Sun Posted February 3, 2013 Share Posted February 3, 2013 I need a little hive mind wisdom. We have decided we should try to set up and follow a monthly budget. We haven't really done this before in a systematic manner, so I'm looking to all of you for some advice on how to go about it. What have you found hard about it? Do you change your budgeted amounts for different categories from month to month? How does it work for you? Quote Link to comment Share on other sites More sharing options...
---- Posted February 3, 2013 Share Posted February 3, 2013 . Quote Link to comment Share on other sites More sharing options...
Sun Posted February 3, 2013 Author Share Posted February 3, 2013 We're loving EEBA. It's easy to set-up, easy to change around. Bonus points that the app lets my dh know exactly what we have in each category to spend. No more, "oops! I thought we had enough to cover,..." What's EEBA? Quote Link to comment Share on other sites More sharing options...
justamouse Posted February 3, 2013 Share Posted February 3, 2013 We've always had a monthly budget, from before we were married. What's hard about it? Sticking to it. :-) When everyone is spending, and you're saving, it sucks. But it pays off. If delayed gratification were easy, everyone in the country would have a savings account. :D Quote Link to comment Share on other sites More sharing options...
joannqn Posted February 3, 2013 Share Posted February 3, 2013 We started using a cash budget mid-December. I categorized all of our expenses for November the best that I could, and that's where we started. Money for the bills (mortgage, utilities, credit cards) goes into our checking account because I use online bill pay for those. DH is self-employed so our income trickles in throughout the month, and we never know how much he'll get each month. So, we budgeted for the lower end of his income range and fund our envelopes weekly. Each Saturday, DH brings me the cash I need for all of the other categories and distribute it to each category. We have two categories, large household purchases and school expenses, that we can't afford to budget for. We plan on putting money aside for those things the months that he makes more than usual. We've had to tweak a few things. Our bank has no tellers so we had to get the cash from the ATM. We can only get $20s but some of our categories only get $10 or $30 a week. I created a page to keep track of how many fundings each category has gotten each month. Some weeks I'll give one category 2 fundings while another goes unfunded so I don't have to break the $20. As long as each category gets a multiple of $20 for the month, it works out in the end. We found individual envelopes a pain, so I found a couple of envelope-sized accordion files to hold the cash. I keep enough of the gasoline cash in a special pocket in my purse so I don't run into trouble. When we are going somewhere, I grab the cash I need before leaving. We've tweaked the amounts for a couple of categories as well. We started menu planning and shopping at cheaper store and found that we didn't need as much in grocery. That allowed us to up the amount in under-funded categories. It's working very well, though the first month was VERY hard for me. With only a week or two worth of money in each category, it felt like we were dirt poor....go without eating poor. Yes, I cried and got into a fight with DH about money. Seven weeks later, though, we have money building up in each category, and it feels like we'll have money for things when we need it. This is sooooooo much better than having to figure out how to pay for things when they come up. For example, I needed to go to the doctor for a routine appointment (to renew a prescription), and I had the money I needed for the appointment and the rx in cash (no insurance). DD's 13th birthday was funded in cash; we gave her a haircut and styling consultation, makeup consultation, and purchases makeup and clothing....in cash. DS11 came to me because his knee ripped in his jeans, leaving him with only one pair of pants leave. We were able to get him three pairs of jeans, pajamas, underwear, and socks that he needed with cash. We also budgeted for eating out as a separate category. We used the amount we spent in November, $300. We told the kids that anything not spent at the end of the month would be put in savings for a Disney trip. We have $440 saved in just 7 weeks! Quote Link to comment Share on other sites More sharing options...
Shelsi Posted February 3, 2013 Share Posted February 3, 2013 I've always budgeted since I was a little kid so it's not really hard for me. I think the most important thing is making it realistic. Sure I'd love to spend $200/mo on groceries but that's not actually going to happen, kwim? Our budget includes everything, even things we don't pay monthly on. So I have a certain amount I take out every paycheck for homeschool supplies, curriculum, vacation, car maintenance, renter's insurance (paid yearly), life insurance, car registrations, clothing, etc. Dh and I also each get an "allowance" to just do whatever with & we also have a "family entertainment" amount that is set aside. Quote Link to comment Share on other sites More sharing options...
