topic Re: Do you guys use a budget? in Personal Finance

Do you guys use a budget?

Anonymous — Sun, 03 May 2015 13:52:09 GMT

Since I am newly obsessed with personal finance and have read about ten books on the subject in the last month, I have decided to create a budget like all the books suggest. My budget starts tomorrow. I think that it will be a challenge for me to stick to it, especially the $100/mth limit I gave myself on take out food. All of my extra money above my essentials will be used to pay down my student loan (current balance is $5,662).

Does anyone else here use a budget? If so, how well does it work for you? Do you have tips and tricks that could help me along my journey as a first time budgeter?

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 19:17:08 GMT

Yes, always use a budget. Keeps me focused and on track for paying household bills, credit card balances and then set asides for savings and fun. Use an Excel Worksheet for the actual budget document.

Re: Do you guys use a budget?

lg8302ch — Sun, 03 May 2015 14:13:08 GMT

I have tried/started several times...and found some great programs like YNAB and Mint which are great for this purpose IMO. Unfortunately it still did not work out for me but that is not the fault of the program but my own diszipline in noting expenses even with easy tools like synch with PC and mobile devices. I admire everybody that can successfully manage a budget and stick to it. A budget is the best thing to avoid to live paycheck to paycheck. I am so ashamed for not being able to do this on the long run and give up along the route.

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 14:19:19 GMT

@lg8302ch wrote:
I have tried/started several times...and found some great programs like YNAB and Mint which are great for this purpose IMO. Unfortunately it still did not work out for me but that is not the fault of the program but my own diszipline in noting expenses even with easy tools like synch with PC and mobile devices. I admire everybody that can successfully manage a budget and stick to it. A budget is the best thing to avoid to live paycheck to paycheck. I am so ashamed for not being able to do this on the long run and give up along the route.

I didn't use anything fancy to help me, just an Excel spreadsheet on my laptop. I do have some type of app on my phone so that I can log the money I am spending on my variable expenses like fast food and fuel. I hope that I will stick to it, but I guess only time will tell. Did you experience a certain roadblock? Was there one area of expenses that you could not control? I am hoping that my budget will get much better in the fall when my kid goes to kindergarten and I can move the $420/mth day care bill over to my student loans.

Re: Do you guys use a budget?

lg8302ch — Sun, 03 May 2015 14:50:57 GMT

The main problem was all the little things during the day which at the beginning I was entering into the mobile app and then got lazy and slowly started to leave these items out. Kind of I will enter it later at home manner. I did not have problems with the budget itself or the amounts but just properly tracking it. Started twice and my longest success was 6 months. It showed me the amounts set to spend work with my budget. Just could be a bit more disziplined with the whole administration that comes with it. I wish you all the success and it is a great way to stay on track and live within your means. I might consider starting again I will have to set a budget item that I will have to pay a fine for not entering spent amounts Maybe this will get me to do it properly on the long run or at least some extra savings if the penalty is high enough

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 15:10:33 GMT

@lg8302ch wrote:
The main problem was all the little things during the day which at the beginning I was entering into the mobile app and then got lazy and slowly started to leave these items out. Kind of I will enter it later at home manner. I did not have problems with the budget itself or the amounts but just properly tracking it. Started twice and my longest success was 6 months. It showed me the amounts set to spend work with my budget. Just could be a bit more disziplined with the whole administration that comes with it. I wish you all the success and it is a great way to stay on track and live within your means. I might consider starting again I will have to set a budget item that I will have to pay a fine for not entering spent amounts Maybe this will get me to do it properly on the long run or at least some extra savings if the penalty is high enough

No day like today! Make a new one and we can start it together tomorrow. It will be a challenge to see who can stick to it for the longest!

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 15:32:02 GMT

I made an Excel spreadsheet that lists each bill that I am responsible for paying each month (wife pays the remainder). So I have the due dates and the amounts due each month. Once I know the amount that is due I post it in the cell for that month and the background color is black. Once that bill is paid, the cell turns green. That way I know it's paid.

Now, just in the past month or so I decided to instead of pay each bill with my bank debit card, I'm going to pay using the rewards card most suited for that payment. For example, US Bank Cash+ is designated to pay my cell phone bill since it's 5% back. I want to utilize all these cards I recently acquired in my app spree to their fullest. So any food purchases are going on my Chase Freedom or AMEX Blue which are 5%. I do not touch my money in the bank whatsoever and every other week when I get paid I pay down my balances on the rewards cards. Nothing ever has a balance over $300. Mostly I don't want $300 to report on a card when they close for the month and get reported. This seems to work well for me. The only thing I cannot pay with a CC is my Toyota Tundra payment, that goes directly from my bank acct. and one click pays it on the loan since my bank also has my truck payment.

I also signed up for Mint a few months ago, and I use it and registered all my cards, however since I am using the system I've got going now, Mint really isn't necessary and when Mint reminds me of a card coming due, it's usually already is paid and no minimum is due.

