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PhantomOfTheCopier
Aug 13, 2008

Pikabooze!
Is your money gone before you've even cashed your paycheck? Are you eating Ramen for ten days so you can afford to pay the rent on the first of the month? Are you clueless about how much you spend on those nightly runs to the bar versus how much actually makes its way to groceries? Perhaps it's time you consider a budget.

Whether it's your personal budget, the budget of federal government, or a budget for a non-profit organization, it is often essential to find a technique to ensure that income is being used most productively to deal with expenses. While we always hope that income exceeds expenses, there are periods of time where that may not be the case, but it is still useful to minimize losses and plan for the future. In periods of growth, ensuring that spare money isn't spent on pure frivolity can also be difficult without a budget.

A successful budget should: Establish an expectation of income; and, plan for expenses. Having such a plan, it will be necessary to: Track those expenses; and, track 'account' balances. An account could be a physical savings or checking account, a jar into which you've saved grocery money, or a line in your ledger indicating that $100 of your savings is for buying movies.

Given these general needs, creating and using a budget for the first time might require the following steps:
  1. Determine the 'period' (weekly, monthly, quarterly)
  2. Estimate income (monthly, yearly)
  3. Decide major categories of expenses and long-term savings goals
  4. Itemize your expected expenses and long-term savings
  5. Execute your budget and track your savings
  6. Review: How much did you spend? Does your budget need adjustment?

There are several different styles of savings and budgeting frequently recommended for those just getting started.


Example: You earn $400 of net income every week of the year. Your rent is $500/mo, utilities (phone, electric, water, sewer, garbage) average $180/mo, and groceries are $300/mo but sometimes you buy in bulk and it costs a bit more. You also want to buy a new, $200 eBook reader, in four months.

Let's start by reviewing some basic math: There are 12 months in a year (you knew that), 52 weeks in a year, so an average of 4.33333 weeks per month (52 divided by 12). Some months are "longer than others because they have five Fridays woo!" or something, but it's best to ignore that for now (unless you already have a bunch of money saved) and start with "four weeks per month".

For rent, you need $125/wk ($500/4); utilities needs $45/wk; groceries $75/wk. Those are your generally-required expenses (though you could skimp on groceries if you needed to save a little extra). For your savings goal, you have one-third of a year, hence 17 weeks (52 times 4/12, rounded down). You need to save $12/wk (200 divided by 17, rounded up). Your weekly leftover will be $143.

Now that you know how much to save, how do you do it?


Technique 1: Envelopes, coffee cans, and jars, oh my!

For each allowance or pay check, you take cash and stuff it into labeled containers and, when you need money for an expense, you only permit yourself to pilfer from the appropriate place. In the above example, create envelopes for Rent, Groceries, Utilities, eBook, and EverythingElse; each week, after cashing your check, place funds into each envelope ($125, 75, 45, 12, 143). At the beginning/end of each month, you pull the $500 to pay your rent. When you have a random bar run once a week, pull $20-40 from EverythingElse, and put the change back in that envelope at the end of the night. What happens when the envelope is empty? No. Bar. Run.

When an envelope has extra, don't use it for other things. The only exception is the EverythingElse envelope, which might be used for emergencies. If your electric is due every two months, for example, the Utilities envelope might be empty if you started your savings plan on the "off month" (if so, get that money in that envelope as soon as possible and skip the bar this week!).

Yay: It works. It's easy to check account balances. It develops will power.

Bleh: It requires cash, but most people use plastic. It's difficult to "loan yourself money" --- if you need to steal $50 from EverythingElse for Rent that month that you are out of town and have to pay it early, you need to write up a little piece of paper that says "EE IOU $50, Love Rent". It suffers from round-off/partial-dollar issues --- keeping change in jars works better than an envelope, but you have to use the change in addition to the paper money.


Technique 2: Ledgers

Go get an account book, ledger, or lined portfolio. For each pay check direct deposited into your checking account, you divide the total income onto the various lines of the ledger. While your checking account shows the total ($400), you know how much is available for each item based on the balance in your ledger. When you go out to the bar, you know how much is available for 'entertainment' (from the EverythingElse line of your ledger); you either go to an ATM to extract cash, or monitoring your drink intake to ensure that you haven't over-spent when you use your debit card to pay the bill. Each month when you hand over your rent check, you subtract from the appropriate line of the ledger.

Yay: It's better for electronic balances. It doesn't require Internet access nor entering data online. It's easy to check account balances. Some home finance ledgers already come with categories, so you don't have to reinvent the wheel. Others are simply lined pages, so you are free to handle more complicated arrangements of your money if necessary. People and businesses have been using these for centuries.

Bleh: Basic addition and subtraction is required. It's easier to overspend if you don't pay attention. It's not tied to electronic bank accounts or Internet expense software. If your friends are hanging out at your place before you go to the bar, you have to look goony and check your ledger when you pick up your debit card.


Technique 3: Internet

Online banks often permit you to track expenses or subdivide your accounts for record-keeping purposes. If you can divvy up your income into sub-accounts, you can execute your budget and keep track of your savings. Some sites offer free services; others charge for membership. Frequent mention is given to mint.com for tracking your expenses. Goons have mentioned Splitwise and ClearCheckbook. You can always just start here.

Yay: It's online! It might be tied to your bank accounts. It may automatically collect and categorize purchase information from your credit and debit cards. It might be easy to produce reports and six-month summaries. You may get graphs and charts that help you visualize spending and savings.

Bleh: It's in the cloud. It might be tied to your bank accounts. You might have to authorize it to connect to your credit and debit cards. It might not be free or otherwise may flood you with advertising. It might be easy to overspend if you don't pay attention. You may have to enter certain receipts by hand. It may be too restricted for your needs (limited number of subdivisions, purchases tracked per month, limited history, etc.)


Technique 4: Software

Software companies still produce applications for use on a desktop computer, though it may be that the only "big name" remaining is Quicken. Many people create electronic ledgers with spreadsheets. Receiving many great reviews lately is YNAB, which will help you create and follow your first budget. A "small business" application may prove useful if you have an exceedingly complicated arrangement of accounts. Some of us use customized applications tied to databases.

Yay: These tools will be the most powerful, in general, and can pretty much satisfy every need. They may permit a higher level of customization. Dealing with multiple accounts may be easier. Data entry, extraction, and modification may be easier in a desktop application than using an online interface. You don't have to wait for site outages or maintenance windows.

