How to stay on a budget?

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notmyhand
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How to stay on a budget?

Post by notmyhand » Mon May 15, 2017 9:35 pm

We are trying to cut down on expenses and increase savings.. However, we have never had any luck sticking to a budget since we generally have enough left over to max our tax deferred accounts and some leftover.

We have tried two different ways:
1. Make a budget. We stick to it for a week or two, then realize we have something we didn't plan for like a medical procedure, the dog looks sick and should be taken to a vet, or something similar, and we say screw it and dump the budget.

2. Transfer all savings goal money out first, then try and live on the rest. Run out of the money in checking and something else comes up like dog food is needed a week early so we transfer back savings money.

We have tried excel files, YNAB, Every Dollar, and still use Mint but we track and organize things for about a week each month and then fall off. I'm reading "The Power of Habit" now to attempt to understand why we are so bad at this but any other tips would be greatly appreciated.

How do you succeed sticking to a budget?

Thank you for the advice!

ResearchMed
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Re: How to stay on a budget?

Post by ResearchMed » Mon May 15, 2017 9:52 pm

notmyhand wrote:We are trying to cut down on expenses and increase savings.. However, we have never had any luck sticking to a budget since we generally have enough left over to max our tax deferred accounts and some leftover.

We have tried two different ways:
1. Make a budget. We stick to it for a week or two, then realize we have something we didn't plan for like a medical procedure, the dog looks sick and should be taken to a vet, or something similar, and we say screw it and dump the budget.

2. Transfer all savings goal money out first, then try and live on the rest. Run out of the money in checking and something else comes up like dog food is needed a week early so we transfer back savings money.

We have tried excel files, YNAB, Every Dollar, and still use Mint but we track and organize things for about a week each month and then fall off. I'm reading "The Power of Habit" now to attempt to understand why we are so bad at this but any other tips would be greatly appreciated.

How do you succeed sticking to a budget?

Thank you for the advice!
Have you tried racheting the weekly/monthly total down slowly?
Each month, a small amount less?
(This probably won't work if you end up postponing necessary expenses to the next month, so try to avoid that syndrome.)

And also keep a special "We didn't think about this" fund for those "extra" things. :wink:
Or that could be shared with some discretionary spending, like eating out. Dog sick? No/fewer restaurants this month. Or something like that.

Are there any expenses where you could get an easier start by substituting less expensive choices?
More hamburger, less steak? But don't go cold turkey, er, cold beef (?), or you'll be more likely to have that rebound effect.

RM
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delamer
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Re: How to stay on a budget?

Post by delamer » Mon May 15, 2017 10:03 pm

I don't really understand this:

"However, we have never had any luck sticking to a budget since we generally have enough left over to max our tax deferred accounts and some leftover."

So you are maxing out your tax deferred savings, but you want to save more? Would additional savings be for a specific
purpose?

Expenses need to be looked at as annual things. If you try to do weekly or monthly budgets, it is too easy to miss irregular, but predictable, expenses like auto insurance premiums or the August week at the beach. Figure out expenses that occur weekly, monthly, quartery, semi-annually, and annually, then annualize all them. So if you plan to spend $100 per week on groceries, your annual budget is $5200. And it doesn't matter if you spend $135 this week, as long as your total is $5200.

Also, sounds like what you may need is a "life happens" fund -- a few thousand dollars set aside for those expenses that are unpredictable in type but inevitable in occurence. Things like the dog getting sick or a new windshield for the car.

6bquick
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Re: How to stay on a budget?

Post by 6bquick » Tue May 16, 2017 12:22 am

YMMV.

DW and I discovered we were spending WAY too much every month on our credit cards. (discover's year end statement was horrific). so we made a "budget". standard bills (student loans, cable, phone, etc. notwithstanding) gas and groceries go on card(s), and we take out "$X" every paycheck in cash. anything other than gas/groceries was paid in cash or online purchases were subtracted from future cash withdrawals. after about a year in, we've cut our monthly discretionary spending by roughly 50% and are no worse for the wear. while the cash thing is no fun, it's nice knowing you control your money and your money doesn't control you. there are always exceptions and unplanned expenses, like $1400 in municipal taxes, but you deal and move on. I think it's more a mindset than anything else. once you get used to not 'swiping' willy-nilly, it's really not hard to stick to a budget of sorts.
once again, YMMV.

blueman457
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Re: How to stay on a budget?

