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Kilty Monroe posted:... only budget what you think the average is and roll the rest over into a buffer for making up the difference when you get one that seems smaller than average. Keep records of every bonus you get so you're always getting a better estimate of what the average is. Once you've established your best estimate of income, follow up with allocating a percentage of income to your expense categories. Extra things go last, of course, which helps to limit superfluous spending in this model. Remember to leave some income as generic savings, either to move around for minor emergencies, to help build up your safety net for unexpected maintenance, your "six-months ahead" fund, and so forth. This allocation of income will feel a bit tight because you've under-estimated your actual income, but it will help you save. It goes without saying that you have to be able to pay your bills. If you don't even have money saved to pay rent right now, you have to get out from under that first. If you don't know when bonuses come in, you can't really count on them as income at all if you're living paycheck to paycheck. You have to know that you've saved for monthly rent, electricity, and so forth. The benefit of the percentage method is that income always goes into your expense savings in the same way. If a bonus happens to be a bit larger, you end up saving a bit more in each category, and you don't have to sit around worrying about racing a bunch of money around or not eating for the entire month. You may still have to move some from "generic savings" at times, if the unexpected happens, but you should always have an amount saved that's close to your expense expectations. At the end of the year, assuming no major catastrophe, which is true of any budgeting technique, you will have necessarily saved 5-10% of your annual income. Don't ever look at your rent savings and decide that you "have $10 spare dollars to spend somewhere else after paying rent" because you don't. Get yourself a spreadsheet and maybe some other software for expense tracking, to make sure you don't go over in categories. Feel free to read the OP for more info.
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Dec 9, 2013 15:11
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Celot posted:Then I guess I'm better off using a spreadsheet. Unless there's some inherent flaw in my proposed method of spending. You are likely better off with something other than YNAB, simply because your use case is much more amenable to a spreadsheet and some tracking software. In general, YNAB seems to be a hassle for forecasting, particularly with debit accounts, not to mention tracking multiple accounts as you want. It is a frequent question here, in any case.
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Dec 13, 2013 21:31
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Kilty Monroe posted:YNAB automatically defines your budget as the total of all your on-budget accounts, minus any money in your budget categories' balances and income marked as "Available next month." If you keep the bulk of your money in savings and mark it as an off-budget account, it will show you as perpetually in the red. Can one do that easily in YNAB, or would you have to create separate things for each savings category?
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Dec 22, 2013 02:48
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Old Fart posted:I'm not sure what you mean by "separate things"... it makes no difference where you put the money... just keeping it off-budget requires an additional step of "paying" the money to a specific off-budget account. It sounds like tracking this per account requires a second set of external things, plus an extra step for each of them. I guess I say "thing" because... well, to be frank, when I read YNAB stuff I really have no idea what they mean when they use the word 'budget' as they seem to use it to mean pretty much anything and everything. They got a little "budget" happy. vvvv I don't think I've disagreed with any of that, if you have the money categorized instead of sitting in a big lump. PhantomOfTheCopier fucked around with this message at 18:13 on Dec 22, 2013 |
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Dec 22, 2013 17:35
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Official Bizness posted:After buying YNAB back in June, I deleted the old budget excel sheet I got here in the forums. A few friends of mine are interested in getting their stuff under control, but I can't find that sheet in this sub-forum for the life of me. It was made in 2011, I think? Maybe 2012? Is there a possible lead someone could give me?
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Jan 5, 2014 18:46
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Cranbe posted:... contractor... invoices twice a month, with payment coming 6 weeks after payment (like clockwork). My monthly income averages out to $12,500, but in actuality ranges anywhere from $10,000 to $14,000 in any given month. This is definitely in need of something a bit more able to handle double entry accounting than YNAB, but if you really find you have no option but to continue using it, you might arrange to "pay yourself a monthly 'paycheck'" taken from your contract income. As YNAB seems better at expense budgeting, determine your expected monthly expenses, then pay yourself monthly out of your savings account to do your YNAB thing. If that keeps you honest with regards to paying the rent, electricity, and gasoline, then so be it. Meanwhile, get started with a spreadsheet or ledger. You'll want to know the order of incoming invoice payments so you can predict how much cash you'll have at any given time. As your true income greatly outpaces the amount you'll be showing to YNAB, just keep a separate column in your ledger for your living funds. Handle all the larger, extra, or unexpected incidentals on your ledger but keep them off the YNAB radar. Based on values you've indicated, I'd expect you'll want your spreadsheet to show your various targets. You have an amount you must make during the year to cover your living expenses ("paychecks to yourself"). You must have funds for taxes, as mentioned. You probably have larger savings goals or capital expenses planned that need to be budgeted in the longer term. Handle all these things in your ledger, where you can reduce retirement savings one month/quarter to otherwise have enough to cover living expenses, and so forth.
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Jan 7, 2014 15:15
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dreesemonkey posted:Quicken is a more traditional way to look at your finances, just transaction registers and a bunch of reports that may or may not be helpful to you.... I just find it fundamentally amusing that people think they need to buy a specific piece of software to "discover" the notion that a single chunk of money, as recorded on a piece of paper/spreadsheet/X, can be allocated to a number of purposes. It's getting to the point where I'm going to have to ask if you get credits selling the software to other people for a slightly higher price, and they in turn the same thing, and on up the pyramid.