Bleh: One application may not be sufficient; you may need several. Applications may not intercommunicate easily. They may not talk to free Internet applications.


Advanced Budgeting 1: Yes. You are building a buffer.

Stick to your plan, even if you notice extra money in the envelopes/sub-accounts. In fact, the above example has a built-in savings plan. You are saving $125/wk for rent, for 52 weeks; that's $6500. In twelve months, however, you've only spent $6000 ($500 times 12) on rent. You just saved up a whole month of rent! If you don't spend all your "extra" grocery money each month, the same thing will happen. When you go buy in bulk every three months, you'll probably spend a bit more, so you have to be saving at the same rate during the other two months. Just because there's money for groceries doesn't mean that it's time to go buy daily doughnuts; save that money for your crackers, rice, flour, sugar, beans, etc. You've seen the movies.

Once you've saved sufficient funds to cover a full month's expenses in a single category, you can review your budget. In the example, saving $116/wk will cover your $6000/yr, but you'd be $36 shy every four-week month. Keeping an extra $36 in Rent might seem sufficient, but you want to build more savings; most recommend six months' worth.


Advanced Budgeting 2: Priorities.

Most will realize that basic bill payment is the first priority of the budget, but how do you handle everything else? One approach is to realize that you need to budget for some 'extras', those things that keep you happy and functioning like a human being, while staying cognizant of other potential uses of any spare money you may have. The priority of the categories may go something like this:

Section 1. Bill payment minima
Section 2. Basic extras
Section 3. Depletions/Accumulations
Section 4. Debt reduction, long term
Section 5. Capital expenses
Section 6. Boundary mismatch and inflation
Section 7. Debt reduction exemplar and Investments
Section 8. Extra purchases
Section 9. Security

First, ensure all bills are paid per period (typically include commuting fuel and parking here, as well as your yearly automobile tabs, phone, Internet, electric, and so forth). Second, add on some minimal extras to keep you sane (health care, one bar run each month, one book each month, one magazine subscription per year). Next, considering accumulating extra savings for important accounts (plan to save an extra month of rent and food over the next eight months, for example, but try to save equally for most of your Section 1 (S1) expenses). If you're already eight months ahead in a category, it might be time to budget less for that category each period so your savings are "depleting" back to the target buffer.

Next, consider any long term debt reduction. This and Section 3 could be reversed depending on your debt to savings or debt to income ratio. Debt includes your student loans, which may permit you to send payments in advance so that you owe them no money for N months, which would help Section 3 and 4! Try to keep an appropriate target for your savings buffer (S3) so you can pay off your highest interest loans in a hurry; you want to avoid miniature emergencies where you have to keep carrying a balance on your credit cards.

S5 generally includes long-term savings goals, such as items to be purchased over the next six months or more. The bulk of clothing likely goes into this category, as do extra car parts, electronics gadgets, that new television or stereo, and so forth. If you feel you will "just die without a new pair of $100 jeans every month", try to pace yourself by putting $35 in S2, and $65 in S5, to remind yourself that it's something you "want" or would "like to have", but it's ultimately not essential. In emergencies, S5 is forfeit first, followed the S3/S4; maybe a new pair of jeans every two months will be enough.

S6 is for crazy people that realize things about money that you may not want to know. Boundary mismatch covers end-of-month or end-of-cycle imbalances that might occur due to the frequency with which you are paid. The $125 versus $116 in the above example is such a mismatch, and would also occur if you're paid every two weeks. Budgeting for inflation would provide additional savings for estimates in food, electric, or rent increases, for example, based on CPI numbers, or other sources of information. Such savings provide coverage for "re-budgeting mismatches": You have 6mo of rent saved, $3000, but your rent hops from $500/mo to $600/mo and suddenly you only have 5mo of rent saved; if you expect such a rent change to occur 24mo from now, you'll want to steadily increase your savings rate in the interim to "soften the blow".

S7 appears when you have enough money left over to seriously consider investments as well as higher payoff rates to debt. Student loans through the federal government may charge such low interests that it's better to use your money elsewhere. If you can't live with that debt "hanging over your head", however, here's where you could get aggressive and pay triple or quadruple. This is a low priority because it's a form of 'luxury spending' and doesn't make much sense if you don't have buffer money saved.

S8 might be viewed as a combined S2+S5 speed-savings account. If you get down this far and you still have money, then go ahead and save to buy that gadget in two months instead of three. Be aware that such budgeting requires more frequent reviews, so you may have to start considering how you balance your capital expense funds. If you have money leftover for this category, you're free to buy way too many movies, too many shoes, eat out too much, and otherwise fail those Seven Deadly Sin Avoidance courses.

S9. It might seem odd that money for safety and "security" would appear last, but this category is truly here as a backup of the backup type of savings plan. You already saved "extra" money in Sections 2 through 8, so you should start by summarizing your effective savings rates. In a sense, review your budget at this point; make sure you are saving enough.


Advanced Budgeting 3: Percentages.

For each amount, x, on your budget with income I, record x/I*100% as the actual line item. Each time you are paid, simple multiplication will suffice to determine how much money is allocated to each account, so you can avoid having to remember what money goes to different places different weeks of the months. If you receive small bonuses or overtime hours as part of a paycheck, you can use the same percentages and don't need to waste time thinking about how to "use the extra money"; since a random 2% bonus hasn't changed your needs, it shouldn't change your budget either.

Yay: Dealing with incoming money is really fast. It's very easy to identify savings ratios. It works well with periodic extra income.

Bleh: Creating the budget requires an additional step. It's not ideal for a ledger if you have too many accounts. You have to ensure your software handles rounding appropriately.


What's here?

Have a budget? Share a budget. Need a budget? We'll try to help. Here are a few to get you started:

DogsCantBudget July 7, 2013
POC July 4, 2013
POC June 19, 2013 (a 2006 budget)
morcant June 4, 2013
Knyteguy May 18, 2013
DJCobol May 14, 2013

PhantomOfTheCopier fucked around with this message at 05:31 on Jul 19, 2013

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Zeta Taskforce
Jun 27, 2002

Thank you for the incredibly well written, thought out post.