BakersDozen Posted February 3, 2013 Share Posted February 3, 2013 Like Shelsi, our budget is broken down into a lot of line items. I've not found it difficult or hard to keep a budget (or stay on it) as I like the consistency and knowing exactly where every penny is spent. Our budget only changes as our income goes down (wish I could say when it goes up...) and I have to readjust line items to cover the difference. I have kept the same basic budget for 16 years now and have found a lot of freedom in it, especially as our costs have increased (braces, for example). My husband, on the other hand, had a VERY hard time with my budget! He grew up thinking nothing of money or where it came from (Mommy and Daddy paid for everything) and so was very put out when he saw our checking account balance yet was told sorry, we cannot use that money for a trip/eating out/etc. Yet over the years he has seen the wisdom in managing our money and not spending it just because it is there. (Funny story: He pointed out that we had $2500 in vehicle upkeep and complained that we should spend that money on something totally useless...can't remember what. I was tired of this discussion so I said go ahead and spend it. Two months later we had $3000 of vehicle repairs, but the line item was empty. That was the last time dh tried to mess with my budget, lol!) Our major line items are: Tithe Auto/Life Insurance Mortgage Escrow Utilities (broken down to gas/electric/water/phone) Upkeep Home (repairs) Vehicle Payment (we keep paying ourselves even when vehicle is paid off in order to save for the next one) Gas Registration Upkeep Food Non-food (paper towels, etc.) Medical Homeschool Clothing Gifts Miscellaneous Braces Line items I have that do not get funded regularly yet get money with tax refund/extra paychecks are: Trip Savings Sports/Activities Quote Link to comment Share on other sites More sharing options...
Lily_Grace Posted February 3, 2013 Share Posted February 3, 2013 It took us abotu 8 years to learn how to budget realistically. We finally sat down after keeping receipts for a month and looking at what we honestly spent. That was the first budget. Then we slowly started changing numbers to find what w could work with and what was going to be impossible (like we always have individual blow money or else we still use it and ruin it). And we had to learn a few rules: 1. we budget in savings, and we pay ourselves FIRST on payday. 2. We zero it out. Income equals output. Or it should but dh's pay fluctuates so we skim the top of that into savings after living on a bit less. 3. Yearlies need to be budgeted monthly: vacation, Christmas, car repair, clothes, registration... 4. We need to have end of year goals to work toward. We don't use a fancy program (I fail at those) but we do keep a spreadsheet up at all times. The first page has the projected budget for next four pay periods (2 months), the second has our yearly goals marked out into months, third has our current budget with a running countdown tally for each of the categories so we know how much we spent in each (since we don't use envelopes), and the fourth used to have our bill countdown. Quote Link to comment Share on other sites More sharing options...
toawh Posted February 3, 2013 Share Posted February 3, 2013 Dh pays our regular bills at the start of each month when he gets his pay check that includes the allocation he gives me for the month's groceries and households.He gives it to me in cash. I find that having the money in cash helps me prevents me from going over. Everything else goes to savings. If we have an emergency or special occasion, we dip into the savings. But we're pretty good about not spending. I find that I spend more per week the first two weeks of the month. I guess I feel so rich! :) The last week we eat more beans and egg dinners and I pass up on household items that I "need". I usually just make a list of the things I can't afford and wait until the next month. By the time I have the money I don't feel the need for at least half of the items I have on the list. Other months I really measure my output and then reward myself with a shopping trip for extras at the end of the month. With the food I do a big shopping of snack items and breakfast items (except eggs, milk, and bananas which go bad) the first week and I don't replenish until the next month. There's always food to eat. It just means that the boxed cereal might be gone and the kids will have to choose between the other breakfast options. This type of budgeting works well for me since there really is no way to go over because I don't have the cash. Clothes shopping is done twice a year when the sales come in. Any small items that are needed in between are covered with the grocery/household budget. So are transportation costs. Quote Link to comment Share on other sites More sharing options...
Sun Posted February 5, 2013 Author Share Posted February 5, 2013 2. We zero it out. Income equals output. Or it should but dh's pay fluctuates so we skim the top of that into savings after living on a bit less. Everyone's words are helping us so much, and this part was especially helpful. My dh's pay also fluctuates, and we'd been wondering how to handle that. Adjusting the savings part monthly makes a lot of sense. Quote Link to comment Share on other sites More sharing options...
