{update}How do you budget?-I'm trying YNAB!

[FairestOfThemAll37]

Not in the general sense, but how do *you* budget?

Since folks on this board like to dig up old threads I'll just mention out of the gate that over the years, I've asked a few times for budget/money saving techniques. Every so often, I get a bee in my bonnet that I should be doing something differently financially. So I get geared up and read and ask here and then...pffffttt. I end up just maintaining the status quo, which I decide works "well enough."

So I'm back on it again lol. How do you budget and why do you think that method works? What do you recommend for somebody who has had trouble sticking to a structured budget? (Who also just maybe has some resistance to lifestyle changes).

TIA as always!

 

[DISbot]

I use mint to track spending, but my main budeting mechanism is multiple checking accounts and loose categories. Basically mint is a knowledge and trend gathering tool for me, while physical accounts are spending enforcements without category constraints.

I set up direct deposit of the paycheck to go into 3 accounts, purposed as follows:
1 - fixed spending/bills/groceries (this is easy to calculate, and based on pay frequency I try to keep a buffer of one months bills in the account so I dont have to worry about pay dates vs bill dates). I set up autopay from this account for any bills I can that are fixed. For electric and the likes I schedule the payment after reviewing it to make sure nothing insane has happened. For non-monthly bills, a monthly amt is factored into the deposit (ex car insurance / 6 goes in monthly and every six months the insurance is paid)
2 - fun/flexible spending. Based on what I know my needs and spending habits to be, I have a fixed amount go into this account. This covers eating out, shopping, etc. I review how this plays out in various categories, but I don't nitpick.
3 - savings. Everything else auto-deposits into savings where I don't touch it (I do have this broken into emergency fund, vacation, and so on). I also have a fixed threshold that if either checking account exceeds their threshold, I roll some of the money into savings. For example, if my minimum checking account balance was 500, I contributed 250 monthly, and at some point the checking account has 1,000, I would take 500 and move that into savings, because this means I have been spending less than my budgeted 250 for a few months (yay!). I would also re-evaluate if my monthly budget should really be 250, or maybe my budget really is lower now.

With this set-up I have a physical deterrant from overspending because the money doesn't exist in the account (or I have to consciously remove it from savings and feel guilty), as well as a motivator to reduce spending (if I hit the account cap I roll money into savings that could warrant a vacation or trip or additional house payment).

I think the out of sight out of mind method for savings is valuable, and I think one of the best things you can do is keep the categories broad and only really worry about the bottom line. Category awareness allows you to find places to cut spending, but if this month you did great cooking at home and next month you can avoid the shopping spree then in the end it is still net savings no matter where it came from.

Not sure if this is what you were looking for.

 

[DISbot]

Also, for the savings I keep everything in on account in order to increase the interest rate, but have virtual buckets in order of priority. The first X dollars are anemergecy fund, the next Y are saving for a purchase for the house or whatever, and anything over that is vacation/spree money up to Z.

 

[elcmum]

I have a spreadsheet and plan ahead six months at a time. I copy/paste the standard bills/savings accounts that need to be paid through the 1st-15th, and then the bills that are paid from the 16th-31st. And thennnnnn, I go through and add the items that are weird sort of occurrences, likes birthdays, car registration, Christmas spending, school supplies, Halloween costumes, and anything weird and bizarre that may pop up.

i use an app called Prism and have my bills and credit cards set up through there, and so at the beginning of every two week pay period I verify what needs to be paid with Prism and set it to pay if it isn't on autopay, and then make notes on my spreadsheet about what is going to be paid on what day. Prism also shows me a glance at my checking/savings accounts and also credit cards, so I know where my money is without looking at seven different accounts.

My paycheck automatically diverts a percentage of my pay into long-term savings, so I don't even think about that money. I have a smaller savings account which is tied to my checking account, and that's for more short-term needs.

I have a credit card that I use for gas only, and so every two weeks I bring that down to a zero balance.

I also have trouble with sticking with a structured budget, so it always helps me to have something to look forward to and work to pay off. I like a challenge, and that sort of motivates me to help with sticking with my budget. Right now my challenge is to keep our groceries to less than $100 a week, with the promise that any funds leftover will go to our October WDW trip.

 

[pixiemama91]

I keep a pretty detailed excel spreadsheet. Its set up so everything automatically calculates and carries over the ending monthly balance to the next month. Its broken down into 4 sections. I have monthly income, debt payments, fixed monthly bills, and other expenses such as groceries, gas, savings etc. I have it calculated about 5 years into the future. Obviously things will change over 5 years but its based on current status. As things come up or we need to plan for additional expenses, I can see how it will effect the budget long term.