Post by blueman457 » Tue May 16, 2017 1:12 am

If you haven't do already, just track your expenses for 6 months. No budget, just track. Then come up with an annual budget that includes a life happens fund. Budgets are a long term tools, no weekly. But if you're trying to do weekly then you should stick to cash.

The "power of habit" is a great read.

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Re: How to stay on a budget?

Post by AlohaJoe » Tue May 16, 2017 2:36 am

notmyhand wrote:How do you succeed sticking to a budget?
It is pretty easy...
notmyhand wrote:We stick to it for a week or two, then realize we have something we didn't plan for like a medical procedure, the dog looks sick and should be taken to a vet, or something similar, and we say screw it and dump the budget.
...just don't say screw it and dump the budget just because you didn't get it perfectly right the first time.

"Don't give up when you hit a slight setback" is probably good general advice for everything in life, not just budgeting.

My budget had several big slush funds at first. I think I even called it "stuff I didn't think about the first year" in YNAB. The first time I went for a haircut after starting with YNAB I thought, "Oh yeah, I forgot to budget for this". So I put it in a slush fund at first and then adjusted the budget to have a better category. There were lots of things my first budget didn't have: car replacement fund, quarterly tax fund, end of year tax fund, bank fees for international wire transfers, new mobile phone every few years, a "toys" fund, unreimbursed business expenses, and so on.

And I still go over budget some times. I make a budget on May 1st and then on May 14th I hear about a one-night only ballet performance at the Opera House. Do I skip that just because I didn't include it in the May budget? No. I buy the tickets and I go over budget. Or I find some category to reduce. Do I beat myself up about not being able to perfectly forecast the future? No.

A budget isn't a game where you "win" if you stay under and "lose" if you go over. A budget is a tool to give you insights into your spending and help ensure that your spending is intentional.

heybro
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Re: How to stay on a budget?

Post by heybro » Tue May 16, 2017 3:56 am

I am really really good at budgets so I hope you can gain some help from my advice.

1. Track all your spending as a habit. Know where every penny goes. Put everything in categories such as 'food,' 'entertainment,' 'personal care,' 'dog expenses,' etc. The point of doing this is to be able to:

2. Prioritize what is important to you.

So, once you see you spend $3,000 every month on food, and $200 on entertainment, you might ask yourself 'but I like entertainment more!' Well in that case you can make your Entertainment budget be $800 and your food budget be $1500. Stop eating out so you can have that entertainment. This is just an example. Pick what is important to you. Maybe you like going out on your boat. You'll be able to not eat out since you can say 'It's OK, we'll be able to go out on the boat more by staying home to eat!' etc.

The other things are simple cost cutting measures such as:
Taking lunch to work.
Not eating out.
Getting netflix instead of cable.
Cutting back on cars or cell phones.
Having clear goals such as 'saving for such and such for 2 years and then after 2 years being able to increase the budget once that goal is reached.'
This is controversial but cutting back on credit cards can actually decrease spending. (It is harder to use actual money from your checking account and far too easy to spend 'credit' that isn't actually yours to spend yet.)

The other thing is to take each category in your budget and just go extreme in terms of brainstorming how to decrease it. What if we shopped at a different store. What if we bought generic clothing. What if we went to public parks instead of theme parks. blah blah blah. THEN, the trick is always to have that one category that you can blow a lot of money on because it is important to you....which will then make sacrificing in all the other categories worth it.

By the way, once you get used to spending less, it is easy to maintain it. It is all a matter of getting used to things. If you get a raise at work, live as if you didn't, etc.

Finally, if you always see unexpected costs come up, track what they were last year and include 'unexpected' as a budget category. Work that in so you actually will be under budget if nothing happens and on budget if something does. Throw it to your emergency fund if nothing happens for that month.

Fox
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Re: How to stay on a budget?