The only thing I would emphasize is that this is something that you need to do every month, but it gets way easier as you do it. Every month will be different. Each month brings its own opportunities and challenges. It's a good idea to perhaps do a quick overview of the year, but with the different software options, it's possible to get bogged down trying to analyze and create the perfect, average month that will see you through.

For instance you might budget $500 in various giving in December, but nothing in March. March might be one of those magic months when you get the extra paycheck, so that will look different than April. In June your sister is getting married. You need to plan out every month, how you are going to cover things and what your goals are.

Like PhantomOfTheCopier said, keep track how you are doing and analyze analzye. Your budget needs to be realistic. You can't decide you are going to pay off $1000 in debt and invest another $1000 if the only way to do it to budget $100 for food and pretend you won't spend anything on leisure. If certain categories always go over, you either lack discipline or you were not realistic about it and you need to budget more. Also if the same emergency keeps happening over and over, then it isn't an emergency and it should instead be a budget item.

DJCobol
May 16, 2003

CALL OF DUTY! :rock:
Grimey Drawer
.

DJCobol fucked around with this message at 19:26 on May 29, 2015

Apollodorus
Feb 13, 2010

TEST YOUR MIGHT
:patriot:
So I literally killed the last thread, and therefore am not going to get any more answers there, but here is a re-post (if this is not okay, please let me know).

I will be starting a PhD program in the fall and have to move to a new city and state in the process, so between move-in expenses, relocation expenses (new driver's license? car registration?), and setting up a new apartment (furniture, mostly) I have an additional set of costs to budget for beyond the daily/weekly/monthly as well.


Fortunately, my move-in expenses should be largely taken care of by a summer job I am working, which will pay $4250 before taxes and have basically no living expenses associated with it thanks to the included room and board. Because I don't get paid until the END of September, however, and need to be there by mid-August, the first month may be a little rough.


For the school year, I am going to be making $21,000 September-May, before taxes. My tuition, school fees, and health insurance are all completely funded by my funding package, which means that this $21k/academic year should go entirely towards actual living expenses, minus the cost of various supplies (pens, books, paper, etc) at the beginning of the semester.


I am expecting to be able to work the same job I have had the previous few years, which will take care of much of my summer expenses. Nevertheless, everyone in the program I am starting recommends we save every month to spread our stipend out over the entire year. I am not very good at math or experienced in finance, but by my reckoning that means I should save $583 out of my $2333 pre-tax stipend payment towards summer expenses; anything I get paid from summer work can therefore go towards paying off my modest student loans. That means I will have $1750 a month to work with. Here are all the approximate expenses I can think of, based on how I've been living the last few years:


Grad School Monthly Budget 2013-2014 posted:

$750 Rent
$250 Groceries
$150 Gasoline (may be less, I am planning to live within easy bicycle distance)
$100 Utilities
$60 Internet
$60 Car insurance
$30 Netflix/Hulu Plus/XBox Live
$20 Renter's insurance
----------------------
$1420 (approximately) per month


How is that for a start?

And here was the only lengthy reply before the thread was killed, to which I responded:

dopaMEAN posted:

Hooray for grad school! :hfive:

Thanks! It took a lot of doing (and two years of (fully funded!) MA work to get here.


dopaMEAN posted:

Now then, what program are you in? If you're in any sort of research program you should give up on any dream of taking a job during the summer. It's absolutely inappropriate, you need to be there full time whether you're getting paid or not. My advisor says that this is just the way pay works, even when you're further into academia (he's tenured) you will still frequently get paid a little more per month for 9-11 months. I knew one person in another lab who took a part time job at a golf course to cover her unpaid month, but again, this is beyond inappropriate. Basically, your yearly pay is for 12 months of work, it's just dispersed over a shorter period. I suppose it's possible that other PhD programs have different norms - find out what is normal from your fellow grad students. In my field we can't afford to stop researching for multiple months a year, but you might be in a different situation.


I'm in Classics, which means that I need to develop my general knowledge through coursework for the first 2.5 years. Research will not be a significant component of my academic work until I am in my third year and am putting together my dissertation prospectus, at which point I will probably be able to save a LOT on rent because I will be living in the library. :v:


I will be applying for a lot of external awards and fellowships that should allow me to basically get paid to do my research, or stuff related to my research, starting essentially the moment I arrive. This could include getting a fellowship for summer study at the American School in Athens, or the Intercollegiate Center in Rome, or Rare Book and Manuscript School at wherever. But as it is, I will not have enough work until dissertation time for me to be able to justify not doing some kind of paid summer work, which may consist of teaching, research assisting, or some kind of freelance editing/coaching/tutoring/etc. for which I am qualified and can do <20hrs/wk. When it's dissertation time, though, yes, I will definitely need to maximize my time for research and writing and only take on commitments as a way of holding myself to a schedule and getting out of the house.


dopaMEAN posted:

Do you know if they'll be taking taxes out? If they aren't taking taxes out (this happens with fellowships) you will owe taxes at the end of the year. I think I owed $1000 or $1500 the first year, when I had a fellowship. Now that I'm just getting paid as a TA/RA they tax me up front and I get a refund each year.


In my MA program for the last two years I have indeed been taxed every month, however, I appreciate this question because I THINK I am, in fact, on a fellowship the first year. I will check to be sure--I do know that the $21k/yr figure does NOT include tax withholding.


dopaMEAN posted:

Also, are you sure they're covering all of your fees? I still owe about $300-350 every semester and during the summer, even though I'm fully funded. There are always going to be fees that aren't covered, so check with the other grad students to see what's normal.


In the Graduate Guide put together by the grad students from my department, the only expenses mentioned by the current students as not covered by the funding are a $16.25 "activity fee" and parking permit. The parking permits seem to be $303 per year, at least for the lots where it would make sense for me to park, and even though I'm 100% committed to the idea of bicycling and not driving to campus unless absolutely necessary, having the option to park on campus during the day could make a lot of things much easier down the road (no pun intended).


dopaMEAN posted:

Is there a reason you aren't planning to get a roommate? Every grad student I know either has a roommate or a spouse, it's a waste to pay rent on a place by yourself. Besides, $330 extra per month is basically nothing, given that you'll need it to cover any shopping/restaurants/bars/etc. You're not going to make it.


