NSBR...Budgeting

For those of you who have a budget do you follow it down to the penny? Do you follow it all? Do you find it helpful? Every year I say I'm going to follow a budget and I don't...I'm an impulse buyer...Heck I bought a Wii just because I was depressed about going back to work...

Totally stick to my budget. We do the Dave Ramsey plan. Everything is in a cash envelope. My "play" money is kept in the account so I can do online shopping like EVERY saturday at SSD! LOL

I do try to save as much money in other areas though so if we get "extra" money in other envelopes then we can splurge on an unplanned expense or add it towards extra groceries if needed. That is not what Ramsey says to do but it is working for us. I will say that this has taken a couple of years to get use to and to get the hang of. We have made mistakes but we have stuck it out also. I am happy to report that we are debt free minus my van and our house. The van will be paid off in less than two months though. SO, it will just be the house!

I hope that helps.

yep...we are completely debt free. No credit cards, no mortgage, no car payments and no loans. I just took what we made and figured out our bills and what we had leftover to play with and what went into savings and did it every week. My husband has been out of work for awihle and I have not been able to find a job but I know if we had not followed a budget all those years and paid everything off and lived within our means we would have been in serious trouble when he was unable to work anymore.

jessica31876 said:

yep...we are completely debt free. No credit cards, no mortgage, no car payments and no loans. I just took what we made and figured out our bills and what we had leftover to play with and what went into savings and did it every week. My husband has been out of work for awihle and I have not been able to find a job but I know if we had not followed a budget all those years and paid everything off and lived within our means we would have been in serious trouble when he was unable to work anymore.

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WOW! Congrats on being debt free!!!!! We will be working hard on getting our mortgage paid off. We just bought the house 3 years ago. I think we will need about 5 years to have it paid in full. Maybe sooner. We will see. I am so glad that you guys didn't have debt to totally stress you out when your hubby wasn't able to work! Makes all that hard work worth while!

I'm in the same position as you, Rachelle. We've been saying forever that we need to make a budget, but it hasn't happened yet. My husband used to be a budget analyst and made multi-million dollar budgets for the government. You'd think we'd have managed to get outselves on one! We're debt free except for our mortgage and a car that will be paid off in a couple of months, but we should be saving more than we are, especially in the kids' college accounts.

we need to be on a budget! i don't even keep a checkbook. i pretty much know bill wise what goes out but i don't really keep track of other expenses. but i'm going to start budgeting. its my resolution for this year, lol

Well I wish we had saved alot more then we did and my husband going out of work happened because we had a car accident which really messed up his back. He had to file for disability and is in the process of going in for surgery on his back. We went for four months with what was in savings and our income tax return so I guess that isnt to bad but had we put more in savings it would have been nice. One thing that helps us is my husband is amazing at DIY kinda stuff so electrical/plumbing/mechanical type stuff he does himself and I assist. Saves a ton of money. When it comes time to buy a new car we always buy used. New to us but never brand new. He really looks for something that is wrecked because that is what he does is body work and you can get a wrecked car dirt cheap and since there is no labor costs for fixing it he can usually repair it for really cheap. And the final thing is I am a firm believer that unless it is an emergency anything you buy should be bought with cash. I know there are instances where you have to use credit but we pretty much always purchased everything with cash.

taracotta7 said:

WOW! Congrats on being debt free!!!!! We will be working hard on getting our mortgage paid off. We just bought the house 3 years ago. I think we will need about 5 years to have it paid in full. Maybe sooner. We will see. I am so glad that you guys didn't have debt to totally stress you out when your hubby wasn't able to work! Makes all that hard work worth while!

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jaylensmom said:

For those of you who have a budget do you follow it down to the penny? Do you follow it all? Do you find it helpful? Every year I say I'm going to follow a budget and I don't...I'm an impulse buyer...Heck I bought a Wii just because I was depressed about going back to work...

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By follow, do you mean in terms of tracking spending or in terms of sticking to the original budget you set in place?

Nettio said:

By follow, do you mean in terms of tracking spending or in terms of sticking to the original budget you set in place?

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Both but mainly do you stick to the original budget you set in place...

