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Budgeting 

nlrx2
Posts: 7

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2/28/2018
nlrx2
Posts: 7
We use Mint and for the most part pay everything with Credit Cards (and then pay the cards off monthly!!). This way Mint will be able to categorize all of our spending. There may be some updating at first but after a few months all the categorizing will be automatic. At the end of the year we look at what our average spending is per month and adjust budgets as need. We had about 2-3 years where we were extremely strict, and need to be to help get into the black. If our eating out budget was over we would eat rammen for a week to make sure we were under on our grocery budget. And we had a catagory for everthing ( Coffee, alcohol, tolls, entertainment). Over the past few years we have combined some budgets into more of a broad range (Food, Transportation).
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HerEveryCentCounts
Posts: 2

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1/9/2018
I use Mint and it makes it so easy to budget. I am not always exactly on point, but it keeps me on the right path when I'm going over. Love Mint.com.
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azphx1972
Posts: 44

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1/2/2018
azphx1972
Posts: 44
I agree, JC. I track all my spending since I like to see where all my money goes, but it really isn't necessary since I pay myself first via automated savings/investing. And like you said, after 20 years I'm pretty aware of what's happening with my money.
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JC
Posts: 48

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1/2/2018
JC
Posts: 48
1. Let my smart wife do it

2. Pay myself first, spend the rest.

Seriously though, we used to keep track of every little thing. We, meaning, mainly my wife. She still keeps track of our budget, but we no longer worry so much about the smaller items as we used to. We've been frugal for over 20 years. So, we don't really think about what we spend so much anymore since frugality is still our habit. It's only when the bills come out to be larger than usual (our monthly budget is about $4500) that we make an effort to curb the next month's budget. And, usually the culprit is eating out too many times, which is pretty easily fixed the next month by inviting friends over our house or going over their houses.

All of our friends are married, and so are most of my cousins, etc. So, very few surprise weddings. Very few surprise expenses, period.
So, budgeting for us really just comes down to keeping our 20 year spending habits the same. We find we're automatically within our budget the vast majority of the times. Maybe, once or twice a year my wife will tell me that we need to go out less next month.

Sounds like you've already developed the good habits. So, I'd say there's no need to worry too much about it. Keep track for the fun of it, not because you need tosmile
edited by JC on 1/2/2018
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fifty50
Posts: 3

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12/29/2017
fifty50
Posts: 3
For about 4 years I tracked our (myself and my spouse) budget month-by-month very closely. I tracked by general categories and had a "spill-over" line item to catch anything that went over that month - i.e. meals and birthday gifts for months that have a lot of family and friend birthdays. It worked very well, and I adjusted the target monthly at the beginning to get to a realistic goal for each category.

For about the last year, my job change means that I have much less discretionary TIME to do this tracking. So now, I have in my head our fixed expenses (cars/mortgage/insurances/student loan/general food budget) and what our typical credit card bill is (we put everything on the card for points and I pay it off every month). I was curious to see if it would set us back, and it has not. Our NW hasn't gone up significantly this past year, but that is because of lost income in my job change and selling/buying property. Overall, I'm VERY happy that we were able to maintain.

And I have no wish to go back to a monthly tracked personal budget. If I see one month that we fall behind or I have cash flow issues, then I mention it to my spouse and we spend less immediately.
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licid9
Posts: 45

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12/7/2017
licid9
Posts: 45
We keep a loose budget and track spending via an online tool (Mint, etc).


However, we actually operate very similar to the methodology you mention (spend less than we make, gauge progress by networth - which does include investment growth and loss, and review (discretionary) spending through a broader picture than "monthly"). We have a goal to get our net worth to X each year and sometimes adjust our spending based on that goal more so than "a budget" since we spend less than we make.
With that said, all our transactions are tracked and categorized and I use the data to build the framework for our annual expenses and identify specific areas of lifestyle creep. I know how much it costs for us to live annually and use this to determine if we are on track. I'll review this regularly throughout the year, but it isn't necessary restricted to a monthly timeframe.
Like FatStacks mentioned; we set saving goals; such as save X for property taxes or save Y for vacations and allocate those funds to different "buckets" (ie: multiple accounts at an internet bank). I try to make sure those accounts get funded well in advance of the event date for payment. It just helps me keep track and ensures that future spending funds are allocated appropriately.
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getagrip
Posts: 29