 

[nat8199]

I have a spreadsheet on my google account where I record every transaction during the month into separate categories. Each category has a goal to keep our spending under for the month. I also use Ally bank and have a zillion different savings accounts for things like house repairs, medical, vacations, etc, money gets auto transferred into these after each paycheck so it just disappears from what is available to spend each month in our checking account.

 

[IndianaRRT]

No spreadsheets here, but we are a little more hands-on than some. We review everything twice a month (when DH receives his salary disbursement) and continuously balance accounts using a calendar-based record system. Auto drafts include: retirement contributions, vacation fund, life insurance. We calculate additional savings and allocate among standard savings, ready cash, and special savings. We then pay 'regular' bills: utilities, etc. After that is mortgage, car, and credit card payments, which get additional amounts added to the standard based on extra income (my paychecks vary). What is left over goes to incidentals and pocket money. Whatever remains at the next payday is placed in standard savings, and we start over. It's complicated, but it's what works for us.

 

[Jedimom]

I keep it pretty simple and old-school: My paycheck gets direct-deposited into my checking account twice per month. On every pay day, I go and transfer a set amount of money directly into savings. It can vary depending on what I know I might have coming up for expenses. I then make a second transfer into savings of whatever my end balance was right before my paycheck hit.

 

[tvguy]

Pretty simple. I make $ xxxx,xx every 2 weeks, I spend less than that, and whatever is leftover goes into savings. Just the way I was taught to budget.
It is funny how your priorities and budgeting change over the years.

In 1990 I had an $1,100 a month house payment, a $325 a month car payment and paid about $800 a month for child care.

Today, all those expenses are gone, but I have new ones and some could be considered optional spending. I pay $100 a month for a gym membership, $80 a month for cell phones, $39 a month for burglar alarm monitoring, $57 a month for Internet, $110 a month for satellite tv, $179 a month for life insurance, $200 a month for long term care insurance, $40 a month for pest control, $10 a month for satellite radio.

I make a lot more now than I did in 1990, and I have no clue how I made those house payments, because $1,100 a month would be hard to come by with today's higher income.

 

[mi*vida*loca]

I keep it simple. I'm paid biweekly.

I have a certain amount direct deposited to savings and checking when I get paid.

I pay my bills and if there's more than I need I do a transfer to savings. I live off of what's left for the next two weeks.

 

[angierae]

I budget to zero with a spreadsheet. Bills, long term savings, short term savings "fun money", groceries, gas, incidentals, etc. Everything has a category

Anything left at the end of the two week paycheck rolls into the same category the next paycheck. If there's enough rolled into the next week's to completely fund the next weeks, that amount goes into long term savings as well.

So if I budget $40 every two weeks for gas but only spend $25 (very likely, for me), eventually there's $45 in the budget before I add the next paycheck in, so that $45 gets swapped over to savings and I start over at $40.

Things sometimes need to be juggled around, but mostly it works for me.

 

[FairestOfThemAll37]

Thanks for all the input It sounds like there's mix of expense tracking and true zero sum budgeting.

It's definitely the latter that I've struggled to adopt. If I'm honest, I also struggle to do any real tracking.

When I add up how much I spend on food, I'm usually aghast. But I hate cooking (also a liability on the kitchen) and also hate having a full refrigerator (I know, weird) so I eat out a ton. I always think tracking better or setting a $ amount for food will help me change my habits. Do any of you find this to be true? Ugh changing habits is so hard lol.

 

[FairestOfThemAll37]

I have a spreadsheet and plan ahead six months at a time. I copy/paste the standard bills/savings accounts that need to be paid through the 1st-15th, and then the bills that are paid from the 16th-31st. And thennnnnn, I go through and add the items that are weird sort of occurrences, likes birthdays, car registration, Christmas spending, school supplies, Halloween costumes, and anything weird and bizarre that may pop up.

i use an app called Prism and have my bills and credit cards set up through there, and so at the beginning of every two week pay period I verify what needs to be paid with Prism and set it to pay if it isn't on autopay, and then make notes on my spreadsheet about what is going to be paid on what day. Prism also shows me a glance at my checking/savings accounts and also credit cards, so I know where my money is without looking at seven different accounts.

My paycheck automatically diverts a percentage of my pay into long-term savings, so I don't even think about that money. I have a smaller savings account which is tied to my checking account, and that's for more short-term needs.

I have a credit card that I use for gas only, and so every two weeks I bring that down to a zero balance.

I also have trouble with sticking with a structured budget, so it always helps me to have something to look forward to and work to pay off. I like a challenge, and that sort of motivates me to help with sticking with my budget. Right now my challenge is to keep our groceries to less than $100 a week, with the promise that any funds leftover will go to our October WDW trip.

I love Prism! I've been using it since it first came out and it makes things so much easier. I've usually got spending on 3-5 credit cards so it's nice to see the due dates and total amounts all lines up in a row.

