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tuyop posted:Whatever works man, but the manual entry is an explicit part of their method. That's all we're saying. As for keeping close to your transactions, I see it as mostly the difference between a knife fight (manual entry of every transaction), a rifle (frequent manual download and ingest of QFX records) and a Drone strike from Nellis AFB (Mint's default ex post facto recording and categorization). That said, I'm moving to the YNAB thread for topicality and because Phantom of the Copier is kind of a terrible OP who likes (IMHO) to browbeat (also IMHO) people who disagree with him and/or his methods. The rest of you? Thanks for all the help and awesome discussion!
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Feb 12, 2014 19:45
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It seems like people are waiting on me  ...Quite the interesting contrast of posts in the last page. It seems our choice is either that this thread is superfluous and needs to be closed, or provides for some discussion beyond what can presently be offered elsewhere where it might not quite fit or otherwise be ignored. There are fewer actual, quantifiable budgets discussed here than in the personal finance thread, and they do not seem to "send budget questions to the budget thread". This thread predates the YNAB thread, but it does seem reasonable to send some of the more technical YNAB questions that arise in that direction; I have to agree those posts get a bit boring. On the other hand, this thread is probably greater than 80% YNAB talk, no doubt because my terrible form of totalitarianism has driven the masses to discuss pretty much nothing but the thing that I utterly loathe above all else.  Perhaps that is because I feel that we can here discuss budgeting methodologies, and, yes, that includes YNAB. More specifically, though, I don't feel that we need to be a YNAB blog/course/website echo chamber, when those technical questions aren't really pertinent to the conversation, and when those YNAB users would be better served going to the new YNAB thread.But to adopt the language that is being attributed to me, that I (IMHO) don't believe I have in fact ever used, if we're here to discuss budgeting, then you'd better loving believe that I'm going to argue about budgeting. Anecdotes are cute, and might serve to start a conversation on a methodology, and I'd love to see more budgets here for the sake of conversation and comparison, and so we can discuss techniques for data collection and reporting, but it seems the only thing this thread has left to offer beyond the others is to be the resource to help people with their budgeting methodologies and to be able to discuss all such methodologies. I find it absolutely loving infuriating when people collect absolutely zero data from a friendly goon that shows up for help, and instead sycophants over some YNAB party line. We could just as easily ask some basic questions to try to find a methodology that might best work with each goon's past successes and failures, their technical limitations, and their current goals and plans. I've recommended this in the past, but I'm not sure that there's much of any worry that this thread will be overrun with any of my thoughts on the matter, if the previous dozen pages are any indication. To reply specifically to Kenny Rogers, I can only offer my sympathies that being in the absolutist dogmatic group in this thread hasn't been more pleasant for you. You have given some useful feedback to YNAB users here, but it sounds like you'll be able to better concentrate your efforts and goals to assist in the YNAB thread. In all honesty, some of your posts here, like the most recent one, have fueled my YNAB hate, if only because you help demonstrate that YNAB users can't even agree on the interpretation of their philosophy, despite all the intrinsic advertisements that "it must be done this way". Regarding my likes and dislikes, I'd have to ask, Do you know what my methods are? Or is the issue actually that I frequently reply with cautions, concerns, and disagreements with pieces of other methods? Where do we go from here? Well, there still seems to be some interest in discussing budgeting techniques and methods. History shows that I've placed no restrictions on suggestions offered, and there are no restrictions laid out in the OP, though it does seem time to add a link to the YNAB thread for specific, technical questions. Personally, I'd love to see some contrasting of methods, but that requires people to have used more than one method and acknowledge that what they're using now might be successful (only?) because other things in their life have changed too --- things like living on your own, actually having money, having a family, having to pay taxes, etc., have an interesting effect on a person's ability to organize... sometimes. For myself, I'm willing to describe my reservations and loathings of any methodology. Just as I'll flat out tell you why I think "Rolling with the punches" is about the worst thing ever, I'll be happy to tell you why and when envelopes and jars fail. In January, I started thinking about preparing some topics of conversation so we could develop better guidance for newbies (questions like "How do I start dividing up this money?", thoughts on "more versus fewer categories", "Do I include 401k/retirement in my reports or not?", "How to handle long term goals?", and so forth), because it seems like we could build up a good collection of material there. Of course, I can talk to myself without posting a single thing, so if there's no interest in such discussions of "How to create a budget" and what that all means, then I can just throw up a few Fotoshoppied amusements a la Godwin's Law, direct newbs to Personal Finance and YNAB, and suicide this baby because we get gassed. And, yes, my average post length is more than a paragraph. There... Was it everything you hoped?