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Jan 17, 2014 15:14
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Old Fart posted:We get it, POTC. You hate YNAB, and you have disdain for people who don't think the way you do. Since you brought it up, I have severe concerns with recommending that software to anyone on the grounds that I believe it will actually cause harm in some cases because it discourages prudent planning and encourages shuffling around money on a whim. That seems to be part of their "philosophy", and since a user is so tied to their paradigm to even attempt beginning, as demonstrated by the frequent, basic questions here and on their own fora, it seems perhaps best to just not even wait for the next sale. Instead, perhaps people should consider mentally preparing some plans instead of imagining that some piece of software will create money. Maybe then they'll realize that a little effort on their part was worth more than $15 would have gotten them.
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Jan 18, 2014 00:41
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Cranbe posted:Jeez, dude, people might be more interested in what you say if it weren't dripping in condescension.
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Jan 18, 2014 01:07
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100 HOGS AGREE posted:I don't get why you're spouting so much vitrol, it's just fuckin software, it works for some people and not for others, and there's no such thing as a magic bullet and it's not pretending to be one. Chill the poo poo out. Kenny Rogers posted:That's the spot where you just don't get it. Myself, I'm somewhat unusually optimistic and hopeful that people have the ability and will-power hidden within them to execute sound financial planning, and I believe they can do it with a piece of paper, a calculator, abacus, ledger, budgeting book, envelopes, or any of a variety of software.
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Jan 18, 2014 04:54
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spincube posted:No prob. The joy I found with YNAB is that it doesn't matter precisely how much I had in the 'food' category for the month, as long as the next trip to the shop could be paid for until payday; and likewise, there's no sense in putting money aside in the budget for a holiday next year if you can't make the rent payment next week. Suppose you average $1000/mo net income (that's $230.76/wk, e.g. paid Fridays), and you need $600/mo for rent, $200/mo for food, and $240/yr for gifts. At the most basic you could budget 60% (yeah, this is a contrived example, can you tell?), 20%, and 2%. pre:Account Balances Date Rent Food Gifts Savings 1/1 0 0 0 50 1/3 138.45 46.15 4.62 91.54 Paycheck (230.76) 1/10 276.90 92.30 9.24 133.08 Paycheck (230.76) 1/12 276.90 -7.70 9.24 133.08 Grocery (-100.00) 1/17 415.35 38.45 13.86 174.62 Paycheck (230.76) 1/24 553.80 84.60 18.48 216.16 Paycheck (230.76) 1/31 692.25 130.75 23.10 257.70 Paycheck (230.76) 2/1 92.25 130.75 23.10 257.70 Rent (-600.00) You might also look at this and say, "Woohoo, I have $92.25 left over in rent at the end of the month. Free toys!". Let's say you do that and we'll find out what happens: pre:Account Balances Date Rent 2/1 92.25 Rent (-600.00) 2/2 0.00 Pilfering/toys 2/7 138.45 Paycheck (230.76) 2/14 276.90 Paycheck (230.76) 2/21 415.35 Paycheck (230.76) 2/28 553.80 Paycheck (230.76) (Disclaimer: We got lucky. There are five Fridays in January 2014. We would have needed a 'starter buffer' of $46.20 had this been 2013.) Envelopes, spreadsheets, ledgers, web applications... they are all the same in that they should be raising your awareness of your savings goals. When it becomes painful for you to take money out of your "book savings" to go buy liquor, then you've figured it out.  For variable incomes, try to start with the bare minimum and budget from there. The percentage budget helps because it always ensures that your money goes toward your established goals, and everything will be working slowly ahead at all times. (It's also considerably 'harder', psychologically, to pilfer accounts that only have a 10-15% buffer, because there usually won't be a spare $500 lying around.) When you find that accounts are consistently dropping into the $0 to negative-  area, you need to ask why you're overspending or if you need to rebalance your budget a little bit.In any case, this is all nice but you really need to start by paying bills, restricting most extras, get a little bill payment buffer, and then all these games will seem a whole lot easier. edit: auto insurance parenthetical PhantomOfTheCopier fucked around with this message at 04:44 on Jan 30, 2014 |
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Jan 30, 2014 01:41
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tuyop posted:How should I budget for my next car? This current one that I just paid off last month is almost four years old (with 153 000 kilometers This is why I'm an advocate of more categories, not fewer. It forces you to realize some of your savings goals, even if they are seemingly minor, but it divides your money so that it becomes more difficult for you to spend it on other things. An "automobile" category might contain money for gasoline, oil changes, car washes, tire replacement, and other maintenance and things, but that provides a lot of opportunity to slide money toward higher-priced gasoline without realizing how much you're (not) saving for maintenance. Anecdote: My budget allocates for gasoline, insurance, maintenance, registration, and tires. For the longest time, I only saved 60% toward the tire "goal" because that's really all I could afford, but now that money looks like tires. If I have a major vehicular emergency, I can always pool all that money, but that's the way emergencies go. In the meantime, tire savings serves as a buffer for all those automobile accounts (so who cares if my "registration" category goes to -$2), and can even serve as a small loan for other things. Likewise, I can treat my vehicle better and get a little bit more life out of it until I have the money saved for the next big purchase. Regarding holding money for savings plans, nothing requires you to consider a medium or long-term investment as just "generic savings". Were one to put $500 in a viable CD, for instance, one could record it as "$200 rent, $100 fuel, $100 food".  (Yes, my tire savings earns interests of its own, as do all the other accounts aforementioned.)
