep track of prices. I don't know how much we spend on groceries, but I could go look it up if I had a need.

 

I used to use Quicken, and I itemized every single item on every receipt. I printed out pie charts, and reports, and presented them to my dh. It took hours and hours, and we never used the information for anything! I finally got fed up and chucked the whole thing. Instead, I buy everything on a credit card, and I pay off the credit card every month so I have no extra charges. This gives me an itemized list of everything we've bought. One of my cards even separates the purchases into categories. The bonus of using the credit cards is that we get hundreds of dollars back every year from the credit card companies.

 

I realize that many people have problems with credit card debt. This hasn't ever been an issue for us because we don't buy anything unless we have the money sitting in the bank, not even our car! We could have paid cash for it, but they were offering financing at 0.9% interest. Sitting in the bank, it's earning over 3%. So, we're even earning money by buying our car! :o)

 

Anyway, I'm off track. I suppose that if I needed to, I could go back to budgeting, but right now, my time is more precious to me than the benefits of making and maintaining a budget would be.

[nutmeg]

we just sort of have a loose idea of what we spend and how much we have.

That was our method for the first five years of our marriage, and it seemed to be working. We could afford our Visa payment, two car payments, student loan payments, and had a little leftover each month.

 

Then we had baby #1, read The Tightwad Gazette, and caught the frugal bug.

Then came baby #2, homeschooling, and dh's job shuffle.

 

We could still afford our payments and were inching along when we discovered Dave Ramsey. We started budgeting, paid down our debt, and put away the credit card. Our mortgage is paid off due to an inheritance, but we did the rest of the steps ourselves.

 

I do NOT do a Zero Based Budget, telling every penny where to go. But I have worked up a standard 4-week budget that has us paying ourselves first (retirement, college savings), housing expenses, groceries, gas, and sinking funds. These are set expenses that will not changes. Any money leftover is available for clothes, Target trips, Starbucks, etc. :) This is enough of a 'budget' for us.

[Dawn in Ohio]

Wow. Thanks for all the feedback. While I'm mulling it over, let me add some quick details.

 

We do tithe. We are putting money toward retirement. Plus we have other savings. Our only debt is our mortgage. We aren't specifically saving for our kids education, but because my husband is a college professor there is one university they can attend for free. :) So I think we are doing OK. No doubt there is room for improvement, I'm just wondering if I am motivated to tackle it?? Keeping track of spending seems so burdensome. And because I tend to obsess about things, I'm afraid I would end up nagging dh constantly.

[Dawn in Ohio]

 

I do NOT do a Zero Based Budget, telling every penny where to go. But I have worked up a standard 4-week budget that has us paying ourselves first (retirement, college savings), housing expenses, groceries, gas, and sinking funds. These are set expenses that will not changes. Any money leftover is available for clothes, Target trips, Starbucks, etc. :) This is enough of a 'budget' for us.

 

Maybe a Zero Based Budget is the only thing I can imagine. Maybe I am too strict when I try to budget and that is why it seems so restrictive. Your approach seems more reasonable.

[Joanne]

Yes, absolutely. Budgeting is one of those things that brings freedom rather than restriction.

 

For a long time, I always thought that more money would solve money problems. It's not exactly accurate.

 

It's been "the plan" that has saved us. In spite of the severely reduced child support and the increased cost of health insurance, I have made strides to getting current because of "the plan".

 

I got a bill in the mail yesterday; I can play it. Now. That might seem trivial to some readers here but it's HUGE to me. It's been years since I've been able to pay something when it's presented.

[Dawn in Ohio]

 

Because you're a Christian, I'm going to challenge you on this. Do you believe that everything you have really belongs to God? Is it His money? If so, do you think you need to be accountable for how you use it? Are you (at a minimum) tithing? Are you saving for a rainy day? Is there someone in your church or neighborhood who you could help?

 

 

 

Thanks, Anj, for your reply. I do believe that everything belongs to God and that we are accountable to Him for how we use our time, money, talents, etc. I am just not convinced that a budget is necessary to establish that accountability.