Sun Posted February 5, 2013 Author Share Posted February 5, 2013 I wrote this long reply and it all got eaten when I tried to add a quote. Grr. Thank you all for all your wisdom. Every one of you has given me something new to think about, and it's all helping us figure out how to do this. We're trying to put it all together into a workable budget, but we figure these first couple of months are "learning months." We're trying to stick to what we've set, but we know that lack of experience has us under- or over-funding various categories and leaving others out entirely. Luvnmysvn, your list of categories really helped us! Shelsi, after your advice, we're trying to think of those less-frequent expenses that we still need to plan for. Several of you mentioned cash, and I can see how that would help, but I'm a little reluctant to keep all that cash around. Hmm. We'll have to see how monitoring it daily goes, and see if we need to head to a cash system. Everyone I haven't specifically mentioned, thank you too! Everything has helped us figure this whole thing out a little more. Keep the advice coming! We're learning from all of it! Quote Link to comment Share on other sites More sharing options...
Mergath Posted February 5, 2013 Share Posted February 5, 2013 We have a two week budget. Dh gets paid every two weeks and it varies depending on how much overtime he's put in, so as soon as we know how much he'll get paid we sit down together and figure out our budget. First we figure out which monthly bills are due and allocate that money, then we set aside money for food, gas, and household expenses, and whatever is left (if any) is put toward debt, savings, and a microscopic bit for dh and I to spend on things like clothes and curricula for dd or maybe a latte. I guess it's not so much a budget as it is rolling the cash down the ladder of financial priority and waiting to see if there's any left at the bottom. Quote Link to comment Share on other sites More sharing options...
Halcyon Posted February 5, 2013 Share Posted February 5, 2013 I would love to hear more about the infrequent expenses that you all put money towards (sinking funds). i want to create separate ing orange accts once our emergency fund is fully funded, so i am thinking Christmas, Car Repair, Vet Bills, Taxes (self employed so we need to put money aside), Vacation and Television (we are saving for a new one). How do i Decide how much should go in each one? Obviously, finding Car Repairs is more important than a new tv, but would i fully fund one before moving onto fund another? I feel like nothing would ever be fully funded that way, kwim? Our income fluctuates also, so we also have set (low) spending amounts and any extra goes towards savings. I hope this isnt a hijack! Quote Link to comment Share on other sites More sharing options...
Miss Peregrine Posted February 5, 2013 Share Posted February 5, 2013 I've been using budgetsimple.com to keep track of things. it's free. :hurray: Quote Link to comment Share on other sites More sharing options...
Miss Peregrine Posted February 5, 2013 Share Posted February 5, 2013 I've been using budgetsimple.com to keep track of things. It's free. :hurray: Quote Link to comment Share on other sites More sharing options...
wendy not in HI Posted February 5, 2013 Share Posted February 5, 2013 I have always been able to keep a basic budget in my head and I have managed to save money each month even when our income was extremely tiny. But then we bought a house with some major fixing up needed and I just can't keep on top of things... I spent all of last year trying to cut out things to make my usual plan work, but we were still just spending too much. So, thanks to a thread here, I decided to try You Need a Budget. I started at the beginning of January, so really just a few of weeks ago, but I am learning a lot and doing my best to keep my spending reined in. I really liked setting up all of the categories and I enjoy typing in the amounts spent, but we haven't quite got it all set up perfectly. I'm working on it. The budget has been extremely helpful for me to see where I am wasting money - on groceries and on fast food. I can really spend a lot on the "I just need a couple of things" grocery runs, and I have a terrible habit of getting $20 cash back... I'm trying really hard to cut those out, and I'm also carefully planning meals down to counting how many apples we eat in a week.... I know it's good for me, and I mostly like this new budget, but it also makes me feel a little claustrophobic. I am enjoying all the tips! Thanks for the great thread! Quote Link to comment Share on other sites More sharing options...