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Feb 15, 2014 18:04
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PhantomOfTheCopier posted:For myself, I'm willing to describe my reservations and loathings of any methodology. Just as I'll flat out tell you why I think "Rolling with the punches" is about the worst thing ever, I'll be happy to tell you why and when envelopes and jars fail. In January, I started thinking about preparing some topics of conversation so we could develop better guidance for newbies (questions like "How do I start dividing up this money?", thoughts on "more versus fewer categories", "Do I include 401k/retirement in my reports or not?", "How to handle long term goals?", and so forth), because it seems like we could build up a good collection of material there. I personally think that this would genuinely be a great direction for this thread to go. Although I've only been browsing BFC for a short while, and am also guilty about posting massive amounts of text about YNAB, a more general "budgeting concepts" resource would be really useful, and kind of what I was expecting when I first saw this thread anyway. As for the bolded bit, I am also seriously interested in hearing your views. I know you've expressed a lot of dissatisfaction with the rolling with punches concept, but I don't remember if you have gone in exact detail why (if you have, please correct me). Ditto for hearing about the downfalls of the envelope budgeting method. Even though I am a big fan of YNAB I like to keep an open mind and learn about new and different concepts, even if I don't necessarily agree with them, or find them that useful for myself. Therefore I think this would be a good direction to go, rather than just having people go back and forth arguing between different software (and again, I'm well aware of the hypocrisy in saying that..) e: of course, this also depends on you being happy to take the time and effort to get things started, and hopefully get other people to contribute as well. As for myself, I find personal finance really interesting to discuss, and would also be happy to contribute to the discussion, although I still consider my knowledge and experience to be a bit limited.. londonmoose fucked around with this message at 18:27 on Feb 15, 2014 |
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Feb 15, 2014 18:23
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So what's the difference between the envelope method and a percentage-based method (if that is your preferred methodology). I don't think anyone budgets without considering percentages. Like, 20% savings, 50% bills, 30% discretionary. But then those categories get split into envelopes based on actual dollars rather than percentages, at which point you can shuffle money around within envelopes a la "rolling with the punches". I guess I see the envelope method as derivative of the percentage method. Is it not? Here, tuyop data: All values are CAD monthly. Take-home Income: 6922.27 Rent + parking: 1685* Bills (Netflix, power, heating, phones): 289.09 Food (regular): 350 Food (meat from farmer - 500/year amortized): 41.67 Food (supplements): 50 Discretionary misc (paper towels, Tylenol, and poo poo): 74.46 Insurance (home): 26 Insurance (life): 12 Insurance (health/dental): 21.78 Auto fuel: 115 Auto insurance: 199.14 Auto Tire savings: 71.43 Auto Maintenance savings: 115 Fun money (incl amortized memberships and stuff): 400 Balance: 3551.70 * plan is to get a roommate but a loving recurring sewer problem has kept that from happening. We may have to move if it doesn't stop. I need to figure out, in the next week, how to balance the excess into: Full emergency fund Retirement savings Kids savings (to college or not to college) Vacation savings Friend weddings Gifts Charity Useless plastic noisemakers (e.g. A laptop) New car savings (will probably equal ~400/month) Bicycle savings Professional clothing fund
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Feb 15, 2014 18:55
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PhantomOfTheCopier posted:Need more information regarding your goals. Are you just trying to track expenses? With or without automatic updates from linked accounts? With or without: Budgeting capabilities, forecasting abilities, expense analysis for utility optimization, a mobile app, a dynamic user interface, charges to use or free for use model, a model supporting categories, sub-accounts, group auto-balancing, blardy blardy balr? I'm bogged down in substantial credit card debt and trying to find the best way out. I want something that provides everything you mention here and I'm willing to pay for it.
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Feb 15, 2014 19:49
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Thank you, londonmoose, for two thoughtful, most excellent posts. I'm not ignoring you, but I'll review my scowling writeup of, ahem, Rule Three, after I call up Winston Smith to give it a once over for actual content before I post it.  tuyop posted:So what's the difference between the envelope method and a percentage-based method To try to avoid writing a complete book (perhaps I should  ), I'll start with this and field questions:Allocation techniques
Most people use a relatively-solid Pareto approach to dividing their money, either when it is income or when planning expenses. Large bills, such as rent, food, fuel, insurance, tend to receive their allocations before other categories get their fair share. In contrast, a Bingo approach provides most things with a near-equal portion; this tends to be useful when saving for a number of mid-range purchases. The various techniques for allocation can be evaluated based on their features and failings. Consider, for example, the following concerns:
pre:Percentages Pareto Bingo Triage Income/Expense Income More I than E Either Expense Capital expense High-Low Medium High-Med Med-Low Emergencies Medium Med-Low Med-Low High-Low Planning period Long Medium Short Zero Categories Many-Few MedHi-Few Medium Medium-Few Preparation High Medium Medium-Low Zero Execution Zero High-Medium High Medium Adherence High Medium Low Zero The Bingo approach can be applied either when you receive money, or when you decide to spend a chunk of money. It could be useful for emergency situations, if you're willing to "pool your funds", but may otherwise prevent you from saving for emergencies, if you're always sending your money to repairs/toys/entertainment. Bingo works well for short term plans (Do I buy one replacement thing every two months or kinda save for all at once and do the whole shebang this summer?), though I've used it for capital expense planning that has been put on hold for several years, so it may be unfair to claim it's just "Short". Populating 50 categories with the Bingo method sure sounds like a pain, and it takes time to divide up the money because you have to rethink things each time. Nothing really forces you to follow a plan; you can fund something one cycle and not the next. How about Preparation? Triage by design requires no forethought, other than the cognitive dissonance required to think you'll be okay. Bingo requires you to prepare some categories for record-keeping. Pareto requires you to actually plan some requirements for those categories, namely the minimum monthly amounts. The percentage approach requires an allocation plan for all the categories the Pareto addressed, as well as some likely planning for additional savings, emergency funds, and so forth.In stark contrast to this, it takes no time to divide money by percentages (multiply; done), whereas a Pareto approach may require thinking during each pay period to "properly" allocate funds / plan expenses (Can I pay that bill yet, or do I have to wait? Roops, did I forget my renter's insurance?). Bingo necessitates playing the game every time you want to allocation, and Triage takes your time every time a bill arrives, and maybe more time if you find yourself entrapped. Book-keeping techniques
Most techniques of record-keeping are necessarily a categorization of a generally-single, large chunk of money. Very few people walk up to their Scrooge McDuck Silo and retrieve gold coins when a bill comes due, so we have a tendency to categorize to keep ourselves a bit organized. In this regard, most techniques here have categories, but they are separated by their ease of categorization, ease of use, and so forth. In particular, the goals and features of record-keeping might be:
Sadly, I have to go do other things for a while, so I'll stop here and let you read.