I do track what I spend in Quicken...well most of it anyway because sometimes when I have cash and spend it I couldn't tell you what I spent it on...

taracotta7 said:

Totally stick to my budget. We do the Dave Ramsey plan. Everything is in a cash envelope. My "play" money is kept in the account so I can do online shopping like EVERY saturday at SSD! LOL

I do try to save as much money in other areas though so if we get "extra" money in other envelopes then we can splurge on an unplanned expense or add it towards extra groceries if needed. That is not what Ramsey says to do but it is working for us. I will say that this has taken a couple of years to get use to and to get the hang of. We have made mistakes but we have stuck it out also. I am happy to report that we are debt free minus my van and our house. The van will be paid off in less than two months though. SO, it will just be the house!

I hope that helps.

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Also when you say cash do you mean no checking account?

I sorta budget, but its super loose, so not totally. I am fairly cheap though, so it works for me. I just recently seperated from my dh though, so its been a change working it out, plus a lot of the extra money I get that I would normally save will be going to a lawyer. That part sucks, but at least I will have it.

jaylensmom said:

Also when you say cash do you mean no checking account?

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We have a checking account. I use cash for groceries, gas, entertainment, ect. We pay mortgage, gas, electric, cable and phone automatic through the account. Taking ONLY cash (no credit or debit cards) when I go shopping has been a life saver. The wiser I am with my choices at the store, I actually see the cash go back into my pocket. We don't finance anything anymore. If I need a new dishwasher.....we save until we got what we need and then buy. Yes, that means hand washing for a couple of months but we don't have that debt hanging over our heads.

Another great freedom that I have experienced in the last couple of years is paying for Christmas with cash!!!!! We both have HUGE families and christmas can become a BIG spending time. We set a budget amount per person and I go get the cash out of our savings account and that is it. I spend what I got. Nothing more. That has been the biggest thing for me.

I would highly recommend Dave Ramsey's books and Financial Peace University. It has been life changing for me. I may not do his exact plan but I have applied all his principles. Here is a link

when you guys talk about the bills and then having what's left over in cash --- are you working a month in advance? or how does that work? Like, is the money that you are bringing home in January going to be what you budget for February?

I have a list of bills and due dates and use the paydays to determine what needs to be paid by when. But as far as groceries, and gas, I don't have an actual set amount to spend.

jaylensmom said:

Both but mainly do you stick to the original budget you set in place...

I do track what I spend in Quicken...well most of it anyway because sometimes when I have cash and spend it I couldn't tell you what I spent it on...

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I'm pretty flexible with my original budget, not in that I ever allow myself to go over budget, but that as the month plays out, I will adjust the numbers as needed. If I know we're going to be over in one category then I'll decrease what I've budgeted from another category so that the overall budget still works. It's not something I have to do very often and I prefer not to but it's there for the times when life happens and an unexpected expense or purchase in a specific category pops up. I think the key to budgeting, especially when you're just starting, is to give yourself some breathing room or else you'll just get frustrated and won't stick with it very long.

As far as tracking, I do track all the budget categories down to the last cent. We use our debit cards for almost everything, so I don't bother writing down transactions (I'm WAY too lazy for that ), I just input the information once it goes through my bank account. The only thing I don't bother tracking is cash. We almost never use cash so as far as I'm concerned once it's out of the account, it's considered spent. I just categorize the ATM withdrawal and I'm done with it.

We're not really impulse buyers so for the most part the budget really runs itself, but there are a few categories I keep a closer eye on: clothing, entertainment, dining out and Target. Those are the ones we're mostly likely to go over in so I keep a closer eye on those. I don't make any major purchases unless I know there's room for it in the budget but I agonize over anything over $10 anyway so that's pretty easy for me, haha.

We mostly stick to the budget. There are always a few things during the year that mess it up but not too bad & the money mostly comes from our home equity credit line when it does and it has a 2% interest rate so we don't feel too bad about using it. Like we spent Jan-Oct building up our 'unexpected expenses' savings account and then unexpectedly blew through it and $400 more in Nov-Jan with dental work for me, new glasses for DS1, the heat pump motor burning out and DHs car stalling while in reverse. But if we hadn't had the account it would have been much much worse.

I calculate a set amount of money to spend every month. I don't break it down by clothes, food, entertainment, etc. It's just one lump sum for all of it because I can't keep track of those little details. I take it out in cash over the course of the month in $200 increments, plus I allow for $100 a paycheck to remain in the bank for online stuff. My budget is broken down by the assorted bills I need to pay, the money that goes into various savings accounts, personal allowence to DH & I, gas money and then "spending money' which covers food, clothing, dinner out, games, etc.

mnm_y2 said:

when you guys talk about the bills and then having what's left over in cash --- are you working a month in advance? or how does that work? Like, is the money that you are bringing home in January going to be what you budget for February?