This is my system that works best for me. I hope to start seeing the benefits of the points and cashback rewards piling up on these cards soon.

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 15:58:48 GMT

YNAB.

It changed the way I look at money. I know it sounds stupid but it never really sunk in how limited money is until I (mostly) adopted their philosophy.

They advocate using your credit card like a debit card, which I can get behind. But they also expect that you'll pay your cards to zero every month which always seemed 'wasteful' to me in that you get to use the float, right? Why not use it?

Then I found this site and I realize that by letting cards report big balances, particularly once I started spreading that out among multiple cards, it was really not doing my scores any favors. Now I see how well they work together (YNAB's philosophy and trying to maximize scores) so I have a new motivation to work out of the CC float.

It was initally hard for me to develop the habit of entering stuff into my iphone (I started using it before there was an iphone app. I've mostly got it now. When I get busy, I lag. But then I download and import. And I don't beat myself up. The key is reconciling once or twice a week to keep from falling behind.

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 16:12:38 GMT

@Vulcan1600 wrote:
I made an Excel spreadsheet that lists each bill that I am responsible for paying each month (wife pays the remainder). So I have the due dates and the amounts due each month. Once I know the amount that is due I post it in the cell for that month and the background color is black. Once that bill is paid, the cell turns green. That way I know it's paid.

Now, just in the past month or so I decided to instead of pay each bill with my bank debit card, I'm going to pay using the rewards card most suited for that payment. For example, US Bank Cash+ is designated to pay my cell phone bill since it's 5% back. I want to utilize all these cards I recently acquired in my app spree to their fullest. So any food purchases are going on my Chase Freedom or AMEX Blue which are 5%. I do not touch my money in the bank whatsoever and every other week when I get paid I pay down my balances on the rewards cards. Nothing ever has a balance over $300. Mostly I don't want $300 to report on a card when they close for the month and get reported. This seems to work well for me. The only thing I cannot pay with a CC is my Toyota Tundra payment, that goes directly from my bank acct. and one click pays it on the loan since my bank also has my truck payment.

I also signed up for Mint a few months ago, and I use it and registered all my cards, however since I am using the system I've got going now, Mint really isn't necessary and when Mint reminds me of a card coming due, it's usually already is paid and no minimum is due.

This is my system that works best for me. I hope to start seeing the benefits of the points and cashback rewards piling up on these cards soon.

I am in the same mindset when it comes to maximizing on the rewards. I have recently automated all the bills that I can possibly pay with my QS1 card for the 1.5% cash back rewards. I guess that I will change this some when I get my Discover IT in the mail based on the rotating categories. I'm not really sure what they offer in the categories since I am new to Discover, but I will try to maximize the rewards for what I would have been spending on my bank debit card anyway. I can't pay rent, car insurance, and student loan payment with my cards; all of these have to come directly from my bank account. If I could charge them, I would do it in a heartbeat. I do have to make multiple payments on myy QS1. I usually pay anytime I see that the current balance is updated. I know that CC companies don't like this frequent paying, but I am hoping that they will see my need for a higher limit and adjust it accordingly.

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 16:18:04 GMT

Are you sure you can't pay your car insurance with a card?

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 16:27:22 GMT

@Anonymous wrote:
Are you sure you can't pay your car insurance with a card?

I called them last week and asked. They said it must be drafted from my account. I use Shelter insurance for my cars. I may be able to pay on CC for my motorcycle policies, since they are with Progressive, but I only pay once a year for them so I'll have to wait until next February to find out.

Re: Do you guys use a budget?

Anonymous — Sun, 03 May 2015 18:48:10 GMT

@Anonymous wrote:
@Anonymous wrote:
Are you sure you can't pay your car insurance with a card?
I called them last week and asked. They said it must be drafted from my account. I use Shelter insurance for my cars. I may be able to pay on CC for my motorcycle policies, since they are with Progressive, but I only pay once a year for them so I'll have to wait until next February to find out.

I work in the auto/home insurance industry and never heard of a car insurance company that won't take credit cards. As for the motorcycle, mine is with Geico and they allow you to use the major cards too. Mine is about $230 per year if I pay it in full, which I will this year. I'll put it on the card and then immediately pay it off after using the QS card for the points.

Re: Do you guys use a budget?

Anonymous — Mon, 04 May 2015 02:48:05 GMT

Yes! A budget is vital if you want to reach your financial goals. I use Mint and check it every single day.

Re: Do you guys use a budget?

Anonymous — Mon, 04 May 2015 17:58:46 GMT

Have a budget, stick to it, and don't cry (too much) when it all goes awry.

"No plan survives first contact with the enemy".

With a good plan though, there's room for adjustment and corrections.

With no plan, you never know where exactly you're standing.

Re: Do you guys use a budget?

vanillabean — Mon, 04 May 2015 23:31:36 GMT

Yes, steer clear of a checking near zero. That’s what my spreadsheet is for.

Re: Do you guys use a budget?

