Money management and budgeting- How do you?

[Soror]

I'm wanting to hear different ways that people manage their household budgets (not retirement) but monthly spending. Maybe I'll hear a new idea. Dh works FT and goes to college FT for engineering (including a 3 hr commute 2 days a week). He is very pressed on time. I am the primary money manager due to how little time he has but I need him to be involved in some way so it doesn't feel like I'm just running the show on my own. Simple ideas are good. We have no allegiance to any money guru (we've used some of Dave Ramsey's ideas before but don't always agree with him).

Edited September 27, 2020 by soror

[Hunter]

One of the things that I have learned is that every month is not the same. Before making a long-term budget, I need to keep track of birthdays and fees that need to be paid twice a year, and anything that is not the same, month to month.

If I have not done this in awhile and do not have the old budget to use as a reference, this feels overwhelming and therefore useless. Just write what is super obvious and add to it over the year, and know you will have to be flexible enough to adapt to what you are not writing down. Next year budgeting will be more exact.

I have had a major life change, and I have also been winging it for awhile.  I need to make a budget, too. I used to make a combined budget and education plan using this method. 

I need to get a big piece of paper.

[Jentrovert]

I use YNAB. I used it years ago, got frustrated, and quit. Then some time ago it was mentioned in a thread here, and I decided to try again. For whatever reason, this time it clicked.

[Bootsie]

I think budgeting needs really depend upon your own situation and personality.  Some people naturally eat a well-balanced diet without thinking too much about it.  Other people, either because of personal preferences or specific health reasons, have to be very careful about including or avoiding certain foods and some must spend a great deal of time managing and planning for that.  Others, can follow some simple rules such as at least X fruits and vegetables each day, no sugar for breakfast, no eating after X pm, fish at least twice a week, at least 4 different colors on my dinner plate, no seconds, etc.  Just like caloric budgeting looks very different for different people (and can lead to serious problems if not managed well), a think financial budgeting is the same way.  

I think one of the most important places to start is--what are your primary budget needs at this point?  Is spending a problem?  Credit card debt?  Saving for car repairs?  Manage cash flow when bills (such as insurance or tuition) occur only in certain months or a job is commissioned base?  If your husband is very busy and you do not have pressing financial needs that need immediate attention, perhaps thinking of budgeting on a quarterly basis, or at least sitting down with him once every three months for a short recap would work better than monthly.  

[mommyoffive]

4 hours ago, happysmileylady said:

This is true....sort of.

So we started out doing the budget together every month.  And it worked.  But our monthly meetings often we the exact same thing over and over and over and over.  We don't spend a lot of money lol.

SO, after having done that for years and years and years, I did go long term, annualized everything, and automated as much as I possibly could.

First, I looked at all of the bills and necessary non bill expenses for the year.  All the monthly bills, all the grocery spending, all the quarterly bills, etc.  I added every single one of them together.  I used the online billing history plus our years of past spread sheets where we had already been tracking everything to make sure I added it all up and that I didn't forget anything.  Once I had a total for all those expenses, I divided it out by 26 paychecks and that is the amount that goes into our checking account.  All the bills are then autodrafted out of that account.  For groceries, gas, and allowances for the kids, plus the small amount of personal spending money that DH and I have agreed on for ourselves, I take that out in cash at the beginning of each month, distribute, and then budgeting is done.  If we don't spend all that money, then whatever is leftover goes into our savings account.

Next, I opened a bunch of different bank accounts.  We have a lot.  One is for our freezer beef and pork.  It's a large expense once a year so we save up for it all year.  I looked at about how much we spend on it each year, added a little bit additional cushion (because the actual cost is based on actual animal weight) and then divided that by 26.  That amount is direct deposited from DH's paycheck into that account.  Another is our gifts and celebrations account.  DH sat down and went through every single holiday and birthday and so on that we spend money on, decided how much we wanted to spend for each and added all of that up.  Everything from my parents birthday presents to Halloween costumes and of course, Christmas.  As with the others, we added up everything for the year, divided by 26 paychecks, and that amount is direct deposited into that account.  We have the same thing set up for car repairs, kids expenses, household expenses, etc etc.  Then whenever we need to spend money from those categories, it comes from those bank accounts, not the checking account.  It's like Dave Ramsey's envelopes, but all at the bank, and all automated.  

Medical expenses all come out of our HSA account, which is also direct deposited from DH's paychecks.

We also have 2 savings accounts.  One is our primary savings/emergency fund.  The other is a secondary account that is basically called "oops" or miscellaneous.  The primary savings also receives direct deposits from DH's paychecks.  The "oops" account is very small, and the amount of money in it doesn't change.  It's just a holding place for a small buffer incase any sort of mistake or unexpected overage occurs.  So for example, if DH's workplace messes up his paycheck, the money in the "oops" account can take care of things until they fix it.  Or if we have a car repair that exceeds what is in our car repair account, the "oops" account makes up the difference.  The only time we put money in the "oops" account is if we have to take money out.  