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Feb 15, 2014 21:34
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FWIW, PoC, I find your posts generally informed and helpful. While I think you have a sore spot for YNAB, I don't think you deserved the recent harsh criticism that seemed to come from nowhere. Your categorization is interesting. I think we do the Bingo approach, but we budget long-term savings first, as a percentage. And since we're not drowning in debt, it's easy to roll with punches. But you're right that discipline takes a bit of a back seat. I wonder how well a percentage approach works in a multi-family household? I think that approach might have the best environment for success when it's one person practicing the discipline. I feel things become a bit more difficult when a budget is being pulled on from multiple directions, and a combination of approaches may be warranted to ensure it doesn't collapse under the weight. Thoughts?
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Feb 15, 2014 22:49
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I actually just did a quick pareto analysis on this month's budget and indeed around 70% of my budget is taken up by 30% percent of my categories. Did the same on over a year's worth of expense data from my old gnucash accounts; exactly the same. Not a perfect 80-20, but still.. Guess I shouldn't be so surprised considering the prevalence of that concept, but I'd never actually thought about applying it to personal finances. Just to be clear on what you mean by the percentage method; is this when you take a look at your historical spending over a given period (I guess, ideally, a year or more), work out the percentage taken up of the total by each category, and then use that percentage to allocate where to budget your income going forward? I did try that once but was let mainly by my own unreliable data keeping (something which I am now better at). I guess taking the long view with percentages can definitely help with forecasting and can be a useful guidance even if you're using other, perhaps shorter term methods of budgeting? I do have a question about adapting to change in personal circumstances. Say that you budget 25% towards rent. However, you then lose your job, or have another form of long-term decrease in your income. Let's say that rent now takes up 40% of your income. Given rent is a reasonably fixed cost, and although you would be able to decrease it in the long term by moving somewhere cheaper (up to a point, and moving incurs its own costs as well), what do you do in the meantime? Adjust your budget to account for the increased proportion by decreasing other areas (e.g. discretionary expenses, or the emergency fund)? Or work towards changing your circumstances as quickly as possible so that you can still stick to your original budget as much as possible? Something else? If I've misunderstood the basic concept of a percentage allocation, and this is a silly question, feel free to tell me!
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Feb 15, 2014 23:48
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I use YNAB but I also agree with PoC that it gets trotted out as a cure-all in lieu of actual discussion and targeted advice on budgeting which implies that their methodology should also be recommended in general. I think all of the topics he pointed out make for a far more interesting thread than it has been in a long time. In addition, I haven't felt that he was being a dictator in how he ran the thread, he never disallowed it so much as disagreed with the posters who did advocate for it so often. As for the methods, interestingly, I use percentage allocation for Savings vs Expenses, then Pareto for how the Expenses get broken down. It makes the most sense to us because we make enough and our wants are small enough (in that I come from a poor rear end family) that we would never really live outside of means. Thus, the main goal becomes figuring out a percentage savings to allow us to retire early as well as live life to the fullest (including traveling across the continent for a month per year).
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Feb 16, 2014 00:03
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londonmoose posted:Just to be clear on what you mean by the percentage method; is this when you take a look at your historical spending... PhantomOfTheCopier posted:... You should be able to allocate a minimum amount of your income to expected, relatively fixed bills such as rent and phone, but also have a budget that permits bonus funds to be divided to your other wants. That extra spending that you'd like should also be given some minimum money, so as to allow you to reward yourself for a job well done, but also to reward yourself more when you do a better job. This approach does not require you to have any more (or less) historical and current knowledge than you'd use with any other successful budgeting technique, for your budget is only as successful as the data you use to create your plan. It certainly permits you to adjust as you go, say by reviewing and shifting some of your discretionary income across categories as time goes by, but it also stands somewhat at odds with my interpretation of the YNAB rule to "roll with the punches". With this technique, it's best to let a category go negative than it is to short-circuit savings goals by flopping money around. That's another wall of text; let me know if you have more thoughts or questions. quote:I do have a question about adapting to change in personal circumstances... Regarding minor changes in personal circumstances, however, it generally is a matter of using money more effectively. Typically I've only had to review my budgets when I get raises, so it 2010 I reviewed my budget twice. Even when I got a raise, I ran the same budget for two months before I bothered to review things because accounts can always be drifted back to their planned buffers over time. In fact, I just increased my 401k deduction last month (new job) and my net income changed by all of $10, so I didn't even bother changing my budget. But, what does an emergency look like? Here's 2011 November, versus December when I got laid off: pre:Desc Percent Unemployed Change Savings 13.95355 5.75561 -8.19794 Monthly Rent 26.79738 37.54579 10.74840 Food 15.66049 19.68864 4.02815 Student Loan 1 10.73423 13.45192 2.71769 Fuel 9.20062 3.50247 -5.69815 Auto Maintenance 4.16698 3.37454 -0.79244 Student Loan 2 3.46907 4.19231 0.72324 Phone 2.67975 3.70284 1.02309 Auto Insurance 2.37654 2.37179 -0.00475 Electric 2.30864 2.51832 0.20968 Health Savings 1.54994 0.41208 -1.13786 Movies 1.38889 -1.38889 General Living Exp 1.27920 0.91575 -0.36345 Bar supplies 1.20370 -1.20370 ISP 0.84235 1.14469 0.30234 Renters Insurance 0.66667 0.89670 0.23003 Entertainment 0.49383 0.18315 -0.31068 Tires 0.37960 -0.37960 Range fees 0.30864 -0.30864 Annual Memberships 0.24691 -0.24691 Auto Registration 0.17361 0.25183 0.07822 Laundry 0.06256 0.05952 -0.00304 Magazines 0.03466 -0.03466 CPL 0.02219 0.03205 0.00986  Budgeting a depletion means "I have more than X months saved up in this category, let's just budget at the 90% level and in ten months it will have dropped an entire month of savings".Sorry for the long post. Tables, you know.