Post by Fox » Tue May 16, 2017 7:20 am

Our household spending seems way too high, but we also have a lot of mandatory expenses.

I constructed a spreadsheet of all expenses and will analyze what we spent over the last 6 months, and then try to see places to save.

You are already saving a lot, so don't worry about it too much!

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BogleMelon
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Re: How to stay on a budget?

Post by BogleMelon » Tue May 16, 2017 7:28 am

If you tried YNAB and didn't stick with it, then probably you used it as a software only, while YNAB is a software and methodology. I use YNAB (classic) successfully for over a year and a half year.
The good thing about YNAB is that it knows that life happens, and it is has a solution to overspending in a category. Just go and see their forum, and ask questions, it is pretty good one too
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dsmil
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Re: How to stay on a budget?

Post by dsmil » Tue May 16, 2017 7:40 am

I think it's about creating a realistic budget and tracking your expenses. If a visit to the vet throws off your budget, than it's not a good budget. We've been keeping a budget for years now, and although it's annoying to write all of our expenses down, it helps keep us on track. We have a $500 per month random category that takes care of the random expenses (car repairs, medical expenses, etc.). If we spend more than this in a month, we then carry over the overage into the next month, so we're always staying on track. The monthly budgeted savings then rolls up into an annual savings plan, where we also add in my bonus, vacations, and more costly random expenses that we couldn't realistically put in our monthly budget.

livesoft
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Re: How to stay on a budget?

Post by livesoft » Tue May 16, 2017 7:56 am

notmyhand wrote:..., then realize we have something we didn't plan for like a medical procedure, the dog looks sick and should be taken to a vet, or something similar, and we say screw it and dump the budget.
Instead of saying "screw it", I think you need to come to this thread and ask for permission to screw it. That way, random anonymous folks on the Internet can tell you No! or Yes! Better than that Orman person, eh?
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Jags4186
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Re: How to stay on a budget?

Post by Jags4186 » Tue May 16, 2017 8:04 am

As others said you need to look at things on an annualized basis. If this is the first time you've ever tried to budget (and I don't mean budget as restricting, I mean budget as knowing where all your money goes) then you probably don't have a good idea of your irregular expenses.
notmyhand wrote: 1. Make a budget. We stick to it for a week or two, then realize we have something we didn't plan for like a medical procedure, the dog looks sick and should be taken to a vet, or something similar, and we say screw it and dump the budget.
What you should do is live 3-6 months without trying to "stick" to a budget. Record every penny you spend. Then you can use that to project out on the year. This will allow you to go more than 2 weeks without deviating. In fact, maybe do it for the rest of 2017 and then start the "new you" January 1. Then things like "we need to buy more dog food" aren't a surprise.
notmyhand wrote: 2. Transfer all savings goal money out first, then try and live on the rest. Run out of the money in checking and something else comes up like dog food is needed a week early so we transfer back savings money.
Reality this is what you should be doing and not transferring from savings. If you have a $200 bill for the dog that was unexpected, well you don't eat out the rest of the month, or you don't go to that concert you wanted to go to, or whatever.

Another thing to consider is how much you're spending and saving. You say you're maxing your tax deferred accounts. That to me means you're saving $47,000/yr. Is that 10%, 25%, 50% of your income? If it's 10% then you have a real problem. If it's 50% then the reality is there's a certain lower threshold you can live at. For example our basic living expenses are about $3000/mo. But we usually spend about $4000 a month. Right now we save more than we spend on a monthly basis. We track our expenses and if we start to go north of $4000 then we start to cut back--stay in on a Friday night and eat a frozen pizza vs. going out to eat with friends.

JohnFiscal
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Re: How to stay on a budget?

Post by JohnFiscal » Tue May 16, 2017 8:15 am

For me, there are always those "unexpected emergencies". But most of those are entirely predictable to some extent, maybe not "when" but "what" and "how much" are often predictable. Need tires for the car? no, that's not an emergency, that's planned for. Oh! Big insurance bill is due? No, that's not an emergency, that's to be planned for. 12 year old clothes washer broke down? No, not an emergency (not a financial one, at least), that's been planned for. Ran car over the curb and caused $600 damage (as I did this weekend), yes! now that's an "emergency" but I have funds for true emergencies like that (okay, as true emergencies go that is definitely 'first world problems').