It took quite a bit of work to set it all up.  Lots verifying that we weren't forgetting anything.  But, now that it's all set up, all I have to do is get cash once a month, and then monitor it to make sure it's running smoothly.  It's not hard to change if needed (such as when everything shut down, we stopped depositing to the kids stuff account.)  And if you find you have different spending categories, you can set up different bank accounts for that.  DH's work allows for his direct deposit to be split out among 8 different accounts but if that isn't possible, the same system could be done with automatic transfers.  

That is such a organized way to budget. 

[Amethyst]

EveryDollar app. 

[mommyoffive]

1 hour ago, Bootsie said:

I think budgeting needs really depend upon your own situation and personality.  Some people naturally eat a well-balanced diet without thinking too much about it.  Other people, either because of personal preferences or specific health reasons, have to be very careful about including or avoiding certain foods and some must spend a great deal of time managing and planning for that.  Others, can follow some simple rules such as at least X fruits and vegetables each day, no sugar for breakfast, no eating after X pm, fish at least twice a week, at least 4 different colors on my dinner plate, no seconds, etc.  Just like caloric budgeting looks very different for different people (and can lead to serious problems if not managed well), a think financial budgeting is the same way.  

I think one of the most important places to start is--what are your primary budget needs at this point?  Is spending a problem?  Credit card debt?  Saving for car repairs?  Manage cash flow when bills (such as insurance or tuition) occur only in certain months or a job is commissioned base?  If your husband is very busy and you do not have pressing financial needs that need immediate attention, perhaps thinking of budgeting on a quarterly basis, or at least sitting down with him once every three months for a short recap would work better than monthly.  

I love your analogy.    We used to budget when we were first married.   But at this point we don't anymore.   We have never had any credit card debt , we automatically max out retirement and pay bills what is left we spend.  Our budget from a decade or plus ago are still in our minds and we just sort of stick to it.  We spend XXX at the store every week.   So we just know if we are at or over budget.   Our income is 4 times what it was when we married and we are not big spenders other than travel (with lots of points) and kids activities.   We don't have much debt.   Must of our leftovers every month don't get spent.  Especially now.  We also have a big emergency fund.   Way more than they reccomend. 

We are pretty boring.   Honestly it relaxed me to not be on a budget.  

[Frances]

1 hour ago, mommyoffive said:

I love your analogy.    We used to budget when we were first married.   But at this point we don't anymore.   We have never had any credit card debt , we automatically max out retirement and pay bills what is left we spend.  Our budget from a decade or plus ago are still in our minds and we just sort of stick to it.  We spend XXX at the store every week.   So we just know if we are at or over budget.   Our income is 4 times what it was when we married and we are not big spenders other than travel (with lots of points) and kids activities.   We don't have much debt.   Must of our leftovers every month don't get spent.  Especially now.  We also have a big emergency fund.   Way more than they reccomend. 

We are pretty boring.   Honestly it relaxed me to not be on a budget.  

This is similar to us. I’ve only really ever budgeted in the sense of setting aside money each month for those bills that are only paid one or twice per year (e.g. life, property, and car insurance, property taxes, etc) and have ballpark goals for what we should spend in a normal month on regular bills and more discretionary spending. Even though our income has increased about twenty fold since neither of us are now attending grad school, we’ve continued to live frugally and max out retirement savings and save plenty, including in an emergency fund. One thing I’ve always done, no matter our income, is to write down every expenditure every month. I don’t put it into financial program or spreadsheet, although I suppose I could. We use credit cards to pay for almost everything in order to get travel rewards, pay them off weekly, and never pay interest. They do categorize spending by category at the end of each year, so I can use that to get an idea of where the money goes.

My husband prefers that I handle all financial stuff. Very occasionally we will talk about some big ticket expense or investment or I will mention if we are approaching our loose monthly spending goal too soon.

 

[SereneHome]

I do zero end budget annually.  I consider no expenses fixed expenses, only semi-fixed and variable. I budget savings first, semi-fixed second and variable last.  I charge everything on cc and record it from there.

I did finance and budgeting for a living for many years, both, corporate and personal and I can tell you that corporate does it from the "ground up".  I've helped some friends do it that way, they liked it.

[Mommalongadingdong]

I have a spreadsheet and log purchases based off our bank withdrawals because we use our debit cards for everything. I'll plan out the next month a week or so before, and budget for whatever I know is coming up and add in expected income. We don't do sinking funds and I don't do a zero based budget. So I am moderately budgeted. 

[JustEm]

when dh was working really long hours and I was the main money person and it was difficult because I really hated feeling like I ran everything and got frustrated when dh didn't stay in the budget because he was attached to it at all.  So, what we ended up doing was sitting down together once and figuring out our long and short term financial goals.  Once we figured those out and how much money we needed for them we figured if we could accomplish it without needing to track money.  If not,  dh agreed on a specific dollar amount that he wouldn't go over in a week without consulting me.  It worked for us because it was just easier for me to buy all the things the family needed so he was really only getting extra, either for himself or for everyone.  

It wasn't perfect but it was how it had to work during those times.  If he had not been willing to just agree on a number to stay under per week or month then I would have simply handed all of the finances over to him whether he had the time or not.

[Soror]

Thank you all for sharing. You are given me some good things to consider and I'm formulating some thoughts of how I want to change things up to work better for where we are at now.

[matrips]

We’ve been using YNAB since January.