 

We do try to plan for the future and save. It is just that for the smaller things, like clothes for example, I don't take any allocated amount out of an envelope when we go clothes shopping. Instead I check through the kids clothes, make a list of what they have and what they need, and shop accordingly. I look for sales and try to make wise decisions, but at the end of the day does God care whether I spent $200 instead of just $150? I don't know.

[Dawn in Ohio]

Our budget consists of "Don't spend any money you don't have to!!" ;)

When we were first married and had no money we kept a very strict budget and now we are still in the habit of spending money very thriftily. We have enough money now that we wouldn't really have to live the way we do, but we save for things like travel that are important to us. Dh is very thrifty with money and thinks a lot about the cheapest way to do something, and I'm just not a huge spender, so it works pretty well. But, we don't keep any written records of all our purchases or anything like that.

 

This sounds very similar to dh and I. :)

[Dawn in Ohio]

Guess you could say her tuition money went down the drain!!!:lol:

 

:lol::lol::lol:

[gardenschooler]

We have a budget (a plan) for paying bills, because our income fluctuates and we have to think ahead because of that. I don't budget out every last penny of our disposable income, but I am very frugal. I just don't like to spend any money, period. We have zero debt (but not much in the way of assets, either). We don't use credit cards anymore.

 

I think I read that Tightwad Gazette a little too much, because I always see something we're spending money on and think to myself, "Why are we buying these kids new clothes? We should be going to the thrift store!" or "Why are we eating out? Be happy with a pb & j!"

 

I keep super-tight reins on all spending going on here, and I'm about to crack down even more. I live among wastrels. The only thing I splurge on is air conditioning, and I'm about ready to give up some of that, too. My entire house is furnished from yard sales (except sheets and towels - I'm not that frugal!)

 

I will spend money on things that are important, but what I think is important and what others do are probably not the same things. It kills me to spend money on non-tangible items, like eating out. Dh loves to eat out, wastrel that he is, so we compromise by doing it infrequently. To him, it's about the memories, the atmosphere.

 

I finally spent some money and got my hair done today, and it almost killed me to do it. But it's worth it, I guess. I used to cut everyone's hair, until they got wise. :D Dh still lets me cut his.

[Peela]

No, we don't follow any particular budget but we also don't have any credit card debt other than a small one on our everyday cc which we use online and for paying bills. We don't own money on anything else other than two investment properties, we pay cash for most things, so we naturally tend to live within our means.

Sometimes when money seems tight and I cant work out why, I write down all our expenses and it usually becomes clear.

We both know approximately what our disposable income is. The consequences of overspending are not having enough money to pay the mortgages- so, we just naturally dont do it.

I think credit cards and borrowing money to pay for things like cars, are what gets a lot of people in trouble.

[*anj*]

I am just not convinced that a budget is necessary to establish that accountability.

 

I look for sales and try to make wise decisions, but at the end of the day does God care whether I spent $200 instead of just $150? I don't know.

 

Oh no, that's not what I meant. No, I don't think He does care about the exact dollar amount that you spend. When I mentioned our money as a gift from God that we're responsible for I was just talking about wise stewardship as opposed to unnecessary spending or waste. And those things will look different for different families. I think it's easiest to do this when I know where all of my money is going.

 

I don't want to make this into some big moral imperative, binding people in areas that Scripture does not. I see the budget simply as a tool. In your original post you said

Dh and I do not follow any preplanned budget. I have no idea what we spend on food or clothes or entertainment. We are both fairly conservative with our spending and there is always money left in the bank at the end of the month.

 

When I read that I thought you were asking for advice about being more careful with money.

I had another thought a few minutes ago, but I am intensely tired right now and I am having a hard time making sense.

 

Basically, what another family chooses to do doesn't matter to me. I'm just telling you what works for us. We are in a better position now than we've ever been, and it is due partly to budgeting.

 

I hope that I'm making sense. I have written and rewritten this post about 6 times, but the sleepiness is dragging me down. :)