rgrin Posted February 5, 2013 Share Posted February 5, 2013 We did Dave Ramsey a few years ago and it was truly eye-opening. I just did a quick search and found a site that discusses what really helped us for that first step: how much per category. There are also links to some of Dave Ramsey's planning sheets. I won't tell you my amounts, but I find it helps to see some category ideas. Here are mine: Monthly Allocated Savings SAVINGS - Pay off Debt or Emergency Fund or Long-term Savings (whichever step you're on) HOME - Rent/Mortgage - Utilities (water, electricity, trash, internet) - Home maintenance (air filters, cleaning supplies, etc) - Home Repair (sinking fund in savings) - Identity Theft Protection (problem at DH's work :glare: ) FOOD - Groceries & Toiletries (grew tedious to keep these separate) - Restaurants AUTOMOTIVE - Car Insurance - Gasoline - Vehicle Maintenance (category in savings) EDUCATION - Homeschooling (co-op fees, materials, computer programs, etc) - Activities (gymnastics, T-ball, lessons, etc.) CLOTHING - Individual (category in savings) GIFTS - Charity/Church - "Commission" Money/Allowance - DH's spending money - My spending money - Gifts (category in savings) ENTERTAINMENT - Date Night - Netflix - Satellite TV Breakdown of Savings GENERAL SAVINGS - 7yo's Long-Term Savings - 5yo's Long-Term Savings - 6-month Emergency Fund - Family Vacation HOUSE SAVINGS - Gardening (haven't done this before, but we're tracking our expenses this year to see if it would be helpful) - Home Repair - Furniture Replacement VEHICLE SAVINGS - Oil Changes - Car License/Tag/Tax - Tire Changes/Rotation - New Tires - Car Repair - Car Replacement CLOTHING - My Clothes - DH's Clothes - 7yo's Clothes - 5yo's Clothes GIFTS - My b-day & Mother's day (same week, same gift) - DH's b-day & Father's day (same week, same gift) - Our anniversary - 7yo's Birthday - 5yo's Birthday - Christmas - Others (other family members, friends, etc.) Finally, EEBA is an app that you can use on your iPhone or Android that uses virtual envelopes. SOOOOO much easier and less stressful than keeping all of that cash around. Quote Link to comment Share on other sites More sharing options...
Annie G Posted February 5, 2013 Share Posted February 5, 2013 I would love to hear more about the infrequent expenses that you all put money towards (sinking funds). i want to create separate ing orange accts once our emergency fund is fully funded, so i am thinking Christmas, Car Repair, Vet Bills, Taxes (self employed so we need to put money aside), Vacation and Television (we are saving for a new one). How do i Decide how much should go in each one? Obviously, finding Car Repairs is more important than a new tv, but would i fully fund one before moving onto fund another? I feel like nothing would ever be fully funded that way, kwim? Our income fluctuates also, so we also have set (low) spending amounts and any extra goes towards savings. I hope this isnt a hijack! I know nothing about ING accounts, but my sinking funds accumulate in a savings account (not the same one as our emergency fund) and it's linked to my checking account. I use a credit union for this because they ignore the rules about how many transfers you can make per quarter. I make frequent deposits- if I'm under budget $20 on gas for my car, I drop it in a sinking fund in my savings account. Then as needed, I move it to checking when it's time to pay a bill. I maintain a Planned Spending document where I list upcoming expenses and how much I expect to need, along with tracking how much is already saved/needs to be saved. Some are short term- tuition for a class ds takes three times a year- and some are long term- Christmas or travel fund. I gauge upcoming expenses and see which needs to be focused on this month, and try to make sure to spread the joy by adding to the pure fun accounts as often as I can. Dh is paid every two weeks so that's how we budget- and that means we add to the savings account twice a month from his check, twice from mine, and weekly from my tutoring pay. I need a local account to make it easy on me. To me, it's a game to see how far ahead of schedule I can fund a line item. Like, it made me SO happy to end January with February sinking fund goals already met- that kind of thing keeps me motivated and engaged. But it would drive other people nuts. Some folks love having 20 sinking funds- I try to focus on the few that are coming up in the next few months, then branch out as we have the funds. Adding to 15 funds every month would irritate me and also make me feel we're not making progress. But others love that method...different strokes for different folks. Quote Link to comment Share on other sites More sharing options...