Since I graduated from college, I've lived 3 years with roommates and 2 years without roommates, and I really really prefer not having roommates. It makes everything easier for me: I don't worry about waking up my roommate if I have to come home late, I don't get woken up by my roommate for similar reasons, I don't have to clean up after other people and vice-versa, I can have people over without clearing it with a roommate, I can leave work/projects/board games out without getting in someone else's way, I don't have to worry that my roommate will be late paying his or her share of the rent/utilities/cable, etc., I can paint the walls of the place the way I want, decorate the way I want, and feel like I live in a space over which I have control. All of those things carry a huge bonus in peace-of-mind with them, and given the amount of work I will have to be doing in the coming years, it is really important to me to be able to avoid any chance of interpersonal conflict with roommates over shared spaces.

skipdogg
Nov 29, 2004
Resident SRT-4 Expert

I know the target demographic here is the younger single person without much income, but as an guy in his 30's with a decent job and a family I wanted to share something I do that has made budgeting easier.

I call it the 10% 'Misc' category. 10% of your take home income should be thrown into a miscellaneous category. My Miscellaneous category is designed to cover unscheduled expenditures that don't make sense to budget for. Hair cuts, new clothes auto maintenance, household expenses, doctor copays, fun money, whatever.

You can't budget everything, life is fluid and things change. Many budgets here don't take into account things like new clothes, or auto maintenance, prescription drugs if you get sick. Sure a short term budget can ignore those things but eventually you'll need new tires for your car, or a new pair of shoes. Budgeting for these expenses can also get tedious. Do you really want to waste time figuring out you have to save exactly $43.23 cents a month to afford a new set of tires in 2 years?

I simplified my budget quite a bit by having the 10% misc category. I basically budget my monthly fixed expenditures like mortgage/cars/insurance/electric, give ourselves a budget for groceries and misc, and whatever s left over either gets spent or saved.

You can scale the 10% back to 5 or 15 or whatever works for your family or situation, it also scales as you earn more which your expenses tend to do. I guess what I'm getting at is I've seen some crazy detailed budgets here in BFC, and the world doesn't always align with the spreadsheet. Give yourself some flexibility. For example, last month I had my transmission serviced in my car. It was 200 bucks, so it came out of my miscellaneous category.

bam thwok
Sep 20, 2005
I sure hope I don't get banned

This might work well for you, but it's generally pretty bad advice. No, you can't budget for everything, but auto maintenance, hair cuts, and shopping for clothes? You absolutely can, and should budget for those, even if they aren't neat, monthly repeating amounts. This is the type of thing that isn't a problem until the moment that it is.

Briantist
Dec 5, 2003

The Professor does not approve of your post.
Lipstick Apathy
A nitpick maybe, but YNAB should be under Technique 4 (Software), since it is an application you run on your computer. It can cloud sync to the phone app using dropbox, but there is no web interface for it.

I personally am using YNAB and I really enjoy it. I was worried about it not connecting to bank accounts and having to enter everything manually, but honestly I think it's much better that way. When I was using mint I spent more time correcting weird transaction import quirks than I do now just entering the drat transactions in YNAB. Most of the time I enter transactions on the phone while I'm out.

moana
Jun 18, 2005

one of the more intellectual satire communities on the web

skipdogg posted:

I call it the 10% 'Misc' category. 10% of your take home income should be thrown into a miscellaneous category. My Miscellaneous category is designed to cover unscheduled expenditures that don't make sense to budget for. Hair cuts, new clothes auto maintenance, household expenses, doctor copays, fun money, whatever.

Budgeting for these expenses can also get tedious. Do you really want to waste time figuring out you have to save exactly $43.23 cents a month to afford a new set of tires in 2 years?
I do this too, since I don't really give a poo poo about budgeting out for clothes shopping and haircuts and other things that only happen a few times a year. I track my major categories and fixed expenses, but all the rest gets thrown under misc. I've found that saving around 5-10% a month into my checking account works fine to keep a pad of a few thousand dollars, if that gets too high I transfer money from checking to savings.

bam thwok posted:

This might work well for you, but it's generally pretty bad advice. No, you can't budget for everything, but auto maintenance, hair cuts, and shopping for clothes? You absolutely can, and should budget for those, even if they aren't neat, monthly repeating amounts. This is the type of thing that isn't a problem until the moment that it is.
I know you can, but why should you? I guess I don't see how it would ever be a problem if you have a reasonable pad in your checking account. If major auto repairs come up, that's why you have an emergency fund. A lot of the other stuff is stuff that can be put off (if I ever lost my job, I wouldn't be out clothes shopping) or eliminated completely. A line-item budget makes sense if you're living paycheck to paycheck or if you have terrible spending issues, but for people whose checking buffer is measured in the thousands, tracking a bunch of small expenses each month seems like more hassle than it's worth.

PhantomOfTheCopier
Aug 13, 2008

Pikabooze!

Briantist posted:

A nitpick maybe, but YNAB should be under Technique 4 (Software), since it is an application you run on your computer...
Roops, I thought it was a web app. So much for paying attention to the download links on the page. I'll get that fixed up. (Frequent positive reviews of Internet applications or software might well also warrant appearance in the OP, so keep that positive feedback coming!)

moana posted:

I do this too, since I don't really give a poo poo about budgeting out for clothes... for people whose checking buffer is measured in the thousands, tracking a bunch of small expenses each month seems like more hassle than it's worth.
What I've found is that, if I don't budget for clothes, I never buy any because I look at the general savings and figure it's for that new television and hiking gear. Surely it can't be for anything as mundane as clothes I wear to work? Likewise, I know that memberships and auto registrations come at the same time each year, so it's pretty effortless to add a few more line items to the couple dozen that are already on the budget. I use percentage budgets; here are the lowest items:
pre:
Forest Passes         0.25172%
Entertainment         0.21198%
Tires                 0.21198%
Annual Memberships    0.18548%
Auto Registration     0.17223%
License (5yr renewal) 0.01855%
Yep, I budgeted off the cost of the tires I bought as some percentage of estimated cost based on mileage and rotation. I won't have enough given inflation when I get there in the estimated time, but at least I won't be looking at new tires versus clothes. If I do have to cheat and use "tire savings" for something, it will either be a severe emergency, or something automotive related (replacement tires are dumb if the engine doesn't work).

