I've never budgeted sucessfully

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Lyra
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I've never budgeted sucessfully

Post by Lyra » Wed May 23, 2018 10:05 pm

I know how important a budget is, but I have never been able to do one. I've tried YNAB (and recommended it to another poster in this forum), and others, as well as small notebooks, etc. I fully realize it's not the budgeting tool that is the problem; it's me. I do it for a week and then don't follow through. Not because I don't want to continue, but because I forget to, or don't have time, or.....

I don't want to use Mint, as much as I like it, because it's just another vulnerability having all financial data out there.

I have also tried to set up an automatic system (Bach, Ramit Sethi) because that seems more straightforward and effective than a budget; fund everything that needs to be funded and what remains is to enjoy. But I've also never been able to set this up to because my incomes are from different sources and go to 4 different banks-with some automatic bill payments going out. It's really complicated and I don't see a way to streamline because each bank has a purpose (holding a mortgage, deposit account for tenants, etc)
So far I've only managed to make automatic deposits to Vanguard but I need to do much more to rein in spending. Thankfully we are not big spenders and have no bad habits but surely we could be saving much more.
Any ideas?

sailaway
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Re: I've never budgeted sucessfully

Post by sailaway » Wed May 23, 2018 10:23 pm

We use two credit cards and one bank account for everything possible. Most accounts these days allow you to download the information already sorted by category. By combining information from these three accounts, we track the vast majority of our spending. It was three credit cards and two accounts until recently, still very easy to track.

We generally do this once a year, but we have our spending dialed in at this point

runner3081
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Re: I've never budgeted sucessfully

Post by runner3081 » Wed May 23, 2018 10:32 pm

We have two spreadsheets.

First off, is the master budget sheet. The second sheet is a spending tracker.

Items that have a yearly cost that is consistent, insurance, mortgage, car licensing etc do not go on the spending tracker (simply updated yearly when prices change).

All of the variable items go on the tracker. By forcing yourself to record all transactions, you will be more aware of what you are spending.

LeisureLee
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Re: I've never budgeted sucessfully

Post by LeisureLee » Wed May 23, 2018 10:42 pm

We tried to budget but it was too much work. Instead, we have one debit card tied to a separate account for all day-to-day purchases (groceries, gas, meals out) and one credit card for irregular expenses (car maintenance, gifts, tax prep). We look at the spending account balance and the credit card balance to see how we're doing against our spending targets - just two numbers to check. All of our regular bills are paid from other accounts which have automatic transfers in which are big enough to cover them.

If you can just put all of the spending you have day-to-day control over in one place with one target limit, it's easy to track that. Get all of the noise out of the way.

delamer
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Re: I've never budgeted sucessfully

Post by delamer » Wed May 23, 2018 10:43 pm

Your post has a lot of “I should” and “I can’t” and “I don’t” statements but then you say “we” aren’t big spenders and could be saving much more.

So how is your significant other involved in your finances? How much is s/he cooperating with your savings goals versus making them more difficult to achieve?

Also, if complex isn’t working then it is time to simplify.

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White Coat Investor
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Re: I've never budgeted sucessfully

Post by White Coat Investor » Wed May 23, 2018 10:59 pm

Budgeting is a lot of work, but it's a commitment to your financial future.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

frugalmama
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Re: I've never budgeted sucessfully

Post by frugalmama » Wed May 23, 2018 11:33 pm

Lyra wrote:
Wed May 23, 2018 10:05 pm
I know how important a budget is, but I have never been able to do one. I've tried YNAB (and recommended it to another poster in this forum), and others, as well as small notebooks, etc.
I use YNAB and love it and it sounds like you saw some positive things about it too if you recommended it. It actually works really well for complicated income/financial life as mine is very complicated with various income sources so it can most likely work for you. Perhaps make a regular date with yourself - maybe 3x a week or 15 min. at the beginning of each day to input transactions, etc. in your budget? It seems like you are struggling to make it a habit.

teddytimtam
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Re: I've never budgeted sucessfully

Post by teddytimtam » Wed May 23, 2018 11:46 pm

Lyra wrote:
Wed May 23, 2018 10:05 pm
I do it for a week and then don't follow through. Not because I don't want to continue, but because I forget to, or don't have time, or.....

I don't want to use Mint, as much as I like it, because it's just another vulnerability having all financial data out there.
I agree, setting and checking budgets take a lot of time and discipline. What I would recommend is the exact opposite of keeping track of spending via Mint, etc.