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Feb 16, 2014 01:01
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for Internet service that only costs $60?" you ask? Because prices go up all the time but your earnings may be flat for a while. Having higher amounts saved for transportation, for example, let's you deal with an emergency trip where you might need to rent a car. When July comes and you're ready to move, you'll have saved some in the rent account for your new security deposit and some of the moving charges. When you buy those $2k speakers and your electricity bill goes up, you won't have to steal from something else to pay the extra $2.
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Argali posted:I'm bogged down in substantial credit card debt and trying to find the best way out. I want something that provides everything you mention here and I'm willing to pay for it. The basic techniques for digging out of debt are to ensure a stable income for planning purposes, and a reduction of frivolous expenses, or otherwise delaying expenses that can be reasonably held for later (the trade-off between getting by on "routine maintenance" and needing to buy new items). The usual starting steps are to provide your income and any related concerns, your base monthly expenses (necessities, minimum credit card payments, credit card interest rates and balances, other liabilities, discretionary expenses, and any imminent concerns), and a quick self evaluation about your financial situation (what have you tried, what has worked, what has failed, what do you see as the primary troubles, etcetera). With this information, others will be able to offer either general methods or very specific suggestions that may help your situation. From a generic point of view, having no numbers in front of me, your responsibilities will likely be: You must have cash on hand (which could be in your savings/checking account, of course) to pay your monthly bills on time. Avoiding putting regular bills on credit cards. Cut out as many unneeded expenses as possible until you get enough money in savings to pay your regular bills; don't forget those bills that come every six or twelve months, like insurance premiums*; likewise, you'll want to build up at least a minimal emergency buffer so you don't need to go back to credit cards for unplanned expenses. After paying minima on credit cards, put all available extra toward the highest interest rate card first, as this will reduce your lifetime repayment amount. The numbers greatly impact your ability to juggle things like retirement and health savings. In most cases, people earn enough to still hit the employer match and hold at least an HSA. Your ability to succeed (quickly) is heavily dependent on your willpower and personal manner of success. Frequent suggestions are cutting up your credit cards so you don't use them, or perhaps freezing them in a jar of water (so you can get them in an emergency), or only buying things with cash so you can use the envelope method, and so on. Also helpful is concentrating on one type of entertainment at a time, such as doing one exciting thing a week instead of the usual five things a day. Lots of goons in BFC can suggest "lifestyle changes" or, at the least, practical advice about how to continue to find entertainment despite making adjustments to live a debt free life. Please let us know when your open your BFC thread, or if you have specific questions about the above with which we might be able to help. * Why oh why do I want to write 'premia'?
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Feb 16, 2014 03:47
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PhantomOfTheCopier posted:It seems to me that, in most cases, any allocation technique can be coupled to any technique for book-keeping. Yeah that's what I meant by "derivative". I'll mull over the difference between allocation and book-keeping as they apply to our own finances for awhile, though. Because for some reason it's a bit  for me.
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Feb 16, 2014 04:52
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tuyop posted:Yeah that's what I meant by "derivative". I'll mull over the difference between allocation and book-keeping as they apply to our own finances for awhile, though. Because for some reason it's a bit You could take a representative collection of poker chips and throw them en masse at a group of labeled buckets, and then budget the resulting amount of money in YNAB. You could also come up with a three-year statistical analysis of market fluctuations to estimate your bills for the next year to high precision, and then tell your mother to scold you if you spend above the numbers you give her. One of these has an 'awful' method of allocation coupled with a comparably-advanced book-keeping solution; the other has a ridiculously-advanced allocation methodology coupled with what is likely to be a relatively limited record-keeping/enforcing approach. In almost all practical cases, to be successful at budgeting, a person needs a good way to plan and a good way to evaluate progress, but those can be highly-separated steps. p.s. Sorry for all the third person 'you' there. Not meaning to attack tuyop, of course, as I meant 'anyone'. Indeed, this is 'budgeting theory', so I'm hoping a few (silly) examples help to show the differences.
