How to Create a Budget

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > How to Create a Budget

Magnetic North: Dec 15, 2008; Beware the Forest's Mushrooms

I am creating a serious budget for the first time in ages. I don't know if I want to talk about the specific numbers on the web, and besides many of the numbers are cruel, high estimates meant to frighten me. Still, I was hoping to get another pair of eyes to make sure I hadn't missed anything glaringly obvious. These are the items I have listed:

401k
Car Insurance
City Taxes (For whatever reason, it seems like state and fed are folded into mortgage when people do these budgets for some reason? At least, from my googling. I guess that might be because it's fairly constant and directly affects how much home you can get, while the city taxes are variable.)
Electricity
Entertainment (aka mostly eating out with friends because I am the worst)
Gasoline
Groceries
Heating Oil
Natural Gas (not honestly sure if I should have both gas and oil? I guess I thought that was correct when I made this a few days ago)
Internet
Phone
Sewer
Student Loans
Water
Work Lunches (because did I mention I am the worst)
Misc Savings (put this down as 10%, also probably dreaming).

Things I know I am not forgetting:
Mortgage / Rent Payment (this whole exercise it to find out what housing I can afford)
Car Payment (I own my car)
Credit Card Debt (I use it but pay it each month, so I am carrying no month-over-month credit card debt. Maybe I should add the monthly hit from the APR? I don't know if it applies if you pay in full. That seems like a fact worth knowing.)
Pet food (no pets)

What am I forgetting?

# ¿ Sep 6, 2017 00:05

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# ¿ May 12, 2024 02:05

Magnetic North: Dec 15, 2008; Beware the Forest's Mushrooms

H110Hawk posted:

Annual expenses. Do you have AAA? Life insurance? Car registration?

I also found it useful to open a 3-month window on my use-for-everything credit card and spot check my values. Then for my "everything else" line I have my average monthly balance, I subtract out the budgeted things which I pay for on that card (groceries for example.) This leaves me with a number that is out of budget money.

PhantomOfTheCopier posted:

You can easily post your budget here: Option one, build your percentage budget and post that (see OP).

I'll take all this in mind and probably come back with a percentage one.

# ¿ Sep 6, 2017 02:22

Magnetic North: Dec 15, 2008; Beware the Forest's Mushrooms

Here is my percentage budget. Some of it is based on approximations. As for the amount, let's just say are within 10% in either direction of the average income in MA (which google says is 67.8K, so 60k to 75k).

code:


Non-401k Deductions (health ins. etc)	27.0%

Life
Groceries				3.0%
Lunches					3.7%
Entertainment / Meals with others	6.0%
Phone Plan				0.7%
Credit Card Payment			0.0%
Misc crap				0.6%
Monthly Student Loans			2.1%

Subtotal				16.1%
Running Total:				43.1%

Car	
Payment					0.0%
Gas					4.9%
Insurance				1.4%
Misc Car				0.3%
Oil Changes				0.7%

Subtotal				7.3%
Running total				50.4%

Utilities (almost all estimates)
Electricity				1.6%
Water					0.6%
Sewer					0.6%
NaturalGas				1.0%
Heating Oil				1.9%
Internet				1.9%

Subtotal				7.6%
Running Total				58.0%

The Future
Ideal 401K				20.0%
Ideal Normal Savings			5.0%
Highest Est. City Taxes			6.2%

Subtotal 				31.2%
Running Total				89.3%

The exercise here is to see how much house / rent I can afford. Lunches, Gas and Oil Changes will change because I intend to be much closer to work, but for now I am going to budget as though they will not go away. Also, yes the entertainment meals needs to go down. I normally cover when I go out, but it's only 1 or 2 others. After that, breathing room can come from that 25 % savings and possibly not getting whacked for multiple thousands in city taxes, but I just found the highest rate around and stuck it in. I guess savings, deductible taxes, and mortgage payments could be described as different forms of 'paying yourself' depending on your outlook. Basically, I intend to put as much as I can in there but I also want to maybe get a house.

# ¿ Sep 10, 2017 21:31

Magnetic North: Dec 15, 2008; Beware the Forest's Mushrooms

Thanks for the comments. To everyone complaining about percentages: Sorry. I have a thing about revealing personal information online, even pseudonymously. It took a lot to talk myself into doing even this much. Sorry if that's crazy.

PhantomOfTheCopier posted:

The excess of food things cannot be overstated. You're running 12.7% on groceries, lunches, and entertainment. That's a lot. You'd be better dropping that 2% and doubling your student loan payments.

Ashcans posted:

Yea, the fact that you are paying as much for lunches as all the rest of your groceries is probably not good, and you are paying twice that again on eating out and entertainment. You should probably look at that to get some of it under control.

Yeah, I had seen it as a dollar figure going before posting this, but seeing this as a percentage is pretty startling. Gotta do something about that.

I had also thought about doubling the student loan payment, but that did not factor into this version of the budget. Although I have also thought about just paying the whole thing off, since I have enough saved to do it, but then I can't even pretend I have a down payment on a home.