So my point is that a budget needs to include funding for all these emergencies, big and small, that will occur this year, and next year, and 10 years out (is "retirement" an emergency? "whoops! I'm retiring next year!"). My technique is to maintain an electronic "envelope system" where some amount of cash is diverted out of each payroll into savings for these later expenses. I add up the year's-worth of such anticipated expenses, plus a kitty, then divide by 24 payrolls. Easy.

This is the essence of those stories I see so often about how the average Joe can't cover a $500 medical emergency. They don't have that emergency fund saved up. Yes, their income and expenses may not fully match up. So it's even more important for them to budget and make every dollar work for them. Just as it is for those who do have more leeway in their finances.

NorCalDad
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Re: How to stay on a budget?

Post by NorCalDad » Tue May 16, 2017 8:19 am

notmyhand wrote:We stick to it for a week or two, then realize we have something we didn't plan for like a medical procedure, the dog looks sick and should be taken to a vet, or something similar, and we say screw it and dump the budget.
We handle this with an emergency fund that we build upon each paycheck. Actually, I call it an emergency fund, but it's the account that our annual and unexpected costs come out of. That includes annual property taxes, annual insurance premiums and unexpected home repair costs. It's like an escrow account. That way, emergencies and annual payments don't upend one month's budget. The key is saving for these costs and determining how large a buffer you need.

notmyhand
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Re: How to stay on a budget?

Post by notmyhand » Tue May 16, 2017 8:22 am

Thanks for the advice everyone! We are currently saving 25%-30% roughly but I am trying to cut back on my work hours without hurting our savings so we need to do a better job of intentionally spending and spending less. We do have a four month emergency fund that I am trying to get to a six month buffer currently as well. I think quite a few of these suggestions will help so I'll be bringing these up with the spouse. Thank you and keep them coming!

jlcnuke
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Re: How to stay on a budget?

Post by jlcnuke » Tue May 16, 2017 8:46 am

My budget sheet has 2 columns for each category- Estimated and Actual.

This allows me to include a feedback loop in my budgeting process. I make a budget, then I track how well I stick to it. Thus I can adjust my budget (to include spending I missed or underestimated) and I can also adjust my spending (go out to eat less to save on the dining portion of it) until I reach my final budget. I find it takes at least a year to "dial in" a budget to include infrequent expenses such as those items you only pay once a year and an "average" slush fund saved each month for "other" spending. I've made some adjustments, but I got the blank budget worksheet I use back in college. If anyone would like it you can download a copy here http://gceenterprises.com/jlcnuke/blank_budget.xls

ray333
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Re: How to stay on a budget?

Post by ray333 » Tue May 16, 2017 8:57 am

I keep a chase acct with limited funds to cover monthly expenses - and that's it.

I move X amount into my Ally savings, and essentially forget about it. I move whatever's left to Vanguard. I'm young and still enjoy life - especially on the weekends, but I also live quite frugally (and healthy) during the week. I don't buy morning coffee, I don't buy lunch ... little things add up.

heybro
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Re: How to stay on a budget?

Post by heybro » Tue May 16, 2017 2:17 pm

jlcnuke wrote:My budget sheet has 2 columns for each category- Estimated and Actual.

This allows me to include a feedback loop in my budgeting process. I make a budget, then I track how well I stick to it. Thus I can adjust my budget (to include spending I missed or underestimated) and I can also adjust my spending (go out to eat less to save on the dining portion of it) until I reach my final budget. I find it takes at least a year to "dial in" a budget to include infrequent expenses such as those items you only pay once a year and an "average" slush fund saved each month for "other" spending. I've made some adjustments, but I got the blank budget worksheet I use back in college. If anyone would like it you can download a copy here http://gceenterprises.com/jlcnuke/blank_budget.xls
Good point! I'll often make a note of WHY something went over to also determine if it is likely to happen again or if it was just a blip.

heybro
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Re: How to stay on a budget?