I have a list of bills and due dates and use the paydays to determine what needs to be paid by when. But as far as groceries, and gas, I don't have an actual set amount to spend.

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No. We have a set salary. We get paid twice a month. So, when we set up our budget, we know what our monthly income is. So, we put it on paper. We subtract our mortgage and utilities. Then we know what we are working with for savings, groceries and gas. Then we set that budget. We divide all the numbers by two, so we know how how much comes out of each check. We deposit in our checking account each pay period the amount of our auto debits (mortage, utilities, cable) and then the rest we get in cash. We put the cash in an envelope marked groceries, gas, fun $. And that is what we use. I personally take my fun money and put in a separate checking account from our house hold bills so I can use a debit card for online shopping, like SSD.

I hope that makes sense! It takes some time to get use to but I am so glad that we did it. We are really seeing some amazing progress in reducing our debt. My next thing to tackle is learning how to play with coupons ( I use them but I know I am not getting max potential out of them!). I hear all these great stories about how people getting $150 worth of groceries for like $20! That would be AWESOME! Haven't figured it out yet. :huh:

I couldn't stick to a budget if my life depended on it...

My DH is METICULOUS about it though - he watches and categorizes every penny spent. the BEST THING ever for us was when I switched to digital scrapbooking. I used to go to scrapbook stores and drop $50, sometimes multiple trips per month!

So when I switched to digital, I set up my purchases to come out of paypal. We've sold a few things on e-bay that have put money in the account, and so now most of my purchases don't hit the official budget. It's kind of my "play" money.

For the first time in about a year, I saw that my last SSD Saturday purchase actually hit our creidt card :thumbdown:. Means my paypal is out. I plan on asking DH to put my allowance back into Paypal so every purchase I make isn't scrutinized

taracotta7 said:

No. We have a set salary. We get paid twice a month. So, when we set up our budget, we know what our monthly income is. So, we put it on paper. We subtract our mortgage and utilities. Then we know what we are working with for savings, groceries and gas. Then we set that budget. We divide all the numbers by two, so we know how how much comes out of each check. We deposit in our checking account each pay period the amount of our auto debits (mortage, utilities, cable) and then the rest we get in cash. We put the cash in an envelope marked groceries, gas, fun $. And that is what we use. I personally take my fun money and put in a separate checking account from our house hold bills so I can use a debit card for online shopping, like SSD.

I hope that makes sense! It takes some time to get use to but I am so glad that we did it. We are really seeing some amazing progress in reducing our debt. My next thing to tackle is learning how to play with coupons ( I use them but I know I am not getting max potential out of them!). I hear all these great stories about how people getting $150 worth of groceries for like $20! That would be AWESOME! Haven't figured it out yet. :huh:

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I guess the part that doesn't make sense to me is for example, if you had a payment due on the 15th for say --- a car payment. But your 2nd paycheck for that month doesn't come until the 19th. then technically, you couldn't use that check for the payment. It would've had to all come out from the first check for the month.

That's where I get confused! Right now, I think I'm working backwards, and not how I should be budgeting I guess. For example, for February, most everything is paid for already with this past week's check. Once I get the first paycheck of February, i would pay the remaining items. But I think if I were working one month ahead... using this month's income for next month, then it would work out way better?

mnm_y2 said:

I guess the part that doesn't make sense to me is for example, if you had a payment due on the 15th for say --- a car payment. But your 2nd paycheck for that month doesn't come until the 19th. then technically, you couldn't use that check for the payment. It would've had to all come out from the first check for the month.

That's where I get confused! Right now, I think I'm working backwards, and not how I should be budgeting I guess. For example, for February, most everything is paid for already with this past week's check. Once I get the first paycheck of February, i would pay the remaining items. But I think if I were working one month ahead... using this month's income for next month, then it would work out way better?

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When we started this, we had a little cushion in the account for just this reason. So then we could budget for the whole month and then work down from there. You can still work it the way you are doing it. You just need to make sure that you "tell each penny where to go" so there is not accidental over spending.

I strongly recommend Dave Ramsey's program. It was a life changer for us!