Lily_Grace Posted February 5, 2013 Share Posted February 5, 2013 I would love to hear more about the infrequent expenses that you all put money towards (sinking funds). i want to create separate ing orange accts once our emergency fund is fully funded, so i am thinking Christmas, Car Repair, Vet Bills, Taxes (self employed so we need to put money aside), Vacation and Television (we are saving for a new one). How do i Decide how much should go in each one? Obviously, finding Car Repairs is more important than a new tv, but would i fully fund one before moving onto fund another? I feel like nothing would ever be fully funded that way, kwim? Our income fluctuates also, so we also have set (low) spending amounts and any extra goes towards savings. I hope this isnt a hijack! We've done it a few different ways. We set a goal date to have the fund done by and then divide the dollars needed by the months we have, so we know how much of our slush funds each month are going toward the most immediate goals. Others, like 'vacation' and 'car repair', are set as monthly bills, so the money is available when we need it. Dh laughed at this method until he sweated over the $300 repair our car was going to need to pass inspection. He didn't realized the $25/mo we threw into that fund actually added up to more than what we needed. The way our budget is set up is like this: 80% for living expenses 10% for slush funds 10% for an emergency fund skim the top off for savings so that we're only touching the budgeted amount. Last year it was nearly the same but we skimmed off the top and the 10% that would have gone to the emergency fund all went to paying off bills. Back to the slush funds. Every month we reevaluate. Around August, we'll look at the car repair fund and see if it is sufficient and then funnel more toward Christmas and gifts. We'll decide around the end of the year if we have the optimal amount we want for a new table fund and can start waiting for deals/shopping around, or if we should add to it still. This month, vacation fund is getting slightly more. Dh and I are backpacking to Paris for V-day (about the distance and cost from SC to VA for us), but we want to make sure we have enough for a few places we really want to visit there. And I keep it all in our regular savings account. I use to use an old checkbook ledger and every fund was given two pages to fill up. Now I just use my spreadsheet to keep track of the different funds. ETA: one bonus of keeping the funds together but separate - 2 years ago dh needed to make an emergency trip home. We immediately killed a few slush funds and our emergency savings to get him his ticket, rental car, and everything else. One lump sum transferred altogether. If we had a problem with the car and needed money from the table fund to help fix it, darn right I'd be striking through those numbers. Quote Link to comment Share on other sites More sharing options...
Annie G Posted February 5, 2013 Share Posted February 5, 2013 Lily Grace, do you have goal amounts for your long term slush funds? We're struggling with that- knowing how much we really need in a fund. Things like Christmas we're ok with because we list who we need to buy for and set a budget. Easy. But car repairs...how to decide how much? We haven't had any in 6 months- just routine oil changes. And that account is really starting to build. Medical expenses are the same way- it seems they fluctuate so much! For 5 years we hit the max out of pocket due to dh's heart condition but last year was a light year. So how do you decide how much to put in a fund, and do you ever call it full and halt it? Quote Link to comment Share on other sites More sharing options...
WishboneDawn Posted February 5, 2013 Share Posted February 5, 2013 One thing that made it easier for us was getting rid of all the fixed expenses. We added up what our fixed expenses were over the course of a year, divided by 24 and have that amount automatically deposited in a separate savings account the day after each pay day. All money for bills, taxes, insurance, firewood, etc. come out of that account. From there it's just a matter of budgeting things like groceries and gifts and such. It's a really good way of seeing exactly what you have left after everything that needs to be paid is and there's no scrambling for the bigger bills like property taxes when it's time to pay them. We also have another account we put a bit of money in for short-term savings goals and unexpected costs. Quote Link to comment Share on other sites More sharing options...
Lily_Grace Posted February 5, 2013 Share Posted February 5, 2013 We max out car repair at $1000. Over the years we've hit on that being a good amount to keep set aside. Our insurance has a rather large deductible and if we hit over $1000 in repairs at once, it's time to reevaluate keeping the car. After the first $1K we do a 'new car fund'. Our slush fund categories look like this on a month by month spreadsheet: Emergency fund (3 months)..J F M A M J J A S O N D.year end goal/total goal Vacation................................J F M A M J J A S O N D.year end goal/total goal New furniture.........................J F M A M J J A S O N D.year end goal/total goal Car Repair.............................J F M A M J J A S O N D.year end goal/total goal New car fund..........................J F M A M J J A S O N D.year end goal/total goal House fund.............................J F M A M J J A S O N D.year end goal/total goal College fund............................J F M A M J J A S O N D.year end goal/total goal WDW.......................................J F M A M J J A S O N D.year end goal/total goal There are a lot of blanks and it will eventually fill up unevenly. Car repair will sit at its total while new car will go up. Vacation will fluctuate (mini trips around the area) while the emergency fund grows the most rapidly and then stalls. College fund will probably sit empty for another year or so. Oh well. Quote Link to comment Share on other sites More sharing options...