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Feb 16, 2014 06:00
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PhantomOfTheCopier posted:[percentage method stuff] This is really great, thanks for the taking the time to write it up. I think I get it now, and I'll definitely play around with some numbers in a test budget later to see how it would work for me. I see the main advantage being that you are essentially creating an additional buffer spread across all categories, especially when you get some extra income (e.g. overtime, bonus) that is assigned proportionally across everything. It seems that this would probably help you build up enough of a slack that you have enough flexibility in the month-to-month budget to "roll with the punches" without having to adjust your actual long-term plan. The main disadvantage I can see, compared to the pareto allocation method (which is essentially the YNAB method as well), is in situations where you are trying to pay off debt as fast as possible. In those cases, if you already have your normal income budgeted out to cover all your needs that month, if you do get any extra income, it might be more useful to assign all off that towards debt payment, rather than spreading it out equally across the budget. But I guess that is exactly why there are different methods of budget allocation, and people should chose what method works best for them and best meets their current requirements. And despite me being a YNAB fan, I'll nth the suggestion that it does sometimes get trotted out as a "one size fits all solution" when it might not always be the best way to go. You've definitely given me a fair bit to think about already, so thanks again!
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Feb 16, 2014 10:00
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PhantomOfTheCopier posted:Allocation techniques Thanks for the write-up, it was pretty informative. I now know that I use a Pareto method for my estimated monthly income then apply any amount I earn in excess (overtime/spiffs) using a percentage system. The percentages are generally pretty irresponsible (mostly discretionary stuff and goodies for myself), but since I view it as "extra" income. I can justify the indulgence.
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Feb 17, 2014 16:37
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I make $1800 after taxes, every two weeks. I have to spend $180/mo on car insurance and $310/mo on my student loans. With my weight-gaining goals, $300/mo is fine for groceries, and I own my car. I currently live at home and pay a small amount of rent of rent equal to about $370/mo, but I need to be out within a month. My job sucks so I'm applying at other jobs far away and want to move ASAP, but I don't know if I might get an offer in three weeks or in three months. In the mean time, it looks like I can find 2br apartments located near groceries and a gym for ~$1100 - $1200/mo, or, for more like $900, 1BR apartments nearer to "fun" stuff (my city sucks) but less near groceries and a gym. So, assuming I can find a place that will lease on a monthly basis, I can expect to pay <=$1200/mo in rent for now. Usually I pack lunch and eat breakfast and lunch at home, but if I have to spend a lot of time at work for a week or two, I'll up eating out three times a workday and spending ~$20/day to do it. That's happened about three times in the six months I've been here, for about two weeks each time, so I'll say that's 14 * 3 * $20 = $840 overall and $840 / 6 = $140 as a monthly expense. I also have some weird stuff like a $25/mo codeschool subscription and a $12/mo supernews subscription for MY ANIMES. I'll call this "fun" and budget $200/mo for it. Other "fun" stuff will be fun stuff like eating out with coworkers, video games, watches, etc., if I feel like doing that. Projected monthly income/outgo: In after taxes: $3900 - job Out: $310 - student loans $300 - groceries $200 - fun $180 - car insurance $150 - gas $140 - excessive eating-out $1300 - conservative estimate of rent once I move out while living in this area Total expenses: $2580/mo Income minus out-go: $1320 to accumulate in my checking account. Currently, I have $5500 sitting there. Sound good? Am I done budgeting?
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Feb 23, 2014 07:13
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EN Bullshit posted:I make $1800 after taxes, every two weeks. I have to spend $180/mo on car insurance and $310/mo on my student loans. With my weight-gaining goals, $300/mo is fine for groceries, and I own my car. You should probably consider being a roommate or at least getting roommates since you're not budgeting for all the costs associated with furnishing your own place. Is that what 5500 is for? Also, no health line, no emergency fund, no maintenance or car tire savings, etc. a good budget has those things explicitly tracked rather than under some umbrella slush fund of more or less appropriate size. Just check out Phantom of the Copier's or my budget a few posts up from yours. Those have a more appropriate set of line items with value tracked.
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Feb 23, 2014 12:14
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I don't need to furnish my place. A mattress on the floor with a folding table and a folding chair to hold my computer will be more than enough for my purposes. I don't know what a health line is or why I would budget for it. If there's something unexpected that requires medical attention, isn't that an emergency? And if medical attention isn't required then it's not happening. Boom, no need for health line. Finding a roommate when I only want to be here 2-3 months sounds like more trouble than it's worth. My car cost $2000. I guess I'll allocate half of that from my emergency fund to car maintenance. Updated Projected budget: Projected monthly income/outgo: In after taxes: $3900 - job Out: $310 - student loans $300 - groceries $200 - fun $180 - car insurance $150 - gas $140 - excessive eating-out $1300 - conservative estimate of rent once I move out while living in this area Total expenses: $2580/mo Income minus out-go: $1320 to accumulate in my checking account as my emergency fund. I'm not really going to be comfortable until I have a good six months of salary in there (~$24k), so I'll just allocate everything that remains to my emergency fund. Emergency fund: $4500 Car maintenance fund: $1000 Once I have a comfortable emergency fund, I'll start allocating all extra funds ot paying my student loans off early. Then I'll focus on retirement. It doesn't make sense to me to make long-term savings when I have almost $30k in loans at 6.8%.