Claudia, that's how I do things. But, it's clearly not "right" cuz I'm the worst budgeter EVER. Before Christmas, I finally gave in and we consolidated everything into 1 joint account. I'm far better with purchases when I know I have to justify them to Jordan, lol! We have no credit card debt right now, just 1 car payment, our mortgage, and my student loan. We're working hard to pay off my student loan right now, as Jordan really hates debt of any kind. It's a new way of doing things for me, but I'm working on it. We have his car loan, and he pays extra on it each month to pay it down faster. We're thinking of getting another car this year (buying my dad's car off him instead of getting another new one - but it's still another loan to deal with). I would rather not, but our second car is on it's last legs. We'll see.

Anyway, we don't have a set budget and we both just buy what we want. So it would take a good bit of work for us to get together and deal with a solid budget, lol.

mnm_y2 said:

That's where I get confused! Right now, I think I'm working backwards, and not how I should be budgeting I guess. For example, for February, most everything is paid for already with this past week's check. Once I get the first paycheck of February, i would pay the remaining items. But I think if I were working one month ahead... using this month's income for next month, then it would work out way better?

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You are most definitely on the right track in thinking it would be easier to budget using the previous month's income. This is what we've always done but we're lucky in that my DH is salaried and paid once a month at the end of the month so it was a natural way for us to do it. But it's definitely much much easier to budget when you know ahead of time how much you have to work with.

I don't know if you saw the thread about Budgeting Software, but in that thread I linked to some software I use called You Need A Budget. It's actually more than just a program, it's an entire budgeting philosophy based on four key rules. Rule 1 is exactly what you're talking about - they call it a "buffer" but it's basically saving up so that you're no longer living paycheck to paycheck but instead you are living on the previous month's income. I'm a fan of the software, but you could easily apply the rules using an Excel spreadsheet. That's what we've done for the last four years before I found out about YNAB.

We work with the current month's income. The first paycheck has the mortgage & auto insurance come out of it. The second check has the utilities & car payment come from it. Since the bills are larger for the first check, the savings money comes from the second check to balance it out and leave me with the same amount of spending money from both checks. But I have to be careful. The first paycheck is 99% budgeted with maybe a $20 cushion and if DH has to buy something for work in that 2 week period it can send us over budget depending on when he gets reimbursed. I have about $150 as a cushion from the second check that I try to leave in the account to balance the first of the following month.

We were majorly messed up this month with him getting paid after 2pm on a Friday of a holiday weekend for both paychecks. That meant 4 days before the money hit the account.

We actually have the savings to get a month up & be living on the previous month's money but we learned early on that it just isn't good for us to have easy access to that amount of money. We work best with the least amount possible on hand. It's better for us to pretend to be paycheck to paycheck. Otherwise we go out and buy expensive electronics.

This is a great thread!!! DH and I are trying to get all of our CC's paid off within the next 6-8 months and then start working on paying off his truck and putting extra onto our mortgage. We want to be completely debt free in the next 10 years if possible, which includes our outrageously expensive mortgage (we live in California and bought at the WRONG time...). After all, we have 2 kids to put through college. Thank goodness my mom started buying them Savings Bonds for every holiday (Valentine's Day, Easter, Halloween and Christmas) when they were born. And I found out on top of the ones she has given us to hold onto she has been trying to buy each grandchild an additional $50 Savings Bond every month. My oldest has about $7,000 in bonds right now and he's only 7. :thumbup:

I love living on a budget! We basically put down on a spreadsheet how much we make a month, our regular bills, and then budgeted out the rest (after putting some in savings, of course). We keep track of all of our "accounts" on our spreadsheet, so we can save up money in our furniture account to buy new furniture. Our goal is to never have to go in the red on our spreadsheet, so we have had to do some adjusting. Starting out is really hard because you have to buy something (like snow tires), and then your account goes into the red. We made sure to have a fairly large buffer amount in our checking when we started our budget and then when we do make the big necessary expenses (we moved from AZ to NH, so snow tires were a MUST), we can just zero out the account then, instead of it being in the red. After about 6 months we've pretty much got our budget tweaked so that it works for us. I've found that the trick is to just stay on top of putting receipts in, and once you get in the habit it's really easy and you are so much more aware of where the money is going. Just make sure you have a buffer to start with, and tweak the budget so that it fits you. I think Dave Ramsey suggests a $1000 savings so that you have CASH to fall back on, and can get out of debt sooner.