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Feb 2, 2014 18:59
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). I think I can expect another 2-4 years out of it at least.
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Argali posted:Has anything emerged that is better than Mint at this point? Also I'm a Mac user, if that matters at all.
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Feb 9, 2014 17:55
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Henrik Zetterberg posted:I don't need it to add past transactions really, just future ones. I've got money moving to/from multiple bank accounts, credit cards, 401k, stock, normal bills that aren't the same amount every month, etc. It would be a bit cumbersome to have to enter everything manually unless I'm missing something. There are transactions here entered up to four or five months in advance, which pretty much has to be manual since most online systems would freak out, and some transactions aren't recorded until several months after the transaction date. I actually wouldn't want too much in the way of automated entry on the grounds that most electronic systems with which I interact lack the necessary details per transaction. Typically, for example, your bank may know that you used your debit card at Restaurante Z, but they'll have no idea that you blew through $40 of your alcohol budget and only $20 was spent of food. I'm an advocate of the "right number of categories" approach, which lately equates to "more categories", for personal savings and expense tracking. For people trying to save and monitor the "reality" of their expenses, throwing huge chunks into broad categories hides the reality of one's actual spending --- large companies and small governments love this approach, of course --- and seems contrary to the purpose of the tracking software in the first place. Moreover, I must say I always suspect that these budget software companies try to drive their users toward models where "fewer categories are easier" simply because they can't handle the data load, nor do they want their users realizing that their interface sucks so much that more than a dozen categories makes their software 'hectic'. My guess is that you may find YNAB useful for a small piece of your personal finances, but I doubt it will work for the majority of your needs. If you've made it this far, I think the real question actually is: What are you doing now to track these items, and what shortcomings are evident in the methods you use?
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Feb 11, 2014 06:39
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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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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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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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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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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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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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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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Boris Galerkin posted:I think he said these are biweekly figures. I do the same, I budget per paycheck so if my phone bill is $30/month then I just put aside/mark (earmark?) (30*12/26) per paycheck to keep it easy like that. Guni posted:Hey goons! On the other hand, are your expenses really this high? Rent: $840/fortnight = $1820/mo Food: $450/fortnight = $975/mo Electricity: $100/fortnight = $216/mo (I'm lazy and haven't checked the Perth costs of living, but that food and electricity... phew.) You have $1400 of income that has no associated budget items. Having a buffer is awesome, but you'll likely do better to get more of that allocated on the front end, so you don't review at the end of the month to find that you've spent it all "accidentally". If you've just moved and are getting started, it would be fair to reserve a large portion for "capital expenses", which might include furniture, appliances, and other things you need for your abode. Add an explicit item for "Emergency savings", since you haven't yet saved one, two, or six-months ahead. If possible, add some provisional savings for the car. Even though it is currently "all expenses paid", situations change rapidly at times and you'll want to be able to handle the expenses in emergency situations even if your parents are out of town or can't get you the money within three hours... in any case, you don't want the car trapped at the mechanics if it decides to throw you a lemon one day. You could take 1.17% of your fortnightly income, and you'd have $1000 at the end of the year as a show of good faith and maturity. In any case, I suspect you still have license and registration to cover. Whoa, they pay for fuel too? How weird. Well, if you don't want to be "under their thumb" forever, start saving now. :] Likewise, if you are dependent on family and/or friends, I expect you'd be more likely to have an item for gifts and charity --- upon reflection, maybe this is why it took me so long to start saving for gifts, i.e., that I have always operated very independently. Big spenders on clothing? Do you have hobbies or regular activities that require membership fees, travel expenses, equipment and/or maintenance costs? Those are the largest potential omissions. Everything past that point, as far as I can see, comes down to a matter of how you're tracking and recording income and expenses, if you want bulk or categorized buffers, if you're budgeting for inflation, cost-of-living increases, and price increases, and so forth.
