If you have a budget tell me about it

[hillview]

If you run the household on a monthly managed budget:
1) how do you do this (what tool do you use)?
2) how do you account for big purchases (save a little each month? Time it to an event (tax refund)? Other?)
3) any tips for getting started

Background, I’ve been using Mint for the last few months to get a sense of where the money is going. Now that i have a handle on that I want to start to do more proactive day to day budgeting. At some point I’d like to not do this (we spent 20 years without a budget) but for right now I need to be doing better.

I’ve been playing with YNAB but I can’t seem to fall in love with the fact that I set a budget for say groceries, and I pull in my credit card bill I have to manually true each spend item up — there has to be an easier way. I DO like the envelope system it has. Mint seems so passive for budgeting. Any suggestions?

Thanks!

[okinawama]

I'll be watching this too. If anyone has a formula for spending, I'd love that too (ie: this percentage of your income should go towards your mortgage, this percentage of your income should go towards entertainment). We've taken the time to track where our money is going, but I'm not sure what a reasonable amount should be for each budget line item. Particularly fun money that we use on hobbies, travel, and other non essential items.

[KrisM]

I use Excel. I have a column for each pay check and rows for spending categories. I have some bills coming from each check and by now I can estimate what they all are each month, even those that vary with weather. I have a second savings account and I have sub categories in it - one is "escrow" and once a month I move money for insurances, property taxes, etc into it. These are bills that are 1-2 times a year. When they come up, I move the money to checking and pay it. Other sub categories are home improvement and car replacement/repair. For these I move a set amount each month and if we spend from it, I take it out. We have additional categories for vacation, gifts, etc. Those aren't always regular deposits, but I do try to keep up with them.

I buy groceries with a gift card that I load twice a month. I use it because it's Scrip fundraising. Before I did that, I used cash. Groceries was the place that I most easily overspent, so cash worked well.

DH has an expensive hobby, so we came up with how much he gets to spend a year on it and I move that to his own category. He then doesn't feel bad spending money on those items.

For "fun money", we each have about $200 cash each month. It goes to lunches out, activities, etc. I spend more than DH because I spend on the kids as well.

I find Excel works for me because it's easy and I can make it do what I want it to do. I put in our investments into it, goals, etc. It's not fancy, but it's functional.

[TwinFoxes]

We used Excel as well when I first took over doing the bills from DH. This was a few years ago, and now I can pretty much do it in my head so I don't use it anymore. I had a line for everything, spending money for DH, spending money for me, savings, 529s, plus all the bills. It was interesting to see how much we should have left over, vs how much we actually had left over.

[KrisM]

We used Excel as well when I first took over doing the bills from DH. This was a few years ago, and now I can pretty much do it in my head so I don't use it anymore. I had a line for everything, spending money for DH, spending money for me, savings, 529s, plus all the bills. It was interesting to see how much we should have left over, vs how much we actually had left over.

That reminds me - I had a lot more details years ago. I had many small categories but now just a few because we can just do it in our heads as well. I keep it going more for the balances than anything else. We're saving to upgrade carpets and kitchen counter, so I can see what is for that vs what is for the next vehicle.

[DualvansMommy]

I’m like you, OP. We use mint to mainly stay on top for a quick glance as our fixed expenses hadn’t really changed much over the years.

It was the unexpected little things that kept tripping us up. We always have had an account with auto transfers that’s vacation fund. We started another sub account for household/car repairs, in that we put in 150 every paycheck automatically based on amount in last years we’ve spend on unexpected repairs for appliances and cars. So far, that’s been working for us quite well as we just needed to know the general amount to put away every payday.

But as far Day to Day budget? I use mint as that’s the best program that works for us out of all other apps. I don’t love the fact how passive it is too though.