Post by heybro » Tue May 16, 2017 2:19 pm

jlcnuke wrote:My budget sheet has 2 columns for each category- Estimated and Actual.

This allows me to include a feedback loop in my budgeting process. I make a budget, then I track how well I stick to it. Thus I can adjust my budget (to include spending I missed or underestimated) and I can also adjust my spending (go out to eat less to save on the dining portion of it) until I reach my final budget. I find it takes at least a year to "dial in" a budget to include infrequent expenses such as those items you only pay once a year and an "average" slush fund saved each month for "other" spending. I've made some adjustments, but I got the blank budget worksheet I use back in college. If anyone would like it you can download a copy here http://gceenterprises.com/jlcnuke/blank_budget.xls
sexy spreadsheet there brah

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DaftInvestor
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Re: How to stay on a budget?

Post by DaftInvestor » Tue May 16, 2017 2:24 pm

Go back and look at expenses across a full year to get a good picture before you put the budget down. You might normally spend $500 monthly on groceries but spend $750 in the month of November because you host Thanksgiving for an extended family. These items don't come to light without looking across a full year.
Also - if you are maxing out your tax-deffer-ed savings - maybe you don't need a budget - but simply need more discipline in what you spend your money on. I no longer live on a budget.

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Phineas J. Whoopee
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Re: How to stay on a budget?

Post by Phineas J. Whoopee » Tue May 16, 2017 6:24 pm

I suggest an annual budget with flexibility built in, and tracking so you can tell if you're on pace to spend it all by September.
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Kalo
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Re: How to stay on a budget?

Post by Kalo » Tue May 16, 2017 7:57 pm

I haven't read all the replies, but here's my experience and advice.

Start by using prior year's actual expenses. This helps avoid missing items you should have budgeted for. From that starting point, make adjustments, but be careful to remain realistic. Don't set your shoe budget to zero just because you currently have a new pair of shoes, etc. If you have an item you really do not expect to have again, like a four thousand dollar vacuum cleaner you got suckered into and are now wiser because of it, you can remove that item.

Next comes how to use your budget. What do the variances mean? A negative variance is not necessarily a failure. It could be, or it could just be a normal variance that you understand and accept. Your budget is really a guide to how you are doing, so that rather than finding out you are off course when you file your taxes the following year, you can see it after three or four months and at least try to make a course correction.

If your budget is unrealistic, you are unlikely to be able to stay near or under budget. And if a realistic budget paints a picture of not enough income to support expenditures, then you may need to make structural changes to your lifestyle. Maybe sell your newer cars and drive used, or reduce vacation expense for a few years until income catches up with desired lifestyle.

One of the biggest question marks is how much to save for retirement, which is a subject of its own although very related.

This year I am over budget so far, but I think I have a chance to end up on target or maybe just a little over budget. Using a budget shows me where I overspent, and under spent, and allows me to make realistic projections about where I will be at the end of the year, and possibly to make course corrections. For example, I've taken a relatively inexpensive vacation already, and I probably won't be taking another one this year. But if I did, at least I would know the impact against my budget.

Hope this helps.

Kalo
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IMO
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Re: How to stay on a budget?

Post by IMO » Tue May 16, 2017 10:07 pm

What I personally find is the harder I track every expense, the harder I try to save more, the more unexpected expenses come up.

I wish I were joking ..... :annoyed

onourway
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Re: How to stay on a budget?

Post by onourway » Wed May 17, 2017 5:05 am

When I started budgeting with YNAB I really had no idea what our expenses were outside of the main items. Even still, it has been successful for us beyond anything I could have ever imagined. I had resisted strict budgeting for years because to me it has overtones of austerity. In reality it has turned out to be completely different - it is extremely empowering to know that you control exactly what you spend your money on.

The big thing for me was making sure to identify all major expenses that were less regular than monthly, and building them into our monthly budget. Previously we had used the 'pay ourselves first' method and kept a large pile of cash available at all times to cover non regular expenses. I used much of that pile of cash to pre-fund certain categories like car maintenance, house maintenance, etc. Now, 6 months in, we have a category for most things, but I never worried about it when I didn't because there was always money sitting in other categories that can be drawn from. It doesn't really matter if the dog gets sick and we haven't budgeted for that yet. Just pull the money from other categories to cover it. The budget still works when you do this!