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Apr 6, 2014 15:36
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Hand of the King posted:Are there any issues with dumping our current cash into CC debt over car or student loans? Thanks, by the way. From the point of view of emergencies, you only have a few thousand of wiggle room on your lower-interest cards, and you probably have all sorts of monthly expenses going through them. In short, other than savings, you don't have much of an emergency fund. You could drop all but $1k onto a CC payment and then have a $1500 medical bill or radiator repair that goes right back onto the CC. You need enough in savings to pay your monthly, revolving bills without running out of money, and you should have enough to handle small emergencies. I'd agree that $5-7k is about right, but that only leaves you $0-2k for emergencies when all your bills come due. Some loans have an effective utility above others, even though they charge slightly more interest, but this seems unlikely since none of your CCs are under 8%. As an example, if you carry an 8.5% private student loan or something, it might currently be in your best interest to not send any extra money on the grounds that student loans tend to be deferrable during hardship. Some loans penalize early repayment, though this doesn't seem to happen as much lately, while others might not be worth early repayment if the interest rates are alarmingly low; for example, paying back a 4% auto loan early is fine, but you might want to save for a down-payment for a house, so you decide to carry the 4% charges a bit longer to do that. This is all somewhat minimal to the scenario everyone else has described, however. You have enough cash to cover two months' of expenses and no other emergencies. In a "severe" emergency, you have access to around $10k of CCs, but that really limits the types of severe emergencies you can handle in a hurry; wouldn't you say? Your current CC debt constitutes a minimum 26% of your next year's earnings, and that's not counting any interest. Are your minimum payments really that low? I thought all companies had moved to a minimum around 2% of balance after the CC laws five or so years back? If you put $700/mo just toward the three credit cards, always paying the highest interest rate first and minima on the rest, until they are all paid off, you save 7% over a plan where you just put 700/3 toward each and only spread the money around after the card is done. If you make it $900/mo, the savings goes up to 17%.
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Apr 8, 2014 00:52
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signalnoise posted:
Your categories are reasonable, as they permit you a good deal of mobility in your spending. Look at all these extra expenses. You spend as much on music as you do on alcohol; $40/mo is probably "about right" for that type of entertainment expense, but you have two such categories and probably need to exercise a little caution. See if you can bring them down to $30/mo, for example. Meanwhile, you've got 45% more than those two combined going to nicotine. I've never had to worry about how to stop smoking, but it's pretty clear that's burning a hole in your pocket. On the other hand, it's nothing compared to your restaurant runs. You're a grad student; you're smart enough to know how to cook, to know how much more efficient it will be, and how much more healthy it's likely to be than restaurants. If you need to use your brain, eating right and staying healthy will keep that brain functioning a lot better than a bunch of restaurant sodium and fat glop. Make restaurant runs something special instead of something regular. "Postage"? WTH. We have this thing called the Internet now. You really need to milk this "poor student" thing a bit more. "Sorry Mom, I can only afford to send lab equipment once every two months; I hope you don't mind". Or whatever. And then you have this nice little undistinguished category that hides all sorts of misbehavior: Amazon. Three quarters of the other (above) categories combined. Let's look at the above categories a different way: Over $950 per month. As tuyop suggested, and you've reflected, is that keeping you happy? Grad school can really suck if you have too many other things begging for attention, particularly if one or more of them are deeply psychological in nature. If you're at a sizable university, there are likely a number of alternate forms of entertainment, and they are probably rather inexpensive. If you're categorized as a student or university employee, you can probably get to all sorts of museums for the price of a triple caramel macchiato double whip with a float of vanilla. Don't plan to succeed at dropping all this stuff cold, but set goals for yourself. In the next three months drop your combined music+games to $300/mo, $250/mo, then $200/mo. Drop your restaurants+alcohol to $150/mo, $125/mo... and then maybe a little bit less. Think seriously about a game that you'll want to play for three to four weeks before buying it. Go drinking during happy hour, or otherwise stock your personal bar when things are on sale. And, to repeat, brains like healthy food and exercise; get off your rear end, away from those blinky lights, and go for a walk. Look at the trees. Watch the funny looking people. During periods of intense research, some good flashes of insight can come from the outside, particularly the natural world. Smoking, yeap, research that stuff online. Thanks for listening. These are all suggestions from an ex-poorgradstudent, but you're free to take 'em or leave 'em.
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Apr 15, 2014 04:50
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spwrozek posted:I am glad this works for you but drat that sounds annoying as hell. tuyop posted:chequing balance = spending money to category balance = spending money. Multiple physical accounts and multiple logical accounts within them.  Honestly, this is equivalent determining one's own measure of "what is real". To some people, credit cards aren't "real money", so they swipe them until the point of rejection and then are shocked that they've gone over their limit. To other people, debit cards aren't "real money" because they might be drawn against all the spare money one has, and "the money has always been there in the past" so they get swiped until the items become too costly or an emergency appears. To still other people, cash isn't "real money" because it's use does not produce a third-party statement of review, or might not appear as a recorded transaction automatically in their system, so any cash on hand is rather instantly forfeit. If you can find a way to know, plan, and track your available funds for your bills, living, and entertainment expenses, and that for the foreseeable future, and can be accountable to that method, then you've figure out how to deal with your money. If something ends up not working, we'll be happy to suggest alternatives.
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Apr 24, 2014 03:38
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Well, that seems to be quite enough of that. Perhaps we could try to be a bit more gentle with people that arrive looking for help? Maybe give them the benefit of the doubt before assuming that they're SloMo2? Suggest techniques by which they can evaluate their sense of net worth versus their income and expenses? If they refuse to face reality, repeatedly fail to follow suggestions, or otherwise aren't here for help or learning, them gently caress 'em, but geez we need not crucify them for having the balls to tell us what they're planning to do with their money each month.