Anonymous — Tue, 05 May 2015 02:11:42 GMT

No, I am naturally quite frugal with my money. I have no physical budget but that doesn't mean I don't watch pretty much every dollar I spend. I understand this probably doesn't work for the vast majority of people though. Honestly being frugal has both its good and bad.

Re: Do you guys use a budget?

Anonymous — Tue, 05 May 2015 19:35:07 GMT

@Anonymous wrote:
No, I am naturally quite frugal with my money. I have no physical budget but that doesn't mean I don't watch pretty much every dollar I spend. I understand this probably doesn't work for the vast majority of people though. Honestly being frugal has both its good and bad.

This has been my method for years. I am not in debt (other than a 5K student loan) and it has worked well for me. I just thought I would try something different to see if it works better.

Re: Do you guys use a budget?

disdreamin — Tue, 05 May 2015 23:43:47 GMT

I've tried a written budget, but honestly just didn't stick with it. I do have a significant portion of my pay (about 25% of net) direct-deposited at our CU and then transferred into accounts designated for travel, gifts, repairs, savings, etc, and obviously contribute to retirement each paycheck as well (~15% of gross). The rest goes to a bank checking account that the bills are paid from. That's the extent of my budgeting at this point.

Re: Do you guys use a budget?

Anonymous — Wed, 06 May 2015 04:26:40 GMT

Absolutely. I tried a number of different methods of tracking money/expenses in the past, created dozens of spreadsheets, linked all my accounts with Mint, and found nothing that worked for me, as I'd keep everything updated, then lose interest/motivation, stop updating it, and everything would fall apart.

The system I use now is comprised of an Excel workbook, which contains 2 sheets. The first is my Accounts Summary page, which has 3 sections. The first is a list of all bank accounts, including my Checking, Savings, and IRA accounts. This section contains all of the information I need, including balances, interest rates, as well as URL links that I can click to open a browser window and navigate to their site. The second section is all of my utility/monthly payments, like auto insurance, phone bills, rent, etc., basically all monthly payments that do not carry a balance month-to-month. This section shows payment amounts, last payment made, dates payments were made, payment status (pending, cleared), and which account was used to make the payment. The third and final section is loan and credit card accounts, which includes all of the information above, with the addition of interest rates and balances. It's time consuming to keep this updated, but I find it extremely helpful to have all of this information in one place, as it allows me to take a look at my entire financial situation in one place, so I always know exactly how much money I have available, including available credit on my credit cards, money in checking/savings accounts, etc..

The second page is my Yearly Budget. I don't bother with a Monthly budget, as I know some months are longer than others, some months have 3 paychecks, and some months have more expenses (such as annual fees on CC's, annual dues for memberships, etc.), so I can track the variations from month to month, and plan accordingly. This budget has everything budgeted, to the penny, from what I pay out in bills, to grocery and fuel budgets, savings deposits, and it automatically calculates how much income there is above/below what I have budgeted to go out in any given month. This is updated constantly, but once I sat down and figured out which months had 3 paychecks, where my annual fees fell for my credit cards, when memberships were due, etc., it was all pretty much consistent from year to year. Again, a budget should be a fluid, flexible arrangement, and I try to make sure I leave enough wiggle room for unexpected expenses.

Beyond the budget, I have problems with discipline in spending, I tend to overspend when that account balance shows money is in the account. To resolve this, I use a bank that allows for sub-accounts, much like an envelope system, but it's all online. Once a month, when I get paid, I seperate my income into these sub-accounts for each expense line item in my budget. Once the money is set aside, my "available" balance shows what's left above/beyond what's budgeted. This amount is then transferred to my online savings account, where it's out of reach and less likely to be spent on non-budgeted costs, like eating out, buying unnecessary things, etc. It takes time to get used to a disciplined budget, but once you do, you take control of your spending, you know exactly what's going out, how much you need to cover all expenses, and planning ahead is much easier.

My system isn't right for everyone, but it works for me. The reason it works, is because keeping the spreadsheets updated requires checking accounts on a regular basis. Since I'm paid once monthly, I pay the bills once monthly. This forces me to take control, and maintain accountability for everything in/out. Before I started doing this, a lot of times, things would slip through the cracks, I'd forget to pay a bill, spend money on stuff I didn't need, and wind up running out of cash before payday, which is a terrible feeling. Since I implemented the system I'm using currently about a year ago, I haven't missed a payment, and my credit score has increased as a result. My on-time payment rate is nearly 98% now (as reported by Credit Karma), my payment histories on all accounts are "on time" for the last 14 months or so, and I've been able to use the extra money each month to build up my emergency fund. If anyone is interested, I can make a generic blank version of my Excel workbook to share, but I'm fairly certain I used generic templates from Excel online to build what I've got, and made a few tweaks to suit my needs.

Re: Do you guys use a budget?

Anonymous — Wed, 06 May 2015 23:13:52 GMT

Jeeper that's quite a system you have going on. Mine is a smaller scale of what you are doing and I've always been able to budget correctly doing my method too. Good job!