This is the big lesson I've taken from budgeting this way. Budget categories are merely a reflection of *your* priorities. There is nothing wrong with moving money between categories (so long as you still have enough in the bills categories). Changing your priorities in real time, every day is fine. Over time you'll have enough experience and information to decide if eating out one more time this month is worth pulling funds from another category or not. The second big lesson is that this is ok because with a budget you are forced to acknowledge that you can only spend each dollar once. For me, this is the most important thing that comes from using the YNAB method. Previously, it was impossible not to mentally allocate our slush fund to multiple purposes. Now, every dollar is given one and only one purpose in the budget and, almost as if by magic, there seems to be a whole lot more of them to go around!

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Re: How to stay on a budget?

Post by spammagnet » Wed May 17, 2017 6:56 am

IMO wrote:What I personally find is the harder I track every expense, the harder I try to save more, the more unexpected expenses come up.

I wish I were joking ..... :annoyed
Consider making your categories more general, decreasing granularity.

Be less rigid about specific items as long as you're making big-picture items like savings goals and debt reduction (if any).

Be realistic about those goals. Not everyone can max out every possible tax deferral strategy.

The Wizard
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Re: How to stay on a budget?

Post by The Wizard » Wed May 17, 2017 8:01 am

I've never really budgeted.
The closest I came was two years prior to retirement when I developed a detailed spreadsheet itemizing all of my expenses, including such things as $500/month for vehicle replacement and another few hundred a month for "furnishings" replacement.
While this was a fun exercise, all it did was confirm that my basic expenses are well under control.

Instead of budgeting, you might consider things like:
1) develop a somewhat frugal nature; don't use "shopping" as a hobby.
2) maintain a higher checking account balance to buffer unexpected but non-emergency expenses. I used to try to keep my checking account​ balance between $2000 and $3000 after all routine monthly bills were paid. With increased travel expenses in retirement, I have increased my target checking balance...
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flamesabers
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Re: How to stay on a budget?

Post by flamesabers » Wed May 17, 2017 9:27 am

I'm not a fan of micromanaging my expenditures. Instead, I prefer to measure the health of my finances by setting goalposts for my money market account and the overall value of my investments. For instance, if the cash in my money market account starts to run low, I make a more conscious effort to save money until it returns to normal levels. If I accumulate an excess of cash in my money market account, I invest the excess in my taxable accounts. At the end of the year I compare the value of my investments to prior years and decide whether I saved enough money or whether I should try to save more for the next year.

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Re: How to stay on a budget?

Post by thangngo » Wed May 17, 2017 10:51 am

heybro wrote:I am really really good at budgets so I hope you can gain some help from my advice.

1. Track all your spending as a habit. Know where every penny goes. Put everything in categories such as 'food,' 'entertainment,' 'personal care,' 'dog expenses,' etc. The point of doing this is to be able to:

2. Prioritize what is important to you.

So, once you see you spend $3,000 every month on food, and $200 on entertainment, you might ask yourself 'but I like entertainment more!' Well in that case you can make your Entertainment budget be $800 and your food budget be $1500. Stop eating out so you can have that entertainment. This is just an example. Pick what is important to you. Maybe you like going out on your boat. You'll be able to not eat out since you can say 'It's OK, we'll be able to go out on the boat more by staying home to eat!' etc.

The other things are simple cost cutting measures such as:
Taking lunch to work.
Not eating out.
Getting netflix instead of cable.
Cutting back on cars or cell phones.
Having clear goals such as 'saving for such and such for 2 years and then after 2 years being able to increase the budget once that goal is reached.'
This is controversial but cutting back on credit cards can actually decrease spending. (It is harder to use actual money from your checking account and far too easy to spend 'credit' that isn't actually yours to spend yet.)