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Apr 24, 2014 23:41
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100 HOGS AGREE posted:I'm at 3,200, which is two months of income for me. Because I don't make poo poo. Brave to reveal all, so now we can attack.  First, look at all those beautiful categories; I approve wholeheartedly! Second, working with such tight amounts of money is no fun, but seriously consider getting terribly cruel with some of those lines on your budget. Depending on your actual interest rates, you probably want to get aggressive with over-paying your student loans. Pretty much this:spwrozek posted:It depends on your debt load. I have $30k right now but decided it was stupid and am going to roll with $10k which is about 2 months of expenses. I am dropping the rest into student loans. There is one major benefit to having debt in the form of student loans: Most lenders allow you to prepay (check your agreements!), meaning that you can send them a double payment and you won't have to pay them next month. This is, of course, a bad plan, because you'll still get charged interest for that month, but you will have lowered your interest and, if you're lucky, some of your principal, just a tad earlier. Extrapolating this to the current issue of emergency savings, I've always calculated emergency lead time including student loan prepayments. They tend to be a large chunk of monthly money, and having your student loan paid six months ahead is, in most cases, better than having six months' equivalent cash sitting in savings. Scrounging up an additional $20-$50/mo now can go a long way to reducing your lifetime payments on loans. "Read all instructions first", and make sure you have a good idea of how much extra you can send and how they will respond. Some places will only accept whole multiples of monthlies, and others will advance your next payment, which you likely don't want. Still others will save it and apply it later.  If all else fails, send in a double payment and see what happens. And don't sign on to loans that won't let you prepay.
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Apr 26, 2014 05:10
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100 HOGS AGREE posted:I only spend that much per month on groceries because my uncle is constantly making food and telling me to eat it. Half the time when I buy food and go to make dinner he preempts me and has dinner ready by the time I get home. I'm pretty fortunate with my situation here, what with the low rent and how much stuff I have access to in this house, enables me to save and put a lot more toward my loans than I could otherwise.  jeffsleepy posted:Sounds reasonable. Emergency funds are only for losing your job IMO. In all honesty, if you have a notable event arise that takes "one month of income" or more, it's time to seriously review and rebalance your funds. All those entertainment expenses? Gone. Those trips to the $100-a-pop restaurants? Gone. If you pilfer your emergency fund, expect to lower all your entertainment items to $10/mo until you've recovered. That includes cigarettes, movies, alcohol, travel, books, restaurants, toys, games, and anything else that might make your mother raise an eyebrow.
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Apr 27, 2014 02:57
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striking-wolf posted:How do people handle budgeting for 1-2x monthly day trips for pleasure? We're moving to a new area and planning on making trips to explore it every other weekend or so. The expenses for these day trips would be somewhere around $150-$200 each: a good bit of gas, two meals out, and other assorted expenses (tickets, parking, etc.). The considerations for budgeting these types of events are: The capabilities of your budgeting technique and tools, ease of entry, and reporting detail requirements. Using a mini-vacation category is sensible as you will then be able to pay money from that account into the others as needed: So much to fuel depending on trip length, food receipts that move money from 'trips' to 'pay the CC', and so forth. You will also have a good overview of your mini-vacation expenses over time if you record things this way, as you're not "hiding" all your expensive play time within your work/life-routine categories. On the other hand, much of this is pointless if you spend nothing on gas, eating out, and entertainment during the rest of the month. For example, the bulk of my fuel use goes to hiking, so I just have it listed in the gasoline category. Likewise, I hit a restaurant maybe six times a month, so I don't have savings for "eating out"; I'll use my "entertainment" account to cover drinks or excessive restaurant events. On the third hand, all of this is pointless if you don't have a goodly number of accounts to track things, or don't care about reporting or separating out the monies. If you aren't set up to be flopping money from food into CC-payment, and from entertainment back into food for drinks coverages, or from small trips to gas and food and cc-payment separately, then you'll either want to get set up to do it or avoid the whole issue entirely. As I like to frequently remind people, however, people did all this stuff with hand-written ledgers quite successfully for a good number of years, so it doesn't really take that much work.