Indeed, though, as we have already seen with a few posts, one of the most important parts of a budget that I didn't mention: It's something like a mental game where you convince yourself to be responsible. If that takes a glob of monthly blow money so you don't swipe your credit card to the limit, so be it. If you have to be John D. Hackensacker III, someone here will approve. :buddy:

PhantomOfTheCopier fucked around with this message at 00:58 on May 15, 2013

GAYS FOR DAYS
Dec 22, 2005

by exmarx

Briantist posted:


I personally am using YNAB and I really enjoy it. I was worried about it not connecting to bank accounts and having to enter everything manually, but honestly I think it's much better that way. When I was using mint I spent more time correcting weird transaction import quirks than I do now just entering the drat transactions in YNAB. Most of the time I enter transactions on the phone while I'm out.

Agreed. I hated mint because I always seemed to have to fix everything, and over the span of two years, they still didn't add one of the credit unions I bank at. I love how YNAB can connect to your phone via dropbox. I also just add everything in while I'm out, and it makes figuring out how much I am able to spend really easy.

Baja Mofufu
Feb 7, 2004

monsieur fatso posted:

Mint vs. YNAB

I posted in the newbie thread asking about Mint vs. YNAB before I saw there was a new budgeting thread! (Thanks for the new thread, OP.) Anyway I was just wondering, for people who have used both: How much time do you spend on each per day? We've never lived on a budget but we're also living in the black. I'm interested in trying a budget to cut excess spending, but not in making a huge time investment.

Boris Galerkin
Dec 17, 2011

I don't understand why I can't harass people online. Seriously, somebody please explain why I shouldn't be allowed to stalk others on social media!

Baja Mofufu posted:

I posted in the newbie thread asking about Mint vs. YNAB before I saw there was a new budgeting thread! (Thanks for the new thread, OP.) Anyway I was just wondering, for people who have used both: How much time do you spend on each per day?

Every purchase I make, big or small, I pull my phone out and record the transaction (price, category, comment if I feel like it). Every few days or once a week I open up YNAB on the computer and review the transactions and approve ("clear") them. At the end of the month I pull out a calculator and check if the money I actually have matches up with what YNAB thinks I should have, and if not I fix it with the reconciliation feature.

It's a very fast process. You just need to get used to recording everything, even that 25 cent piece of candy.

moana
Jun 18, 2005

one of the more intellectual satire communities on the web
I don't spend more than a few minutes every week checking mint. Sometimes things get misclassified (my "Loan depot" mortgage payment used to get shoved under "home improvement") but it's easy to fix. I'd say mint is good if all of your banks are accepted there, but YNAB is more robust.

Shadowhand00
Jan 23, 2006

Golden Bear is ever watching; day by day he prowls, and when he hears the tread of lowly Stanfurd red,from his Lair he fiercely growls.
Toilet Rascal

Baja Mofufu posted:

I posted in the newbie thread asking about Mint vs. YNAB before I saw there was a new budgeting thread! (Thanks for the new thread, OP.) Anyway I was just wondering, for people who have used both: How much time do you spend on each per day? We've never lived on a budget but we're also living in the black. I'm interested in trying a budget to cut excess spending, but not in making a huge time investment.

I am almost obsessive compulsive about YNAB. I generally keep it open when I'm at my computer since I like looking at my budget. There's absolutely no need to be as obsessive over your budget though - you can probably spend about 20-25 min a week updating and matching transactions with what you've added via the mobile app. Outside of that, its a very nice program.

OP - you may also want to add the 4 rules of YNAB into the OP as well as the webinars they have available (for anyone who is interested in watching quick videos about budgeting):

http://www.youneedabudget.com/method

http://www.youneedabudget.com/support/training-and-education

http://www.youneedabudget.com/method/nine-day-course

http://vimeo.com/36573165

These are all free and are a great thing that YNAB actually does. I can't recommend these enough.

It also goes on sale on Steam occasionally. I bought it full price but definitely wait for a sale if you are interested.

bam thwok
Sep 20, 2005
I sure hope I don't get banned

moana posted:

I know you can, but why should you? I guess I don't see how it would ever be a problem if you have a reasonable pad in your checking account. If major auto repairs come up, that's why you have an emergency fund. A lot of the other stuff is stuff that can be put off (if I ever lost my job, I wouldn't be out clothes shopping) or eliminated completely. A line-item budget makes sense if you're living paycheck to paycheck or if you have terrible spending issues, but for people whose checking buffer is measured in the thousands, tracking a bunch of small expenses each month seems like more hassle than it's worth.

Not everyone has a solid emergency fund or checking account buffer, especially people just getting their fiscal house in order, who were a big constituency in the last thread. That, and every time I've seen someone ask for budgeting help with a "misc" category, it's usually the first thing that gets scrutinized, since it often vastly overrun the 10% mark. Where I think I might've been confusing, by conflating monthly budgeting for irregular expenses with monthly saving for when they arise. Annual, periodic, or bimonthly expenses like taxes, insurance premiums, vehicle maintenance, back-to-school shopping, etc, ought to be sort of 'pre-amortized' through the monthly budget. The point is to remove as much variability and unpredictability from "misc" spending (or as Mint might call it, "uncategorized" spending) as possible, since. It really doesn't take much more time to set up a budget in this way, so I find it tough to agree with the more-trouble-than-it's-worth argument.

I'm also of the opinion that the emergency fund is basically inviolate for anything other than loss of life, limb, or livelihood. And to the extent that anticipating and budgeting for less-than-catastrophic large costs like car repairs helps you not to dip into it, it's an important strategy.

root of all eval
Dec 28, 2002

I think for us the hardest part of starting a budget was our categorization, and our assigned estimations of needs.

We started tracking our expenses in YNAB 5 months ago, but never really adhered to a budget. That made tracking useful, but when it came time to tighten the clamps because of a Job loss we found our categories were too vague and too varied.

We'd chalk something up to a grocery run when it was actually personal goods and beer and pet food.

For some things such as car maintenance it provided good estimates.

In the end we had to start from scratch essentially. We created a long-long list of known expenses and literally took the list to wal-mart and did pricing per unit, estimated units per month, and assigned dollar amounts per item. On our spreadsheet we have a $2.80 entry for spaghetti pasta. This is off to the side and just helps us set our Grocery category budget as a whole. If we don't buy pasta, it frees up cash for other groceries. This pricing adventure took roughly 4 hours, for groceries and personal maintenance alone.