Ashcans posted:

What is going on with your gas? Based on the ballpark, it looks like you're spending something like $250-$300 a month on gas for your car. I don't know if there is anything you can do about that, but it should be on your mind.

Yeah, that's about right. The estimate this is based off of is 96 gallons a month. That will go down when I move, blessedly, but who knows by how much, so I'm leaving it for now.

Ashcans posted:

You don't seem to have any amount pegged for shopping - stuff like clothes, hobbies, etc. Unless that is coming in under 'Misc Crap' and 'Entertainment'.

I really don't spend much money on durable goods, and what I do I put under those two. I'm a cheapskate (except when it comes to :burger:

I guess) and I hate when I look at a possession that I don't use. You're right that I should have added clothing to the budget somehow, but I don't buy frequently enough to even hazard a guess. I'll do some googling and try to get an estimate.

# ¿ Sep 12, 2017 00:03

Magnetic North: Dec 15, 2008; Beware the Forest's Mushrooms

Thanks for all the input.

Ashcans posted:

I'm going to move off your budget for a second to talk about what your goals are here. You don't have any rent/mortgage in this calculation, so I assume that right now you are living with friends/family/under a bridge to avoid that expense - but you're also talking about possibly buying a place? Not sure what exactly your life situation is, but I am always hesitant about people jumping straight from 0 - 100 like that. Renting isn't a waste unless you're getting ripped off, and it can give you a chance to test out different neighborhoods and living arrangements before you buy anything. Before you buy something you want to be really sure that's a place you are going to be happy living with for a while. This also works financially - if you bite off more than your can budget, as a renter the worst case scenario is to just stick it out and move - if you buy a place, its a lot more painful. Maybe you already have this all worked out, I don't know!

I should say about my goals: what I want most of all is a shorter commute. All the rest is basically secondary. I've commuted over 30 miles for ten years. I want those hours back. I want to not have my private part of my day ruined because there was an extra 45 minutes of traffic randomly or because I had to stay late. The problem is that rent is goddamn crazy in MA. There is a big place just minutes from my work but it'd be 32% of my net income, and I've heard it's not supposed to be over 30% of your gross but it is still super tempting.

I've been posting on SA and talking to friends in an attempt to find discouragement because my inner coward wants me to rent but my inner romantic wants to buy (and my inner financier is telling to do it for various true and untrue reasons). I am under no financial illusions about renting like my loving boss trying to convince me that renting is 'throwing money away' :jerkbag:

(Sure, I get it, a house is often better but renting is fine.) What is annoying is I can't get any renters to loving return my calls or emails. That's how I got into thoughts of buying; I got tired of getting ghosted by people who I was going to give thousands upon thousands of dollars to. I guess I'd just be trading landlords for realtors at that point.

This budget might just be the discouragement I was looking for. I am very probably not financially mature enough to buy a home.

Ashcans posted:

One of the big first steps on budgeting is just realizing where your money is going, so you're off to a start. Now you get to work out what you really want to be spending. I found that lunches were really my worst value spending - they tended to be expensive, but weren't really so much better for that cost than packed ones. I was spending a bunch of money to basically not have to bother with a few minutes of work. Once I started realizing how much money was getting flushed away like that, it was easier to switch habits.

When I started working again, I was going to be good. I was going to pack lunches... but being a student eating peanut butter and banana sandwiches every day for years just killed it for me. Still, I need to man the gently caress up and eat my baggie full of poverty and sadness. At least more frequently than never.

PhantomOfTheCopier posted:

Percentages are easy and good, as you learned instantly when you ran the numbers and saw how much of your life is going to entertainment. It's the goon readers responsibility to put their monthly in and see how it compares to their life.

Yeah, like every day lunch is X or 1X bucks, but you take home XXX bucks every week, it's easy to not think of it. The percentage made it pretty clear.

PhantomOfTheCopier posted:

You might need more for the car if there's maintenance coming up, particularly if it's an old car and you put so many miles on it.

My car is unusually low mileage (or it was until I started putting so many miles on it), but yeah, I should add that somewhere in case of an accident if nothing else.

PhantomOfTheCopier posted:

Don't bottom savings to pay a student loan. If your loan interest is good and double payments delay your next payment (check paperwork or try it with a single extra payment) then you can delay payments in an emergency, but you still need your savings during the emergency. If burning 20% of your savings drops your lifetime interest considerably, it may be worth it.

(To be clear, when I was paying student loans, in January I sent double and didn't owe until March. In February I sent double and didn't owe until May. Right before I paid it off my next due date was fifteen years away.)

I was wondering why it said there was only XX bucks due this month, because I payed an extra hundred instead of literally double. In your case, how did that work out for you as far as interest saved, if you know?

PhantomOfTheCopier posted:

As to possibly-missing categories: No pets? Extra, routine health expenses not covered by insurance? Hobbies not covered under miscellaneous? Monthly parking fees for the commute?

Nope, unless you count eyeglasses, but I just got new ones recently and don't intend to replace them for several years if I can avoid it. Still, they were 500 bucks so maybe a glasses fund should go into the budget.

# ¿ Sep 12, 2017 23:24

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > How to Create a Budget