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Apr 27, 2014 17:44
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RS_Mir posted:cash flow... sort of what I was doing previously, however without the tracking I am now doing. I ended up spending to zero more often than not, so I decided to try the monthly option since it would force me to think ahead better. quote:Do I need to totally redo my budget to avoid this? My current plan is to borrow from the savings account to tide us over and pay the exact amount back once I am paid. Is this acceptable? Is there any way to figure out where exactly I failed at? 1. Write your monthly budget as though you get paid twice during the month. On months that you get that third paycheck, all the both of them, woot extra. Benefits: You have guaranteed a minimum monthly available. Problems: You're likely to waste your two 'extra' paychecks on superfluous things, and your budget will look tighter because you're actually earning more money than you've budgeted. 2. Write your monthly budget as the monthly average. You get 26 paychecks a year, so you're really earning 2.16666 paychecks per month. Benefits: You're paying heed to your actual earnings, so you have an extra 8% you can budget per month; that's not be sneezed at. Problems: You can't pilfer your accounts because you'll run out of money at some point in the future (but this would be true in case #1 as well). You might like to think there's an alignment issue, but... not really, because: All techniques suffer from a bootstrapping problem. Until you have saved one month's worth of budgeted income in a line item, you probably can't pay the bill for that item. If you started from flat broke, $0 of cash and savings, got two bimonthly paychecks on the 15th and last day, you'd have money to pay rent on the 1st. But if you had to pay rent on the 25th, you'd be screwed. What you would do is start your line item with half a month's income so that the paycheck on the 15th would push it up to the point where you could pay the bill on the 25th. You have to do the same thing with your biweeklies. If you have enough money in a line item to pay the bill when it next comes due, and you've budgeted for at least that amount of minimum income per month (on average), and you don't pilfer that line item for any other spending, (and you get paid at least monthly), then you're guaranteed to have sufficient funds when the next bill arrives. All you have to do is ensure that there are funds available when the bill comes due. Example: Phone is $85/mo paid on the 20th. You get paid 5/9 and 5/23 and save exactly $85/mo average for the whole year. (Working in reverse, that's 12*$85=$1020/yr or 1020/26=$39.24 per paycheck, rounded up). On 5/9, you'll allocate $39.24 to phone, which means you'll be $85-39.24=$45.76 short when the bill comes due. Your only choice is to find that money before the bill comes due, so you move some of your savings to that account now. You pay your bill on the 20th, leaving you with a balance of $0. On 5/23, 6/3, and 6/20, the balance raises to $117.72 and you pay the $85 leaving you with $32.72. If you now say, "I have $33 to spend woo!" and empty the line, you will not have enough money when the next bill comes due --- you'll be $6.52 short --- so don't do that. In fact, if you have $0 on 5/20, you expect to spend exactly $1020 and earn $1020 in the next year, so you should be at zero 5/20/2015. If you steal any money from that line for other purchases, you have to go negative at some point. The same applies for those quarterly and annual insurance payments. You must have sufficient funds when those bills arrive, so pad those accounts now, or save enough over the intervening months to make it and then adjust your budget to the monthly average afterward. So, trust your budget, trust your spreadsheet, and don't start flopping money all over the place thinking you're all clever. Get those bill payment line items started with sufficient funds, budget with good monthly averages, and you should do just fine. Advanced budgets include extra per line item for inflation, variation in bills (rent is constant, but most things aren't), and saving for your "six months' ahead". More advanced tracking permits you to move exactly the correct amount from each line into a higher interest bearing account while maintaining the minimum needed for bill payment.
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May 3, 2014 00:35
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GAYS FOR DAYS posted:Wasn't there a "share your budget" thread, or is this now the defacto share your budget thread?
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May 4, 2014 19:33
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GAYS FOR DAYS posted:So I think after about 4 months of tracking my income and outflows I've set up a pretty good budget that works for me, but I'm fairly new to the whole budgeting thing, so there may be some things I have forgotten, or that stand out as strange. I'm mostly just looking for input. I have no revolving credit card debt. I pay for most things with my credit card, but pay it in full every month. I'm paying off my student loans using the debt snowball method, but I also am trying to get my emergency fund to at least $5000. Regarding your debt repayment technique, it's going to take you another ten months to snowball off the first loan, and the other payments look to be five to ten years of scheduled repayment. Given the time requirements, you may want to consider repayment based on the highest interest rates first. If they're all 3%, it doesn't really matter, but adding $50 to an 8% loan of $5500 saves you roughly $185/yr over four years. Likewise, regarding your emergency fund, there's this: PhantomOfTheCopier posted:There is one major benefit to having debt in the form of student loans: Most lenders allow you to prepay (check your agreements!), meaning that you can send them a double payment and you won't have to pay them next month. This is, of course, a bad plan, because you'll still get charged interest for that month, but you will have lowered your interest and, if you're lucky, some of your principal, just a tad earlier. That is, sending $2000 to an 8%/$5400/$85mo loan today saves you $1000 in lifetime interest.
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May 7, 2014 00:16
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Rurutia posted:I need a fresh set of eyes on my budget. I've been staring at it for 2 days and not sure if I'm happy with it. We're trying to balance ... [many things] The one area of your budget that might benefit from some improvement is a recategorization of your discretionary expenses, or perhaps a category for capital expenses. For example, let me attempt to remove your routine bills and see what's left: code:Second stage, don't be disillusioned about your choices: You have $1413.89 monthly in discretionary spending, which amounts to 30% of your monthly budget, or 16% of your annual, post-tax income. Supposing, for the sake of argument, this value is an accurate reflection of your available discretionary budget, you have chosen to allocate your discretionary income as: code:Looking at your percent balance of discretionary income is one approach. The other, which is left as an exercise to the reader, is to review the estimated time to goals, of which you've already started. If you put off the big trip two months, you can have the BGE this summer (pretty much, assuming you're in the northern hemisphere). If you both decide the engagement ring is a higher priority, you could each agree to take $25 from your monthly personal and have it that much sooner. Sooo... I'm not sure how fresh a pair of eyes just went over your budget, but that's what they saw. You're doing well; how much longer do you have time for all of it, and what's most important?
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May 7, 2014 04:40
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Rurutia posted:(Money)  Those with lack of impulse control should NOT attempt this. Also, three posts in a row in a thread I started?... wth not.