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[ezcc]

I use YNAB and I really, really like it. It does take time to enter expenses- I usually just do it on my phone as soon as I make the purchase and then review it to make sure I didn't miss any when I get my statements. I have goals set up for vacation, property taxes, new iphone etc and it lets me know if I am on track- I throw a little into each of those pots at the beginning of the month. I used mint for a while, but like you said it only showed me what I spent money on. With YNAB if I go over on groceries, I have to cover it with something else- it really helps keep me accountable. I also feel more in control of discretionary spending like restaurants, clothes- I know how much I want to spend on those instead of feeling vaguely guilty every time I bought something for myself of went out to eat.

[niccig]

We need to do this too.
Years ago when I was in charge of bill paying, I worked out how much needed to be taken out of each pay for things like car insurance, life insurance etc so when those bills came due, the money was already there in savings. I had an excel spreadsheet so I knew how much in savings couldn't be spent. I've always wanted to have separate accounts and have money transferred, but couldn't get DH onboard. Then he took on bill paying and it all stopped. I'd like to start up again with an amount taken out each month for those kinds of bills, another amount for car (repair, replacement), and another amount for house repairs. My pay gets put into a different account from DH's so it may be easier for us to use my pay for those things. I gotta figure something out.

[specialp]

We have a comfortable budget, I’ve had a budget since college and newlywed when times were very lean, and as a result, have a good handle on expenses. So it is easier now for me to take care of savings first, pay bills (2x/month) and then know the remainder is what I can spend without itemizing every expense into grocery, gas, clothing, etc. I pay my credit card off 2 x per month so each pay period/billing cycle starts with a zero balance on my card, I charge everything to earn cash back, and I know what amount I cannot go over for that 2.5 week period. It will include things that are autopay (netflix and gym membership), gas, clothing, groceries, small house purchases, etc. It’s 2.5 weeks, the app is on my phone and I can check it before I go to the store, etc., so it's a very easy time period for me to keep up and again, savings has been taken care of. On periods where auto insurance or HOA is due, the amount I can spend will be less so no clothes or home shopping that period, but my discretionary spending is enough to cover those plus the needed groceries and gas.

I have a paper sheet with my bills divided into two columns. I pay them (do keep up with in checking account program) where it is best to pay to make it more even so I pay my lawn service before they actually service that month, for example. The savings I take care of first every pay period: savings, mutual fund account, my retirement (I’m a SAHM) and 529. I do have a set amount that goes into mutual fund account which would cover disability, life, and property,+ 1% of house value divided by 24 pay periods. All of those are due in Oct - Dec so theoretically I would save that up all year and pay from there. Reality is I just take it from savings. We have for years had our pay directly deposited into savings and then transfer over our budget amount 2x/month. Over the years as there have been pay increases, I’ve tried to keep the budget the same or close so that extra just stays in savings.

“Big” purchases depends on what you mean, but I never count on bonuses or tax refunds. We’ve never not gotten them, but I do not count on them. For a new phone, I just spend less for a month or two until I have it to buy. For much larger purchases, make it a goal and save up specifically for it.

[abh5e8]

I really like ynab we have used it for many years. It is a pain to enter every purchase, but it's also excellent accountability. I like being able to check and see how much I have left in any given category in any given day off the month. I also find it's easy to adjust this monthly budget as things change. We use a buffer within YNAB, so the income from say Jan gets categorized as money to budget/spend in Feb. We only have 1 checking account, v but we have a lot of categories, including at least half a dozen savings goals, (Christmas, gifts, house repair, car repair, car in insurance, propane) where we put it in $ each month and then when we need it it's there.

ETA: I've never found a recommendation to spend x% on this and y% on that to be helpful. I think you need to decide what your goals are (vacation, college, cars, v weddings, retirement) and then figure out how much you need to save.

[hillview]

I use YNAB and I really, really like it. It does take time to enter expenses- I usually just do it on my phone as soon as I make the purchase and then review it to make sure I didn't miss any when I get my statements. I have goals set up for vacation, property taxes, new iphone etc and it lets me know if I am on track- I throw a little into each of those pots at the beginning of the month. I used mint for a while, but like you said it only showed me what I spent money on. With YNAB if I go over on groceries, I have to cover it with something else- it really helps keep me accountable. I also feel more in control of discretionary spending like restaurants, clothes- I know how much I want to spend on those instead of feeling vaguely guilty every time I bought something for myself of went out to eat.