So while there is something to over-categorizing, I think line-iteming known expenses (as specifically as possible) to create your top level categories is a big help. It helps me feel comfortable that there will be minimal surprises. Also, if we under budget, we can take a look at what was over-purchased or under-priced and add tangible dollars instead of just tacking on another 20-30 bucks. We can also add things on the fly if we know we want to do a cookout with friends mid-month and add steak and potatoes.

People with big buffers surely can just use the general budgeting; we did forever. But when it counts getting down and dirty on the numbers and a big list really lets you prioritize your purchases.

Briantist
Dec 5, 2003

The Professor does not approve of your post.
Lipstick Apathy
I definitely agree that figuring out what your categories should be and making sure they aren't too generic is an important step. There's no right answer there. Some people might have an eating out category and that would work well for them. I basically have a separate category for eating out for lunch and eating out for dinner, because that fits my lifestyle better.

Most people probably have trouble with single transactions that span multiple categories. In YNAB, you can split them, and it's pretty easy, the hard part is adding up the individual items and figuring out which portion of the tax goes to each item, especially on grocery store runs where a lot of items aren't taxed but others are, etc. You can buy items from so many categories at a stop & shop or target.

Usually if its 2 categories I just figure out the easier one, then YNAB tells me how much is left in the total and that's what gets assigned to the other category.

I don't mind splitting so much because I'm the kind of person who likes spreadsheets and figures and crap, but my girlfriend hates this minutia.

But sometimes you have to be cognizant of what the money is really for as you spend it, and not so focused on where you're spending it. Like last weekend when I took my mom out to lunch for Mother's day, I split that transaction, and half of it was for eating out and the other half was a gift.

If you have dinner with a friend, and put the whole bill on your card ($100) and they give you $50 cash, you didn't just spend $100 on dinner. You have a $100 transaction at {some restaurant} which is split, with $50 against a restaurant category and $50 is a transfer to your cash account.

So yeah there are multiple ways to do things and it comes down to figuring out what works best for you, and not getting discouraged along the way. If you feel like you can't decide how to categorize or record something on the spot, keep the receipt, and do it later when you have more time.

(this stuff I think applies to any method, not just YNAB)

bam thwok
Sep 20, 2005
I sure hope I don't get banned

Briantist posted:

But sometimes you have to be cognizant of what the money is really for as you spend it, and not so focused on where you're spending it. Like last weekend when I took my mom out to lunch for Mother's day, I split that transaction, and half of it was for eating out and the other half was a gift.

I do this all the time in Mint. Most often for dates. I'll split the transaction my credit card throws at me into Restaurants and Drinking/Nightlife for my food and drinks, respectively, and "Entertainment" for her portion :v:

PhantomOfTheCopier
Aug 13, 2008

Pikabooze!

Briantist posted:

it comes down to figuring out what works best for you, and not getting discouraged along the way
You win the first-page prize. You need to find what you can do, meaning that "you" have to do it because we can't do it for you, it has to be something that you "can" actually do, and it has to be something that you will actually "do". If you can't whip up a customized database, use a prepared tool. If you can't go to sleep at night knowing that your paper towels got categorized as 'food', then split your receipts. If you can't deal with minutia, then try not to over-categorize. If you can't be bothered to enter data, try one of the aforementioned tools that is linked to accounts. If you freak out about your data being electronic, get a piece of paper. We should be able to throw out enough ideas so you can find something that works.

I was amused by some of the comments customers left about the ledgers; it seems some people were having trouble determining basic categories, but printed ledgers already came with a list so the task was reduced to entering receipts. A goon friend in the past spent years talking about making a budget but never did due to what seemed to be an inability to get over the mental fence of recording the right amount of data; in that case, they wanted to divide food receipts into food, drinks, and tips. That's nice, but when you don't have a clue where the money goes at all, start with something easier; I'm not sure your average yearly tip rate really matters.

The 'insane side' is where I fall, if there's a line here somewhere. I divide interest earnings into multiple categories and have calculated overall savings/loss due to the 9mils they charge on a gallon of fuel. :pseudo: I will say, though, if you just moved from nothing to jars, you have my congratulations!

bam thwok posted:

I do this all the time in Mint. Most often for dates. I'll split the transaction my credit card throws at me into Restaurants and Drinking/Nightlife for my food and drinks, respectively, and "Entertainment" for her portion :v:
Do the really long nights end up in "Health Expenses"? :downsrim:

Diplomat
Dec 14, 2009


I attempted to create a mint account today, I was really drawn to the automatic entries (current YNAB user). The deal breaker for me is that it expects you to have a savings account for each goal you set. I have several savings goals and only 2 savings accounts. I could create a budget account and have it carry over, but I would not be able to enter a starting amount.

I suppose I will just stick to YNAB, which is a great program and can do a lot more than Mint. It just is not quite a slick and straight forward as Mint.

Do most of you guys use some software/app for your budgets? Or do you have spreadsheets that you journal everything in?

Harry
Jun 13, 2003

I do solemnly swear that in the year 2015 I will theorycraft my wallet as well as my WoW
Then just have two goals active at a time and then add one when the other one is finished. It's like YNAB users actively find reasons not to embrace the light which is Mint.

tuyop
Sep 15, 2006

Every second that we're not growing BASIL is a second wasted

Fun Shoe
I think Mint is pretty awesome. YNAB is great for making sure that I just spend what I make, but doesn't care about balances or anything.

Mint has a great system of notifications so that I don't have to worry about automatic CC payments or whatever. It's also awesome for capturing expenses.

For instance, a significant amount of my expenses come out of one cashback credit card which is fully paid of automatically. Before the auto pay comes out of my chequing, Mint sends me an email and is just like "hey yo your balance isn't so hot" and I can fix it. It's nice and automatic.

As for time spent, I probably spend an hour or two a month just because our finances have been complicated the last couple of months with a big move and a wedding and all sorts of car maintenance stuff coming up.

bam thwok
Sep 20, 2005
I sure hope I don't get banned

PhantomOfTheCopier posted:

Do the really long nights end up in "Health Expenses"? :downsrim:

"Dry Cleaning/Laundry"

Briantist
Dec 5, 2003

The Professor does not approve of your post.
Lipstick Apathy
I still use Mint, I just don't use it for budgeting. It's like a quick dashboard where I can get an overview my accounts that I don't look at often, to see if any numbers looks way off. I started with Mint and just couldn't get into its budgeting feature (and subsequently gave up on budgeting). YNAB just clicked for me.