Halcyon Posted February 5, 2013 Share Posted February 5, 2013 This is helpful. I think I need to sit down this afternoon and just figure out what sinking funds I want to create, and then their order of importance so I know how I want to allot money to them. Quote Link to comment Share on other sites More sharing options...
QueenCat Posted February 5, 2013 Share Posted February 5, 2013 We use an excel spreadsheet to keep track of the budget. We itemize in two main categories: fixed and flexible. Fixed includes anything that has the same amount due every month ((mortgage, car payment, utilities (cell phone, land line, water, gas, electric, cable/internet, trash collection), savings, etc)). Flexible are budgeted items such as groceries, home maintenance, dining out, pet care, clothing, hair cuts and gas, which vary, but have a "max" allocated. Rarely hit the max as I over-budget, preferring to be under and having extra money. If there is extra in a category, I usually carry it over to the next month. This typically happens in the pet care, home maintenance and hair line items. Bigger issues are easily met since the money has been carried over. Retirement and long term savings are payroll deducted so they aren't on my line item "working budget" but I do have a spreadsheet within the spreadsheet to remind me of what is taken out and why. I take care of all of the money/budgeting, except retirement. Dh makes changes to that as necessary. We discuss any major expenses (over $400-500) and permanent budget changes as it becomes necessary. Works well for us doing it this way. Quote Link to comment Share on other sites More sharing options...
Mnemosyne Posted February 5, 2013 Share Posted February 5, 2013 I use YNAB, which is set up pretty similarly to how a spreadsheet could be set up. We divide all expenses up between different master categories. Some, we keep adding in more money every month (such as $60 towards car insurance every month). Others, we put money in until we reach a certain amount (say, $500 for the Gifts category). Yet others we zero out at the end of the month (utilities, for example). Each month, we budget the last month's income to pay for expenses in the upcoming month (called a "buffer"). This ensures that we don't live paycheck to paycheck - we have at least one month's buffer (more when the Emergency Fund is funded, of course). We have all credit cards and checking/savings accounts on budget, and track each expense as we go. If we need to, we "Whack a Mole", meaning we take some extra money out of one category in order to pay overspending in a different category. We try to avoid doing this, though. Our goal is to keep everything in the black for the month, so we allocate and move funds around as we need to. This keeps a good picture in both our minds as to how much money we have available and where it needs to go. What I really love about YNAB, is that it also has an iPhone app, so we can both access our budget on the go and record expenses. I attached a picture of most of our budget categories, for a bit of a visual (missing are DH's and my discretionary categories, and expenses related to the kids). The notepad icon next to some of the titles show that there is a note associated with that category. I can simply click on that and see the note (I'll often have links to things that need to be purchased, a shopping list, our calculations for how much needs to be put into that category). Quote Link to comment Share on other sites More sharing options...
Mommy2BeautifulGirls Posted February 23, 2013 Share Posted February 23, 2013 Finally, EEBA is an app that you can use on your iPhone or Android that uses virtual envelopes. SOOOOO much easier and less stressful than keeping all of that cash around. I like the look of that app. However, I've become quite fond of having all the extra change to put into savings. It really adds up quick if you use cash for all of your shopping. If the money gets to be too much, I'm totally going to get that app! Quote Link to comment Share on other sites More sharing options...
melmichigan Posted February 23, 2013 Share Posted February 23, 2013 This year is our first with a formal budget. A few years ago I divided all the bills to be paid online twice a month, half each paycheck, they come out of my DH's paycheck as soon as it's direct deposited. I am using EEBA to handle all the "cash" that is left. The most helpful thing for me in keeping to my budget is to 'shop at home' using apps so I know exactly how much I will spend before I walk into Sam's Club. ;) DH is not amused, he wants to know why we need to change after 20 years. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.