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Feb 23, 2014 22:42
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EN Bullshit posted:I don't know what a health line is or why I would budget for it. If there's something unexpected that requires medical attention, isn't that an emergency? And if medical attention isn't required then it's not happening. Boom, no need for health line. Um, no? There's budgeting for copays, prescriptions, random bottles of ibuprofen at the supermarket, glasses/contacts if you wear them, random "oh poo poo I think I have a cavity" trips to the dentist (although you should really just budget for regular checkups to the dentist), regular physicals, etc, etc etc. All of these things are non-emergencies and should be budgeted for. You're also forgetting a gifts budget. Birthdays, Christmas, etc. e: If you're only gonna be out there for 2-3 months then why not just be a roommate rather than finding one. Moving is expensive man. You're going to realize all sorts of things that you need but don't have if you're moving into a place alone. You're gonna need dishes and flatware, you're gonna need a pan and a pot, you're gonna need cleaning supplies and vacuums/mops, the list goes on. If you're really just going to live somewhere for 3 months max then it's really not worth it to move and buy all this stuff at once and then move it all again. Plus all the deposits you're gonna have to put in. Also I don't think you're going to find a place that rents out for 3 month contracts. I mean if you have history with a place I'm sure they'd be willing to work with you month to month after you contract lapses. What about renter's insurance? Health insurance? Don't see those on your list either. Boris Galerkin fucked around with this message at 23:01 on Feb 23, 2014 |
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Feb 23, 2014 22:54
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EN Bullshit posted:I don't need to furnish my place. A mattress on the floor with a folding table and a folding chair to hold my computer will be more than enough for my purposes. New tires/brakes/oil changes are not an emergency, they should be a regular budgeted expense. A new transmission is an "emergency" and will cost more than $1000. You also need to carve out money for a security deposit.
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Feb 23, 2014 23:01
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Would you pay someone $1950 to save you from making a post in a classified or from searching in a classified?
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Feb 23, 2014 23:42
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Boris Galerkin posted:Health insurance? Clarification would be good but if he is pulling down $50k+ a year he is probably getting it through work. I put $2k into my HSA, work puts in $1k and I don't even bother looking at it. I would say most people budget off of take home not gross. So all those pretax items are off budget (HSA, 401k, insurance premiums, bus pass, etc).
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Feb 24, 2014 00:16
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lol just because health is a priority to you doesn't mean it is to everyone else. I know plenty of people who have never been to a doctor or a dentist in their lives or since they were infants. They'd never go save for an absolute emergency. And some of those same people are excellent at managing their finances. edit: also, what sprowzek said.
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Feb 24, 2014 04:18
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spwrozek posted:Clarification would be good but if he is pulling down $50k+ a year he is probably getting it through work. Yeah but work usually doesn't pay for it entirely in my experience. Wikipedia says they typically cover 75% of the premiums and leaves you with the rest. Mercaptopropyl posted:lol just because health is a priority to you doesn't mean it is to everyone else. I know plenty of people who have never been to a doctor or a dentist in their lives or since they were infants. They'd never go save for an absolute emergency. And some of those same people are excellent at managing their finances. And these people are stupid. What's your point?
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Feb 24, 2014 04:20
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Boris Galerkin posted:Yeah but work usually doesn't pay for it entirely in my experience. Wikipedia says they typically cover 75% of the premiums and leaves you with the rest. They'll still take it out pretax (or out of your paycheck). Its usually not a specific budget item for people who get it automatically deducted.
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Feb 24, 2014 04:41
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EN Bullshit posted:I don't need to furnish my place. A mattress on the floor with a folding table and a folding chair to hold my computer will be more than enough for my purposes. My point. Let's suppose you want to buy a new mattress, box springs, and something resembling an actual bed, and that in the next two years. (These things tend to happen when other people show up in lives as well, you know.) So you're looking at what, $1-1.5k? You could save nothing now and need to find $1500 when it comes to pass, or start saving $60/mo now and be ready to buy it in two years. quote:I don't know what a health line is or why I would budget for it. If there's something unexpected that requires medical attention, isn't that an emergency? And if medical attention isn't required then it's not happening. Boom, no need for health line. Likewise: Housewares, cleaning supplies, light bulbs, kitchen equipment, sponges/clothes, laundry soap and quarters, sunglasses, clothes, gifts, vacations/trips, etcetera. quote:My car cost $2000. I guess I'll allocate half of that from my emergency fund to car maintenance. Try to figure out if you want one big emergency fund or savings within each category (so that "groceries are saved up four months ahead" and so forth). quote:Once I have a comfortable emergency fund, I'll start allocating all extra funds ot paying my student loans off early. Then I'll focus on retirement. It doesn't make sense to me to make long-term savings when I have almost $30k in loans at 6.8%. Retirement choice. In ten years, you have $19500 plus interest earning 2-20%, still owe $13.5k on the student loan. At the fifteen year mark, the student loan is gone and you have $29250 in retirement. No retirement, but extra $1k/yr to loan. In ten years the loan is gone. In fifteen years, if you save $3253 (estimated student loan/yr) plus the $1k plus the employer match, for the next five years, you have $26015, but it's only had a few years to earn any interest. Please check my math. Then use an online interest calculator to get an estimate for how much retirement you'd actually have whilst earning interest on it. It's a weird thing, though. If your employer offers it, you can spend some of your money and they'll give you more because you did. And those were the 2% numbers; if you have 5-10% matching... woo.