I really like ynab we have used it for many years. It is a pain to enter every purchase, but it's also excellent accountability. I like being able to check and see how much I have left in any given category in any given day off the month. I also find it's easy to adjust this monthly budget as things change. We use a buffer within YNAB, so the income from say Jan gets categorized as money to budget/spend in Feb. We only have 1 checking account, v but we have a lot of categories, including at least half a dozen savings goals, (Christmas, gifts, house repair, car repair, car in insurance, propane) where we put it in $ each month and then when we need it it's there.

ETA: I've never found a recommendation to spend x% on this and y% on that to be helpful. I think you need to decide what your goals are (vacation, college, cars, v weddings, retirement) and then figure out how much you need to save.
Thank you both. Really appreciating ynab - it does take some getting used to but I think it’s a game changer for me

[Percycat]

how is ynab different from quicken?

[hillview]

YNAB is a whole different way of looking at your money -- giving every dollar a job. It does not pay bills or track investments (Quicken can do this). YNAB makes you take stock of where your money is going and evaluate if it is going to your actual priorities. I don't use Quicken so this is what I've picked up not personal experience. I have used Mint which I do appreciate but it is more where my money WENT not where I want it to go (if that makes sense).

[AustenFan]

For #1, we used an excel spreadsheet in our early years (basically with the envelope system) but now just use mint and are in the habit of sticking to those amounts so we don't have to check in daily, kwim?

I agree that saying X% goes here and Y% goes there really does depend by location and family priorities. (I like to cook from scratch, and we don't buy organic, so our food budget is low, but we definitely spend more annually on travel than food because getting six people across the country to visit grandparents in two different states twice a year is $$$$!!)

We do budget in those big ticket items (a category for gifts and one for short-term savings for things like a new fridge) and contribute to them every month, so we're never scrambling for money for Christmas presents because it's been in the budget all year. As far as tax rebates and work bonuses go, we've occasionally used them to buy a big ticket item (like my first DSLR) but usually dump it into paying down debt (we've never carried credit card debt but did have law school loans we paid off early and now our mortgage). We're at a place financially where we can do small-scale impulse buys--almost entirely books--but when my KitchenAid mixer broke a few years back, I definitely had to save up for 8 months to replace it (and asked our parents to contribute to my mixer fund instead of buying me presents that Christmas!) because we'd had to buy some other big ticket item like a fridge before that and had just cleaned out that category in the budget. I actually think that saving up a little at a time is not a bad thing, in moderation. When we lost a car in an accident, we lived with one car for seven or eight months, and actually got so used to it that after buying a new car and having two for 6 months, we realized it was unnecessary and just sold the old one so we're back to one! I am not a minimalist by any means, but I've found that making do while saving up for a bigger purchase often reveals to me how much I actually need the thing.

We also have separate sub-accounts set up for the kids' college funds (and I'm talking $25/month--nothing big! DH is a professor, so we're mostly planning to utilize the free tuition exchange in which his institution participates), new car, car repairs, etc.

It really does help that DH and I sit down at the beginning of every year and hash things out, so we're totally on the same page about spending and saving. He tends to be more of a spender, and I'm very debt-averse and would rather pinch pennies, so we meet in the middle with what's reasonable for us. I think that's my biggest piece of advice--get everyone in the household who spends money on board with your plan. We even talk about kid activity expenses with DS now, just so he understands where the money is coming from and why we often have to say no to things. It really cuts down on bad attitudes and whining when kids realize that we're not just spending (or not spending!) money arbitrarily. My parents were really open with us about their finances and their budget as we got into our teens, and my brothers and I are all really responsible with our money today.

Good luck!