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12/5/2017
getagrip
Posts: 29
For what it is worth many years ago I had a detailed budget for about 3-4 months. I kept track of literally everything by either collecting receipts or writing a note and dropping it in a big empty pretzel jug and adding it all up at the end of the month. It was...illuminating. It showed me that yes, indeed, as I suspected in my scrooge-like heart my spouse spent a lot of money on all sorts of stuff that had been "hidden" to me because I didn't notice them or see them or they were great "deals" or they were little things for the kids. Kudo's to her for her honesty. I also noticed I'm no saint, and I had my own lesser, but still unaccounted for or overlooked money drains I hadn't thought about as being a problem. So keeping the highly detailed budget for a few months showed me where the boat was leaking and that when you have dozens of daily small leaks they add quicker than you would think and in fact can make a significant difference (death by a thousand cuts as an idea comes to mind).
As one example I hadn't been considering my vending machine habit a problem. When I needed a break at work I would tend to stroll down the hall to the vending machine and pick up a soda. I had in my mind that it was once or twice a day, at $1 a pop at the time, for like $5-7 a week. Turns out the reality was actually two to three times a day, sometimes with the addition of a snack for under a $1, and when they raised the price to $1.25 a pop I'm suddenly spending $15-20 a week. It was that type of "mindless" spending without consideration because it was "small stuff" that was killing us. We took some steps (e.g. buying soda and snacks in bulk and bringing it to work versus feeding the machine) and things got better and it allowed us to increase our savings to compensate, which was a plus.
That said keeping such a detailed budget became a drag and by the fourth month the spouse wasn't really participating any more and frankly trying to game the system (e.g. holding off admitting to spending something so she wouldn't "go over budget" that month). So to support marital harmony I went for a more general "category" type budget figuring if we stayed in those bigger swim lanes and could maintain our savings rates all would be well. My focus has been on overall spending and trying to meet saving goals. In general that has worked for us, even as life comes along and slaps us here and there.
So my advice is simple. I'd recommend going ahead and keeping a detailed budget for at least one quarter (3 months) just to show you where you are spending your money and perhaps repeat doing that now and then as you feel it's necessary. You may find nothing is a big issue or you may find there are areas you can't believe you spend that much on and then make reasonable changes. I think where money isn't "tight", as is your apparent case, then as long as you are meeting your combined goals there is no need to nail down the budget to extreme detail and something like the broad percentages (e.g. 50/30/20 on bills/goals/discretionary) are fine. However, some folks get a charge out of keeping such details and it inspires them to consider things like early retirement and charging harder to become financially independent. Best of luck whichever way you go.
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FatStacks
Posts: 28

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12/4/2017
FatStacks
Posts: 28
girlnextdoor wrote:
So I'm curious - 1. What is your advice re: budgeting, and 2. What do you personally do when it comes to budgeting?



By no means do I consider myself to be in a (financial) position to give advice. With that said, I've had (more or less) the same budget in Excel for almost 15 years. I used it for myself for "my money" (pre-marriage), and still use it now that it's "our money". When we stick to the budget, it works great.

(numbers are rounded so they don't add up exactly. Also, I don't list my loan amounts because those are used in security questionnaires when applying for new credit)
$7,250 monthly income (after-tax salary + rental income)
-$xxxx Primary Mortgage
-$100 Internet/Netflix/Hulu
-$275 Primary Utilities (Gas/Electric/Water/Sewer/Garbage)
-$xxxx Rental Mortgage
-$125 Rental Rental Utilities & Homeowners association
-$350 Student loans
-$200 529 college savings
-$xxx Car loan
-$125 Insurance for cars & boat
-$50 Car stuff (tolls, oil change, car wash, tires, service, etc.)
-$xxx Boat loan
-$75 Boat storage & maintenance
-$75 Pets (food, grooming, medical)
-$125 Kid stuff (lunch, field trips, activities
-$175 Cellular (2 lines)
-$100 Christmas saving
-$100 Vacation saving
-$50 Gym membership
-$50 Primary Home alarm system
-$25 Subscriptions (Amazon Prime/Office365/Magazines/etc)
-$300 Myself: (I usually pay for automotive fuel, and buy lunch at work)
-$1,300 Spouse: (pays for all groceries, "going out" activities, birthday/wedding gifts, vacation/hotels/etc.)
-$550 Leftover to <pay credit cards/splurge>

For things like "Christmas saving" or "Car stuff", I just dump the money into my checking account, and keep track (in Quicken) of how much is allocated for each bucket. Then, when it comes time to go Christmas shopping, I already have $1200 in there ready to roll. When I need to buy tires, (hopefully) I have enough in the "Car stuff" bucket to cover that cost.

It takes a lot of stress out of life.
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girlnextdoor
Posts: 31

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12/4/2017
girlnextdoor
Posts: 31
I read The Millionaire Next Door about a decade ago, but just started re-reading it in the past few weeks.

One thing mentioned in the book is that most millionaires keep a strict budget.

I know what I spend on big categories (rent, utilities, transportation, etc.) but I typically don't keep a budget for smaller expenses (clothing, gifts, etc.). My husband and I - just married in October - spend well below our means and are debt free, so neither of us have really had reason to carefully track what we spend. Since I update my net worth each month, if I see it's flat a few months in a row, I start watching my discretionary spending a little more closely for a few months. Other than that, I don't worry about spending.

However, since we are newly married, and since I'm re-reading the book, and I'm thinking about 2018 goals, it seems like as good of a time as any to start keeping a budget of some sort - or at least to review our 2017 spending and determine what we spent, by category, and if we're happy with those numbers.

So I'm curious - 1. What is your advice re: budgeting, and 2. What do you personally do when it comes to budgeting?
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