The other thing is to take each category in your budget and just go extreme in terms of brainstorming how to decrease it. What if we shopped at a different store. What if we bought generic clothing. What if we went to public parks instead of theme parks. blah blah blah. THEN, the trick is always to have that one category that you can blow a lot of money on because it is important to you....which will then make sacrificing in all the other categories worth it.

By the way, once you get used to spending less, it is easy to maintain it. It is all a matter of getting used to things. If you get a raise at work, live as if you didn't, etc.

Finally, if you always see unexpected costs come up, track what they were last year and include 'unexpected' as a budget category. Work that in so you actually will be under budget if nothing happens and on budget if something does. Throw it to your emergency fund if nothing happens for that month.


This is very similar to what I do. Budget is a tool to help me know where the dollars go and when I need to prioritize something that is important to me and my family. Budget may change frequently but my principle regarding living, saving, and spending stays almost constant over time.

LeisureLee
Posts: 132
Joined: Mon Jan 05, 2015 6:52 pm

Re: How to stay on a budget?

Post by LeisureLee » Thu May 18, 2017 12:07 am

What worked really well for me is having three main accounts - one for day-to-day costs (lunch out, gas, groceries), one for all regular monthly bills, and one for irregular things (vet, car registration, tax prep).

Don't deposit your paycheck into any of these accounts. Your paycheck goes somewhere else and you have regular transfers to the three spending accounts. That way, when you get a raise you aren't automatically encouraged to spend more.

If you keep regular monthly bills and irregular things paid from separate accounts, you don't have the "ran out of money and here's the power bill or a vet visit" problem. This means you can focus on the day-to-day costs you have the most control over. Also, transfer into the day-to-day account weekly on Fridays. This ensures your weekend errands like groceries and Friday night dinner out aren't the things you have to consider cutting if you're spending more than your goal. If you have a bad week or month, you can look back and see what happened quickly. If you have money left over in an account, transfer it to meet one of your goals faster (vacation? mortgage paydown?)

Good luck! Following a budget can hurt, but this way is the least painful we've found.

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MnyGrl
Posts: 18
Joined: Tue Apr 11, 2017 3:44 pm
Location: DC

Re: How to stay on a budget?

Post by MnyGrl » Fri May 19, 2017 9:22 am

When I feel like my spending has gotten out of control, I do a "fiscal fast" for a month, spending only on needs. Even my kids get on board with it. It is amazing how much you can save.

Using mint.com has helped me a lot as well - you can look at what you are spending on and tweak your budget based on that.

SheReadsHere719
Posts: 75
Joined: Fri Jan 06, 2017 7:28 pm

Re: How to stay on a budget?

Post by SheReadsHere719 » Fri May 19, 2017 4:38 pm

Jags4186 wrote:What you should do is live 3-6 months without trying to "stick" to a budget. Record every penny you spend. Then you can use that to project out on the year.
+1. Two more Mint tips that may help:

1. You can set a Mint budget as a rollover from month to month (Budgets -> Details -> “start each new month with the previous month's leftover amount”). This will help you get a sense of your spending on an annual basis and tune out the week-to-week fluctuations.
2. You can set transaction rules based on merchant, amount, and other factors (Transaction -> Edit Details -> Manage Rules). Once it’s set, Mint will remember and categorize accordingly. This can keep you from getting discouraged after your ‘week each month’ because categorizing will become more automated over time.

10YearPlan
Posts: 187
Joined: Tue Dec 22, 2015 2:58 pm

Re: How to stay on a budget?

Post by 10YearPlan » Fri May 19, 2017 7:10 pm

Full disclosure: we don't follow a budget and could probably benefit from some belt-tightening ourselves.
Do you have a goal with what you'd do with the extra money saved? If so, since you're already proven to be good savers, I'd set an account up with a specific purpose like Vacation Fund or New Car Fund or something and start putting money toward that before you have it to save. Start smaller, something you don't notice too much, and doesn't impact your lifestyle and then build up from there.

Another option is to take a look at the category(ies) in which you're spending the most money and aim to reduce one of them by say 10%. In our case, we need to stop eating at restaurants all the time. We're marginally successful in reducing that line item when we focus on it.

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