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Feb 25, 2014 05:22
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PhantomOfTheCopier posted:health stuff Actually, I do include OTC pills (heartburn, allergies, etc.) in my groceries budget. PhantomOfTheCopier posted:a new mattress: $1.5k I figure this can come out of what's allocated to that month's savings, since that's just a little over my allocated savings in a month and the difference can be pulled from money I've saved up. My thinking here is that there are two kinds of spending that one needs to watch out for in the long run: - The little costs that occur regularly - The big costs I figure that the little costs that occur infrequently, or maybe once ever, don't really need to be planned for, since "in the limit", they're nothing. PhantomOfTheCopier posted:Likewise: Housewares, cleaning supplies, light bulbs, kitchen equipment, sponges/clothes, laundry soap and quarters, sunglasses, clothes, gifts, vacations/trips, etcetera. ... That said, these are things I did not account for, and even infrequent small costs will add up if you have a bunch infrequent small costs spread over many different categories. PhantomOfTheCopier posted:retirement calculations I'll have to run the numbers when I'm not so tired that I'll make a bunch of mistakes, but it looks good. Thanks!
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Feb 26, 2014 01:11
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EN Bullshit posted:I figure that the little costs that occur infrequently, or maybe once ever, don't really need to be planned for, since "in the limit", they're nothing. The little things are often what put most people over budget each month. Does your estimated $1300 for rent include utilities/cable/rent? You mention a gym but then I dont see it in the budget.
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Feb 26, 2014 13:53
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Personally I find it too tedious to try to budget every little thing. Is it really worth my time to figure out how much to budget for a 'haircuts' line item? No. I do have a family of 4 now though. What works for us is a general MISC. category that is 10% of our monthly take home. That covers all the miscellaneous irregular expenditures. Haircuts, copays, oil changes, a trip to Lowes for lawn fertilizer, whatever. It works for us. If at the end of the month there are unused MISC funds we can roll them over, or put them to use somewhere else. Some months we use all of it, some months we don't. The biggest thing I see people forget are things like -auto maintenance -clothing (this is a big one) -personal care (contact lenses, doctor visits, haircuts) Look at this table. It's from the IRS considers to be 'National Standards' of basic living expenses and is used when people file Bankruptcy. If your budget is not somewhere in the close ballpark of this, you should re-evaluate it. code:
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Feb 26, 2014 19:23
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I've had a bad month in regards to my budget. I just started again, everything was going fine but then: 1. The car needed repairs, about $500 bux worth 2. I went to the doctor and needed a bunch of medicine - $130 3. Phone broke - replacement is anywhere between $200-500 So my budget categories are: Car Maintenance/Repair $500~ Medical $10 No phone replacement category I can easily absorb the cost because I'm  at saving but in the future I want my budget to be flexible enough to be able to handle such events. How do folks do it?
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Feb 27, 2014 04:17
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Boris Galerkin posted:And these people are stupid. What's your point? You were talking about copays, prescriptions, glasses, and things he does not plan on needing barring an emergency. PhantomOfTheCopier addressed the same exact thing you did but actually made it relevant and useful for the guy, and made him think about things he hadn't really considered before. You could have made the same points you did but actually made them relevant to the poster your were responding to. PhantomOfTheCopier posted:This definitely depends on your view of categories within your budget, and your views of health. Even when I was not making very much money, I did my best to start funding an HSA (but it's for you to decide if the monthly administrative costs are worth it), and now I get to use that savings even though I have network coverage. Likewise, I started up some minimal health savings for things like OTC pills and athletic tape and such. You might decide this is all "groceries" if you don't want to track it in a separate category.
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Feb 27, 2014 04:51
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skipdogg posted:Personally I find it too tedious to try to budget every little thing. Is it really worth my time to figure out how much to budget for a 'haircuts' line item?... I think you've found the point at which a budget becomes a personal thing, namely that the way in which one approaches the "bottom 10-20%" of their money really depends on their needs, and those are likely to change over time. So many people are still trying to figure out how to stabilize their "top 80%" of expenses that we often don't get to discuss the low end. I find the examples slightly amusing because I only recently created a category for clothing; in the past, it was part of the "general living expenses" along with cleaning supplies and stuff. On the other hand, my "laundry" category is something of a hold-over from when I had very little money to work with monthly, and I was willing to consciously save the $15/mo to cover the quarters and soap (and it was easier having a separate category since withdrawals to cash happened). Categories can be created for different purposes. My rent category ensures that I save a minimum toward a relatively-static, monthly expense. My "movies" category prevents me from spending too much on something. My "clothing" category reminds me that I need to spend more than zero replacing my wardrobe. I have one membership/license category that currently gets 70 cents per month because it reminds me that I have the license and need to use it. My "tires" category is for long-term savings, and may not even get spend for that purpose. The budget is supposed to help you succeed, so slide those smaller categories around until you find something that fits. The lump sum approach is a good one, just don't forget to have it covered somewhere/somehow in your six-month emergency fund. Suspicious Lump posted:I've had a bad month in regards to my budget. I just started again, everything was going fine but then: Whelp, I'm clearly a strong advocate of creating savings categories for these things. Your auto maintenance budget should include the annualized costs of oil/lube jobs, and you need to estimate medium-to-major maintenance events based on the model and age of the vehicle. Impact absorption is much easier if you have some of the money there, even if you have to float things around (such as turning "tire savings" into a replacement clutch). I maintain a relatively high maintenance budget because I went through the first round of replacements five years ago. This year I again get a chance to be proactive about upkeep, so we'll see. Phones die. Add $10/mo to your phone bill category and you'll have $360 in three years to fund that replacement. Need more, a mere $2/mo more bumps you to $432 saved in three years. Medical... very complicated. As has been mentioned a bit on this page, some people are immune to health issues, but many, if not most, people will want something to cover their yearly cold/flu, OTC medications, and so on. Depending on insurance coverage, a single office visit or dentist appoint could run to several hundred dollars easily, suggesting you'd need at least $10-20/mo saved most years. Yeah, this is a lengthy network/HSAish type of conversation. In general, save ahead for this type of category as you can / as seems fit, and if it happens to go a bit negative (but is still covered by your total savings), don't feel too bad. Compensate by adding a bit more per month and see how the next twelve months go.