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May 7, 2014 05:00
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22 Eargesplitten posted:
Regarding emergency savings, this is one of those cases where I'll advise against it. You need enough money in your account to pay your bills in a timely fashion --- don't miss a payment, ever --- and otherwise everything you're calling "emergency savings" needs to go to your credit card. In other words, if you have an emergency, it's going on your credit card anyway, so you might as well not be carrying any more interest-bearing accounts than necessary. For "discretionary savings", it sounds like you're talking about capital expenses, capital improvements projects, and long-term savings goals. Sadly, $200/mo is likely a bit too much there at this juncture. A $4000 CC at 18% costs you $60/mo; you need to get out from under that before it happens, or be as close to a $0 balance as you can handle when it does flip in. Don't empty your bill-payment savings account, of course, but seriously, seriously consider what you need to be buying. Does your computer function for things that you need to maintain your life and well-being? If you find that your life demands $50-a-pop computer games, you need to construct an acceptable plan to reach your goal: "I will save enough to buy that motherboard in four months" or "I will start off buying one new game every ten weeks". Money is tight; use it well. Charity: Save $10/mo and try to find one nice charitable giving every few months until you get that CC out of the way. Maybe use a bit to be nice to your roommates so they don't kick you out. :} Discretionary spending: Do all your drinking of alcohol at home alone. Drinking at bars and restaurants is beyond expensive. (Yeah, that's a random suggestion; it depends entirely on your situation.) Um, restaurants... yeah they are expensive. Try to plan one restaurant run a week, learn to cook, etc. Coupons, at the grocery store, search online, anything. Auto insurance, clothes? You don't need to drop discretionary to flat zero, but think of what you could do with $60 each month. Maybe make it real tough on yourself for a few months, destroy that CC balance down to the $2000 mark, and then review your budget, ease back a little bit, reward yourself for being a good steward of your resources, for learning how to live with what you've got even if it isn't the shiny new toy everyone else has, and so on. Once the rent goes up, you won't want to still have all that CC debt sitting around too, because then you really will have no discretionary money. Good job starting with 25% of your income going to debt reduction! That's much better than many people have when they start a budget, so you're in the right place.
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May 9, 2014 00:32
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22 Eargesplitten posted:Does that all seem reasonable? That should put me clear of the CC in 4 months like spwrozek said, and I can go back to just using it for rewards points at the grocery store and gas station like I intended. And with mint I can make sure I'm not going over on those either. Remember that few budgets are static but they all need to be realistic to be useful. If you feel you can handle this arrangement psychologically, then go with it for a few months and review. Maybe the expiration of that 0% is a good marker? There are debt repayment calculators online that will help you discover just how much interest you'll be paying on the remaining balance, and you can investigate different monthly payment scenarios at that time. Once the CC balance is nearly gone, you'll be in a good spot to determine how much can start going into your emergency savings fund, how much extra to your student loans, and how much is left for those capital expenses. You'll also have half a year of tracked expenses at that point, so you'll be in a better position to evaluate your actual monthly expenses. Let us know if you have more thoughts or questions.
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May 9, 2014 07:34
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While you're waiting around for the best deal of your life, don't let us stop you from trying any of the free methods or techniques of budgeting, about which people here are giving out free advice.
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Jun 28, 2014 16:23
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Killmaster posted:Background: I'm 28 and support my wife and child on a single income.... There are quite a few things you could do to improve your situation, but much depends on "how you operate", your willpower, the ability to separate needs from wants, to plan for the future, and so forth. Thusly, I believe I can only offer random observations: Starting from the top, if you have natural gas, you should have no electric bill. Right? Well, it shouldn't be $120 for a two month period because that's my highest electric bill, and I live in a Seattle apartment with baseboard heat and it's only every $120/mo when it's... right now,  ing 85F outside and I'm running my air conditioner constantly just to prevent myself from exploding. Ask yourself where all that electricity is going, and then ask how you can cut back for the environment a little bit. Or at least so those of us without gas can actually... you know, not suffer from power outages caused by people with gas. Honestly, shouldn't it be like $20/mo?Phone. $170. You already have an Internet line. WTH. Shouldn't you have a corporate plan saver discount or something? That's $2000 per year. Think of something better to do with that money. Fitness, likewise $170. Is that all "fitness food", powders and such, or one-time expenses for equipment, or random purchases at the front counter of a gym? Why is it $150 over? Shouldn't that be viewed as entertainment/fun? All these random 'givings' categories... maybe you should combine them and start accruing some savings for those purposes, and then decide when it's reasonable to make use of them. Charitable, gifts, friends, greeting cards, and maybe even Christmas. Based on your current report, it looks "way too easy" to just add another category, throw up your hands and say "Oh well, I guess we'll recover that red item eventually!" I agree that you need to separate out food from non-food, so diapers get moved out, along with the random coffee that you buy in the grocery store, and maybe even all those paper towels (household goods) too. I have no reasonable estimate for diapers, but you're at $1150 for food+diapers right now, and that is... somewhat excessive. I do hope you're eating nothing but buffalo burgers and turkey breast with that kind of money. Whole Paycheck is expensive, but it certainly depends on what you buy. How much food are you throwing out? In all honesty, if one of you is at home full time, there's plenty of time to research food and product prices. The Internet is full of coupons, and you should be stocking up items when they're on sale, instead of buying them one week later when they're full price and you just realized you needed more. I'm not in a shared budget situation, but you really need to sit down and agree on the basic expenses, then probably the "family extras", and then figure out how you want to divvy up the fun money. We've seen a lot of fun money split evenly to each party, couples that are happy to include items that are out of balance because they know it vastly improves the other's health/mood/performance/whatever, but you really need to talk about it in terms of what is possible before you start having a contest. From $5000/mo, after those basic bills (at their budgeted amounts), you have $2464/mo. That's a lot of money. Supposing $750 for used groceries and diapers, and $150 for restaurants, that leaves you $1500 for all the other things. Now then, how much did you want to spend on frivolous entertainment? That's all you get. The rest goes to home, car, vet, medical, and so forth. The entertainment includes: Entertainment, newspapers, spending money, clothing, and so forth. Again, as you are likely in no position to claim just how much it's worth for someone else to get their hair cut every seventy three hours, it can often be beneficial to separate out some of the funding so each person gets their own allowance. I'd like to see your budget start some provisional savings now, so you can say that some percentage of the budget goes directly toward your normal expenses, and only a certain amount of it is used "just for emergency savings". You have to whittle yourself down from seeing "100% of the bonus is my emergency fund". Sorry, I guess I'm asleep. The composition of my post sucks.