Ashcans
Jan 2, 2006

Let's do the space-time warp again!

Does YNAB link to your accounts and pull your transactions/balances automatically? Neither my wife nor I have smartphones, so if I need to input stuff myself it would mean keeping a physical ledger and entering it all at the end of the day. In which case, it seems like I might as well just be keeping my budget in a physical ledger to begin with. Having Mint able to automatically pull and sort things is a pretty big deal.

Shadowhand00
Jan 23, 2006

Golden Bear is ever watching; day by day he prowls, and when he hears the tread of lowly Stanfurd red,from his Lair he fiercely growls.
Toilet Rascal

Ashcans posted:

Does YNAB link to your accounts and pull your transactions/balances automatically? Neither my wife nor I have smartphones, so if I need to input stuff myself it would mean keeping a physical ledger and entering it all at the end of the day. In which case, it seems like I might as well just be keeping my budget in a physical ledger to begin with. Having Mint able to automatically pull and sort things is a pretty big deal.

It won't automatically automatic, but you can download the QFX fiels from your bank and import those without any issues.

Edit: I think part of the appeal of YNAB is that you have to actively keep your budget and discuss with your spouse. Its why they haven't programmed in automatic importing of transactions and balancing. The act of manually doing it forces you to constantly think about your budgeting activity. That's the major weakness of the Mint budgeting feature in my opinion. When I used to budget with Mint, I'd stop paying attention or ignore the "You've gone over your budget limit!" emails because I would constantly feel bad about that.

Shadowhand00 fucked around with this message at 20:32 on May 17, 2013

Briantist
Dec 5, 2003

The Professor does not approve of your post.
Lipstick Apathy

Ashcans posted:

Does YNAB link to your accounts and pull your transactions/balances automatically? Neither my wife nor I have smartphones, so if I need to input stuff myself it would mean keeping a physical ledger and entering it all at the end of the day. In which case, it seems like I might as well just be keeping my budget in a physical ledger to begin with. Having Mint able to automatically pull and sort things is a pretty big deal.
You don't have to carry a physical ledger, just get receipts for your spending, and look over them all at once when you're in front of your computer. I use the app usually and then throw away the receipt ASAP but sometimes I don't have a spare moment in the day and when I get home I just enter all the receipts.

It also helps that I use cash for barely anything. If you use a credit/debit card for purchases, you can do this without keeping the physical receipts because you can just log into the account. I find the physical receipts are faster, and they're better if you need to split the transaction since a CC statement won't show you what you bought.

Knyteguy
Jul 6, 2005

YES to love
NO to shirts


Toilet Rascal
Budget for June/July. This budget will actually pay off our television and credit card in June, but the savings in July will likely go towards moving expenses.
code:
INCOME	
Wife	1906.666667
Me	5026.666667
TOTAL	6933.333333

EXPENSES	
TRUCK	260
INSURANCE	80
CABLE	250
CELL PHONE	100
GAS	300
FOOD	400
TAXES	1300
CIGARETTES	100
BIRTH CTRL	25
ALHAMBRA	25
TV	700
CREDIT CARD	1400
SAVINGS	0
VIOLIN	60
POWER	150
WATER	40
TRASH	30
MISC	0
RENT	425
MISC DEBT PAYDOWN	1288.34

TOTAL EXPENSES		TOTAL LEFTOVER		SAVINGS %
6933.34		-0.006666667		0
[code]

^ This is our budget for the next two months.  This will allow us to pay down a majority of 
our debt, with the misc. debt paydown category likely going towards our truck.  

After that here is our expected budget:
[code]
INCOME	
Wife	1906.666667
Me	5026.666667
TOTAL	6933.333333

EXPENSES	
TRUCK	260
INSURANCE	80
CABLE	250
CELL PHONE	100
GAS	300
FOOD	400
TAXES	1300
CIGARETTES	100
BIRTH CTRL	25
ALHAMBRA	25
TV	0
CREDIT CARD	0
SAVINGS	1500
VIOLIN	60
POWER	150
WATER	40
TRASH	30
MISC	0
RENT	1800
MISC	513

TOTAL EXPENSES		TOTAL LEFTOVER		SAVINGS %
6933		0.333333333		0.216346154
I've overestimated almost every expense just to be sure; my wife will be the only one with a cell phone since I have a work phone. The first budget includes our exact rent, but our second budget does not. My sister will likely be moving along with us to a bigger house (we live together now), but I don't want to budget for her quite yet in case she changes her mind. We might cut cable and get prime/hulu/netflix but we really like HBO for Game of Thrones. The reason we're moving is because the quality of life increase will be worth it for us. The savings is an emergency fund for now, and we'll switch the budget to retirement after around 7-8 months of saving. There may be adjustments needed to savings and misc but these are our goals.

E: :downs: typos

E2: Also I know we probably shouldn't move without a savings backup, but seriously gently caress the house we're in. It's way too small for 3 people and all of our animals.

Knyteguy fucked around with this message at 23:09 on May 18, 2013

dreesemonkey
May 14, 2008
Pillbug
Just to throw this out there, but don't overlook Quicken. It connects to all my accounts automatically so I don't need to fret about missing receipts or anything. I used to input everything manually and it was ok until I forgot a transaction 3-4 times a year and had to spent an hour tracking it down.

Quicken isn't perfect, but mint is too simplified for me and I haven't used YNAB. The built in reports are pretty nice and decently customizeable to exactly what you want. Apparently the new version can even do some smartphone stuff and/or online backups/syncing. I don't have that version, though and had read numerous reviews about issues when it first came out.

kripes
Aug 14, 2002

BRRRRRAAAAAIIIINNNNSSS
I started with Mint, did some categorizations, and stopped because it told me I had no income budgeted (but I did). I could not figure out how to fix it. Plus I'm really nervous about having it connect to my bank account. Seems to me that MINT would be a hacker's dream.

I then started with budgetsimple.com, but there are no such things as parent and child categories, so I quickly ended up with 20+ categories to track.