 

[Elliesmommy]

Mine is simple. I am debt free (worked hard to get that way). I get paid biweekly and I split up my bills as such. I pay half of my rent out of each check. My only other bills are for internet $70 for internet, $15 for a total of two cell phones, and $50 for monthly bus passes ($25 each. One for my daughter and one for myself) (we live in the city. No need for a car). I also split up these expenses between paychecks.

10% is automatically put into general savings, and 5% is put into an emergency fund. My medical/dental/401k is taken from my check per usual.

If I need a car to get out of the city, I rent one for $9.99/day from Enterprise. I found this to be considerably cheaper than owning a car and being a slave to monthly payments, insurance, and upkeep. I also do Uber from time to time when a bus is not convenient.

As you can see, my bills are extremely minimal. No need for a spreadsheet. My food/entertainment/leisure money is just is what is left over after my bills are paid.

 

[LovesTimone]

DH and I - really do and don't budget - We are empty nester, so no child care, or private school cost, or after school activities to pay for. Which was quite shocking for us when we did not have to pay for these things. So 1 account is for paying bill, and a certain amount is direct deposited into this account, all of our bills paid on line. Then we have a saving account that, a certain amount goes in every pay day, then any extra money... bonus checks, stock disbursement checks, money from my eBay business, I work sometimes as a consultant a couple of times a year, or help out at my old job... All that money goes into the saving. Then we have a emergency fund... truly a emergency account. For large ticket items like new tires on my SUV that we were not expecting we had planned to get new ones later on in the year but it did not work out that way, or a medical and or dental bills. With all that said, we don't stick to a strict budget per say.

DH checks all the accounts daily the banks and credit cards....really a couple of times a day, which if there is a problem we know about it right away. Which twice he has found charges on credit card that we did not make and got it taken care of right then, also we will double check the statements from the credit cards, double check receipt while out shopping or eating out. For example I went to pick up at the dry cleaners, they were really busy so I paid took my clothing and went to my car when I look at my receipt it was for 27 and change then I looked at the slips attached to my clothing and it did not add up it was only 17 and change, so I took it all back in she was like oops, we can owe you a credit of 10.00, I was like no I want you to refund my money, I had paid in cash, she was like I will have to call a manager, I was okay that's fine, in the end she gave me back my 10.00 and I have since changed dry cleaners. I know its was only 10.00bucks but its our 10.00 bucks. There have been countless times that we will find extra cocktails, or 2 appetizers or extra entrees or not what we ordered added to our bill, so simply looking over the bill has saved us money.

DH and I both are very thrifty with money, I really watch the household spending, especially for groceries, household goods, really daily life items. We plan on big ticket items that we need to purchase.

 

[leebee]

For years DH and I were paid on the last day of the month, so I set up all bills to be due around the 15th. Our checks are automatically deposited into our accounts, with 10% of DH's and 5% of mine going into savings and the balance in the checking account. I sit down in the evening of the last day of the month and write checks for all the bills (except those that can be charged). We charge our day-to-day expenses and pay the bill monthly, in full, and i keep an eagle-eye on the expenditures, so I know there is always adequate money in the account for the monthly bill-paying. It's pretty simple. If we decide to vacation, or when we were paying DD's tuition, or buy a new couch, or whatever, the money comes out of the savings. I never let the savings drop below a certain amount; if we want to do/buy something that will take the account below that minimum, we wait until there's more money in the account before making the expenditure. Pretty simple. Now we are paid every other week, but I haven't changed my system because it works for us.

 

[lorac4disney]

For me, I do not put money into savings so long as I owe money that is charging interest on it. I am focusing on paying off all of my debts before saving money. I use to have a cash and carry policy on purchases so that I only bought what I had the money to buy (such as vehicles and homes), but I somehow got away from that over the years. Now I am taking a two prong approach to my budget. I am looking at reducing my monthly expenses (utilities, food, and miscellaneous spending). For this, I am doing things like growing my own organic vegetables and not eating out. Instead of blowing my money on stuff that I don't need, I am putting every bit of it towards bills. I am also looking at ways to bring in extra income. My husband is doing side jobs such as selling firewood, tilling gardens, mowing yards, and selling surplus vegetables on top of his full time job. I am going through our possessions and purging a lot of stuff that we simply don't need and selling it all online. All of the money we make off of those things are going directly towards our debts. Once everything is paid off, then we will be putting money towards savings again. At that point, a minimum of half of our income goes towards savings while the other half will go towards our living expenses and things we want to buy. For me, it is hard finding a balance between paying off our debts as quickly as possible while continuing to live at an acceptable level on our lifestyle. I really have no interest in dumpster diving to save on food or in selling our vehicles in order to find something cheaper (and less reliable). So I first have to decide at what level I and my family are comfortable. Then I cut corners and trim the fat when it comes to everything else that doesn't matter as much to us.