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Jul 11, 2014 00:33
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Killmaster posted:... Clothing is high this month, wife did get a whole bunch of stuff though. Though it's self serving, I must suggest that you start by reading the OP in this thread. The important part of budgeting that you're missing is your plan for the next six months (or a year). If your stock vests every six months, and you intend to make that an integral part of your financial planning, perhaps you should use a six-month period for your budget. As mentioned earlier, you should start shifting your savings toward your monthly income, so you can reserve a good portion of the stock for capital expenses such as home repairs as clothing replacement runs for the kid. In particular, you need to itemize not just your planned expenses, but your savings for those expenses. Clothing is a good example where you should be saving monthly, but, perhaps, only spending every two or three months. If you decide to save $50/mo, then you don't go buying the $150 suit until you've saved for three months. Likewise with a category such as food, decide the maximum you should spend in the next six months and stick to it. Any carry-over should be reserved to cover inflation and increased food prices, not instantly spent "just because it's there". (In that sense, if you, as a couple, have no collective will-power to save 'food money', then keep the emergency savings for that category separate.) The other difficult decision is where to position the stock in your budget cycle. If you start your budget cycle with a large balance, you may decide that you have that much more money to spend monthly, and you've saved nothing. If you end your cycle with that large income, you may decide to spend it all on the most recent project, instead of deciding that you can hold out for a few more months. Dealing with it in the middle might be more complicated, computationally. There's no clear answer here; it all depends on your style. How to begin? Turn off your computers; get a few pieces of paper and a hand calculator (or abacus). Heck, you can start with $5000 in poker chips in $50 increments if you want. One one piece of paper you put the necessary monthly expenses, namely those bills, not forgetting that mortgages change and prices increase (so perhaps you ought to put in 2-4% extra each month to cover that?). After you've met the minimum monthly expenditures to sustain life and basic comfort, you start talking about what remains. Once you have your plan, you stick to it for your budget period (6mo?) unless you have a life-changing event or an emergency. If you end up $37 over on food one month, that's $37 less that you get to spend the next month. Yeah, go read the OP. You need a budget.
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Jul 11, 2014 06:56
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linuxgoober posted:I work for tips varying from $50 to $150 a day. Does anyone have good advice on budgeting when incomes vary? Technique One: Each time you get paid you take the expense to earnings ratio and drop it into your bill payment accounts/jars/envelopes. With the above numbers that's 83.3%, or $50 out of every $60. If you make $80 one night, put $50 towards the bills, keep $10 for 'everything else', and stash the last $20. When you earn $100 the next night, you now have $120 total to apportion, giving you $100 toward bills and $20 toward 'everything else'. This approach requires you have enough to pay the bills when they come due, so you need at least a minimal starting buffer in each account. You could divide monies weekly and then limit your 'extra' spending to the cash you have on hand that isn't allocated to bills, or decide to stash away a bit extra for bills because you know the coming week will be light. Technique Two: If you have no buffer, you have to work to create one. Allocate all income to the highest bill next due until you have the funds, then move to the next in the sequence, and so on. When you've completed one full cycle you start back at the beginning, even if that bill hasn't come due. Once you've made it back to the beginning, however, and you're saving for "next month's bills", you can use money at the end of each cycle for 'extras'. This approach is difficult to quantify because you'll have some other daily expenses that need funds, so you'll want to go into "emergency savings" mode until you get on your feet. In particular, holding off on the extras, being very cautious with food expenses, reducing entertainment costs, and even little things like turning off computers during the day, can be the difference between six weeks and six months to financial happiness. Technique Three: Your buffer is up and you have good estimates of your average earnings and expenses. Go full percentage budgeting on your income. Whether you earn $50 or $160, it all gets divided by the budgeted percentage into categories. You review your budget every month (at the beginning, or every couplefew months later) to determine if you're building up too much buffer, which permits you to shuffle a few percent between categories on your budget. Accounts always hover ahead by a fixed amount, over the course of several months, or even annually, based on the long-term variations in tips and the little nudges you apply to the budget.
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Jul 11, 2014 08:51
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