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Feb 27, 2014 05:51
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Mercaptopropyl posted:You were talking about copays, prescriptions, glasses, and things he does not plan on needing barring an emergency. Nobody plans on getting a cold or getting in a car accident or being diagnosed with cancer. I don't understand what your point is.
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Feb 27, 2014 14:45
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So I'm in pretty desperate need of budget advice. I recently got a student key for YNAB and really like the look of the program, but I'm really having trouble with figuring out what amount of money should go where. My average month looks like this: Income: Gi Bill: $1900 Part-time Job: $800 Bills: Insurance/rent (paid to my dad): $300 Car payment: $300 ($9k left) Gas: $120 Food: $200 (that's with eating out a lot) Netflix, Spotify etc: $20 I have $500 in the bank as I type this right now (just paid off all my credit cards, which was about $1200 total), with $2100 coming in this afternoon. The car payment is really killing me, but I need my car to get to school and work. I'd like to move out on my own at some point, but seeing as how the absolute cheapest apartment in this area is $800 a month, that may not be possible. My spending habits have been out of control recently, and I'd really like to reel them in, I fell hard for the "hey, I have $1k in my bank account, I'm flush with cash!" trap. How much more should I be allocating towards my car, saving, spending etc? I'm sure from the outside this will seem like a very simple situation to work out, but I'm just having trouble getting started.
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Mar 28, 2014 16:45
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App13 posted:So I'm in pretty desperate need of budget advice. I recently got a student key for YNAB and really like the look of the program, but I'm really having trouble with figuring out what amount of money should go where. Do some research to get an appropriate estimate of the costs and add like 10% to be conservative. Figure out the time until you want that thing, divide amount by time to figure out savings amount. So you want to move out. You'll need 800 for security deposit, 800 for rent, and like 300 for basic home supples. 1900, add 10%. 2090. Figure out when you want to move out, divide the amount needed by the total time in months or pay days. So if six months away, save ~350/month. Repeat for other mid/long term goals.
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Mar 28, 2014 17:20
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Can you get a cheaper car? I understand the need for a car, but I don't see the need to spend over $9k on a car. Can you spend the time to find a cheaper used car for around $2-4k?
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Mar 28, 2014 17:26
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App13 - I would start with examining your past expenditures. Then allocate your money for April, with a large emphasis on saving money, being you bring in ~2k over your base expenses. See how it goes. You could have 3k saved up pretty easily by June, or 5k with a little more effort.
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Mar 28, 2014 17:45
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tuyop posted:Do some research to get an appropriate estimate of the costs and add like 10% to be conservative. Figure out the time until you want that thing, divide amount by time to figure out savings amount. Depending on where you live, it could be first and last month's rent plus security deposit -- so three month's rent total. That's the standard for around where I live.
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Mar 28, 2014 22:08
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EN Bullshit posted:Can you get a cheaper car? I understand the need for a car, but I don't see the need to spend over $9k on a car. Can you spend the time to find a cheaper used car for around $2-4k? I completely agree. It's a 2007 civic I bought when I was first in the Navy and wasn't expecting to be out this soon. I doubt the thing is worth more than I owe, how would I get rid of it and into a cheaper car? Also, thank you everyone for the rent and savings advice. I've also been watching the YNAB videos, which are helping clear the fog a bit.
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Mar 28, 2014 23:28
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Hey goons! My girlfriend and I have recently moved out and got ~BIG PEOPLE JOBS~ and I want to make sure that we're doing our utmost to secure our financial future: (All figures are on a fortnightly basis, since that's how often we both get paid, irrespective of how often we pay them, so for some things like phone & internet, we'll likely have a surplus months worth eventually) Income: Me: $1720 Her: $1720 total: $3420 Expenses: Rent: $840 Food: $450 Mobile: $40 iPad: $30 Internet: $50 Contents insurance*: $25 Motorbike payments*: $50 Health insurance*: $125 Bus: $40 Electricity: $100 My spending: $100 Her spending: $100 Eating out: $100 Total = $2050 Savings: Me - Engagement: $300 Emergency: $400 Her - Holidays - $300 Emergency - $400 Is there anything I'm missing here? The reason I don't have a car line is because I literally have a brand new, all included (fuel, insurance, maintenance and tyres) car that my parents pay for to help us get set up since we literally had to move across the country for my girlfriends job (thanks mum!) and I didn't have one lined up at the time. E: the items with asterisks are not implemented yet, but will be shortly - so worth budgeting for them. Also this week will be the first where I get paid my full wage and don't have something come up (had a family issue where I had to fly home - $900 and paid off my credit card $1000) Double edit: if it matters I have about $600 in emergency fund savings and $450 in bills (electricity and phone) and she has $1500 in emergency. Guni fucked around with this message at 10:53 on Apr 6, 2014 |
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Apr 6, 2014 10:47
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