 

[janicept]

Not so much a budget but I make sure I max out all tax deductible and tax deferred options plus pay as little money to penalties and interest. Max out 401K, HSA, ROTH. Only debt is the mortgage on our main house and that's just because my husband believes it's better to pay a mortgage since our interest rate is around 3%. I have a great credit card that gives 4.5% cash back on groceries and gas stations up to $500 a month I think. I use a different credit card for other purchases that gives 1% toward gift cards that I get to Home Depot or restaurants we can go to on vacation. Pay off all card balances so no interest. I go to couponing websites to get good deals on food. Have a free membership to a restaurant supply store through my business that I can get great deals on things that you don't generally see coupons for like fish, cheese, and veggies. We do a lot for ourselves that other people might pay for like yard work, cleaning, home maintenance. My husband is super handy with small engine repair, welding, and other mechanical stuff. Right now he's putting together a 3D printer that he ordered as parts from China. We do our own taxes and fix things instead of replacing as much as possible. Once one of the TVs at the FL condo was broken. We brought it home and did some research. He found that it likely only needed an $8 part which he ordered and sodered it in himself - fixed it. I'm a PT so medical things are my strength. Simple medical issues like back pain or tendonitis we don't have to go to other people to fix. I buy things on ebay or from China to save money. Like $100 jeans for $20 used on ebay. Sell things on ebay or take to Goodwill for the tax write off. Since we don't have kids I really price just about everything before buying since I have plenty of free time. We keep the heat at 68 degrees in the winter and 73 in the summer even though it's not real comfortable. Saved about $7K on my car with credit union member pricing and custom ordered rather than buying used or floor model to only get the options I absolutely wanted. Bought a condo in FL to save on hotel costs. For certain items we do pay more for quality like furniture and appliances. I use a tracphone since I don't use my cellphone much which only ends up costing about $100 for the year.

 

[FairestOfThemAll37]

****Update****
Thanks for all the replies!

I'm takin a huge deep breath and jumping into the trial for YNAB. I have to admit I'm a little overwhelmed because I don't really get it but I like to think I'm a fairly intelligent person lol. It's definitely not intuitive for me.


How did somebody with a previous non-existent budget decide to dive into something so structured you ask? Well I got hit with an unexpected tax bill (not something I could have budgeted for all year), just found out one of my monthly expenses is increasing about $200/month, and threw down an insane deposit on a vacation. It's making me panic a little lol. So I've read rave reviews on YNAB and need to feel a greater sense of control.

Any YNAB tips much appreciated. It looks like my big issue currently is I use the money I make in April to pay April bills. I should be using March money to pay April bills? Is that why I'm completely in the red? I guess I need to shuffle $ around?

Breathe...

 

[elaine amj]

****Update****
Thanks for all the replies!

I'm takin a huge deep breath and jumping into the trial for YNAB. I have to admit I'm a little overwhelmed because I don't really get it but I like to think I'm a fairly intelligent person lol. It's definitely not intuitive for me.


How did somebody with a previous non-existent budget decide to dive into something so structured you ask? Well I got hit with an unexpected tax bill (not something I could have budgeted for all year), just found out one of my monthly expenses is increasing about $200/month, and threw down an insane deposit on a vacation. It's making me panic a little lol. So I've read rave reviews on YNAB and need to feel a greater sense of control.

Any YNAB tips much appreciated. It looks like my big issue currently is I use the money I make in April to pay April bills. I should be using March money to pay April bills? Is that why I'm completely in the red? I guess I need to shuffle $ around?

Breathe...

Breathe!!! The big rule with YNAB is "roll with the punches". Just shift your money around and cover your overspending with another category.

I liked budgeting well enough but hated tracking (which meant we had no way of knowing if we met our budget that year). DH and I have always been frugal so debt was never the issue - I just finally wanted to get a better handle on our money and reduce waste.

So a bit over a year ago, we started YNAB. I did find the learning curve a wee bit steeper than I expected. It REALLY helped to watch those videos (and I hate watching tutorials) and follow each step one by one instead of just diving in and trying to figure it out. YNAB follows a very specific methodology and EVERYTHING is set up a specific way for very careful reasons - most of it to gently guide u to handle your money better.

I have to admit, I still don't understand how they calculate Age of Money but whatever, I do trust the system.

Also , it REALLY helps to remember that at its core, YNAB is an envelope system. U are not supposed to spend money u don't have!!

I have to say, I have researched just about every system/app out there and Finally decided that YNAB is the only one that meets all my needs. Overall I like the system.