Now I'm checking out YNAB. I really like the free budget webinars (http://www.youneedabudget.com/support/training-and-education). I'll sign up later and give it a try.

Shadowhand00
Jan 23, 2006

Golden Bear is ever watching; day by day he prowls, and when he hears the tread of lowly Stanfurd red,from his Lair he fiercely growls.
Toilet Rascal

kripes posted:

I started with Mint, did some categorizations, and stopped because it told me I had no income budgeted (but I did). I could not figure out how to fix it. Plus I'm really nervous about having it connect to my bank account. Seems to me that MINT would be a hacker's dream.

I then started with budgetsimple.com, but there are no such things as parent and child categories, so I quickly ended up with 20+ categories to track.

Now I'm checking out YNAB. I really like the free budget webinars (http://www.youneedabudget.com/support/training-and-education). I'll sign up later and give it a try.

definitely givve those webinars a try prior to using the software.

Nocheez
Sep 5, 2000

Can you spare a little cheddar?
Nap Ghost

Shadowhand00 posted:

definitely givve those webinars a try prior to using the software.

I found the YNAB software to be a terrible, terrible exercise in manually entering everything. However, I did get some ideas for saving for the future (things like gifts/birthdays/christmas, vacations, etc.) and my wife and I built our budget around that. A simple Excel spreadsheet has been our method until recently, when we merged our accounts. Now I use "Compass" through my credit union, and it's made things extremely simple.

tuyop
Sep 15, 2006

Every second that we're not growing BASIL is a second wasted

Fun Shoe

kripes posted:

Seems to me that MINT would be a hacker's dream.

Why? It's not like you can change anything or send any money in Mint, it's just a portal to view your accounts all in one place.

bam thwok
Sep 20, 2005
I sure hope I don't get banned

tuyop posted:

Why? It's not like you can change anything or send any money in Mint, it's just a portal to view your accounts all in one place.

I think he means that if the data itself were breached you would have usernames and passwords for the actual bank websites. If someone also happens to learn your dog's name or high school mascot, then they'll be able to access your account.

Shadowhand00
Jan 23, 2006

Golden Bear is ever watching; day by day he prowls, and when he hears the tread of lowly Stanfurd red,from his Lair he fiercely growls.
Toilet Rascal

Nocheez posted:

I found the YNAB software to be a terrible, terrible exercise in manually entering everything. However, I did get some ideas for saving for the future (things like gifts/birthdays/christmas, vacations, etc.) and my wife and I built our budget around that. A simple Excel spreadsheet has been our method until recently, when we merged our accounts. Now I use "Compass" through my credit union, and it's made things extremely simple.

Yeah, it seems to be the chief complaint about YNAB - manually entering in all of the data. Personally, I like the process of manually entering all of my transactions. It keeps me extremely aware of where my money is going. I do the reconciliation where I import my bank transactions via .qfx files, so I'm able to make sure I get everything in. Outside of a small $.40 discrepancy, I've had no issues though personally. I know people are different and some people do find this extremely annoying.

kripes
Aug 14, 2002

BRRRRRAAAAAIIIINNNNSSS
As far as I can tell...Mint may be great and Quicken may be great, but YNAB and Budgetsimple have great personal customer support. They'll actually help me set up a budget and answer my stupid questions directly.

Now I'm off to watch a 1 hour webinar on YNAB

tuyop
Sep 15, 2006

Every second that we're not growing BASIL is a second wasted

Fun Shoe

Shadowhand00 posted:

Yeah, it seems to be the chief complaint about YNAB - manually entering in all of the data. Personally, I like the process of manually entering all of my transactions. It keeps me extremely aware of where my money is going. I do the reconciliation where I import my bank transactions via .qfx files, so I'm able to make sure I get everything in. Outside of a small $.40 discrepancy, I've had no issues though personally. I know people are different and some people do find this extremely annoying.

I've lost transactions before on YNAB and spent entirely too much time trying to "find" them, but it just came down to reconciling with the actual balance and moving on. I love it.

Also, don't get me started on the bitchiness that is maintaining a cash account. I think I should really just count all cash as an expense in categories and move on. But then I don't track every cent!

PhantomOfTheCopier
Aug 13, 2008

Pikabooze!

tuyop posted:

Also, don't get me started on the bitchiness that is maintaining a cash account. I think I should really just count all cash as an expense in categories and move on. But then I don't track every cent!
This is why cash isn't real to me, and why I've always been terribly responsible with credit cards, but cash is pretty much lost the moment it's converted from something electronic. Oh, I can track mils in my database and record thousandths-of-a-percent monthly savings for some of my long term goals, but give me a wad of :10bux: and it's as good as gone. I guess I'm not enough of a :catholic: to carry a ledger around with me. Luca Pacioli would not be proud.

tuyop
Sep 15, 2006

Every second that we're not growing BASIL is a second wasted

Fun Shoe

PhantomOfTheCopier posted:

This is why cash isn't real to me, and why I've always been terribly responsible with credit cards, but cash is pretty much lost the moment it's converted from something electronic. Oh, I can track mils in my database and record thousandths-of-a-percent monthly savings for some of my long term goals, but give me a wad of :10bux: and it's as good as gone. I guess I'm not enough of a :catholic: to carry a ledger around with me. Luca Pacioli would not be proud.

It'd be find if I still had a smartphone to record this poo poo on the fly, or if both my partner and I were super anal about recording that $1.27 gas station coffee, but we're not, so it's best not to even bother. I still enter it when I remember, just for the data and tracking, but it'll never reconcile to the cent.

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Briantist
Dec 5, 2003

The Professor does not approve of your post.
Lipstick Apathy
I don't use a lot of cash, but I find it easy enough to use a Cash account in YNAB. Every other account is accurate to the cent, Cash is accurate to the dollar for me. A $3.25 muffin is $4.00. If I buy that muffin tomorrow and use a quarter from today's change, it will be a $3.00 muffin. If I buy a bagel for $3.95 and count out $0.95 in change from car then it's a $3 bagel. Basically for me it's not cash that isn't real, it's change. This makes a cash account super easy and mostly accurate.

I hardly ever use cash so again it's easier than if you use cash for everything. My main use of cash is for gas since it's cheaper and at most full service stations they top up to get a round number anyway.

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