You know your monthly NET income after taxes, 401k, Roth, etc.
Set monthly target savings and do whatever it takes to achieve it. When you see your funds grow each month, you'll naturally be encouraged to save more in order to make that number higher and higher.

I don't keep track of every penny I spend, but as long as I keep it under X amount (Net Income minus savings goal) then I am happy with that month.

22twain
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Re: I've never budgeted sucessfully

Post by 22twain » Thu May 24, 2018 2:02 am

Lyra wrote:
Wed May 23, 2018 10:05 pm
each bank has a purpose (holding a mortgage, deposit account for tenants, etc)
So you own rental property? In that case it might be helpful to keep your rental income and expenses separate from your salaries from work and your household expenses. Have all your rental-related stuff flow through one checking account if possible, or maybe two, and keep track of those separately. Transfer money occasionally to or from your household accounts, depending on which way the rental cash flow is turning out, and count that either as an extra "paycheck" or "expense" as necessary.
My investing princiPLEs do not include absolutely preserving princiPAL.

student
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Re: I've never budgeted sucessfully

Post by student » Thu May 24, 2018 5:25 am

I use to do a budget and keep track of my expenses. I stopped doing this a while ago after my friend made a good argument against it. His argument is essentially the exercise takes too much time and is not needed unless one is spending too much. These days, I use a simpler approach. After I put away the amount that I want to save, I am allowed to spend the rest.

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Tamarind
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Re: I've never budgeted sucessfully

Post by Tamarind » Thu May 24, 2018 5:52 am

The attraction of a program like Mint is precisely that it resolves what seems to be the core of your problem - aggregating income and expenses across many accounts, categorizing, and comparing them to budgeted amounts. Ie the "measuring" part of the budget.

Yes, your credentials are potentially at risk in a hack. Yes, the cost of the service is that you are helping Mint develop and sell a profile of your financial behavior.

However, is it worth it for a few months while you get a handle on your inflows and outflows? After it's done what it needs to you can delete your data and accounts from Mint which will limit potential damage.

If this is the step which is stopping you from budgeting, and budgeting is important to improve your financial outcomes, then maybe a purpose built tool is the right choice for a period of time.

carolinaman
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Re: I've never budgeted sucessfully

Post by carolinaman » Thu May 24, 2018 6:21 am

student wrote:
Thu May 24, 2018 5:25 am
I use to do a budget and keep track of my expenses. I stopped doing this a while ago after my friend made a good argument against it. His argument is essentially the exercise takes too much time and is not needed unless one is spending too much. These days, I use a simpler approach. After I put away the amount that I want to save, I am allowed to spend the rest.
We do not budget and never have. We are not big spenders and have been blessed with more than enough income for what we need. I do a spreadsheet at the end of the year to understand our spending. There are areas where we could cut back, but neither of us spend or waste a lot of money. We generally make good decisions about spending. We have never gone into debt except for home and cars, even when children were young and money was much tighter.

Some people need a budget so they will not overspend. I get that. Thankfully, we do not have that problem.

doss
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Re: I've never budgeted sucessfully

Post by doss » Thu May 24, 2018 6:25 am

Lyra wrote:
Wed May 23, 2018 10:05 pm


I don't want to use Mint, as much as I like it, because it's just another vulnerability having all financial data out there.
I have been using mint.com since I'd say 2009 or so. No problems or issues with security. I've spotted fraudulent charges on statements thanks to Mint because I probably would not have been as diligent over my finances if not for it.

However, I am a software developer and I am a little uneasy about how Mint aggregates my login details (although, I understand why they are an exception..read on). Normally, you want to send a user to authenticate with his bank ON the bank's website so that way NO passwords or logins are entered within the third party app (Mint, in this case). But, Mint requires the user to enter his details ON Mint, rather than send him to the bank. I understand why they do this because they are a billion dollar corporation with world class security (just like Google), but you run the risk of developing bad behavior for your users by requiring them to enter their bank details on a third party app --- this is how phishing happens. Any third party app can imitate or look like any bank (slap on Wells Fargo logo and some official-looking text) that it wants. The unaware user will happily enter his login details thinking that it's legit. The malicious third party app can capture those details. Remember how a few years ago the Democratic party got hacked -- this was because someone entered their login details on a site that looked like Google. It's SO easy to fool someone into thinking that they are logging into an official site (this is the #1 way how data breaches happen). Also, since you have a habit of logging into Mint, what if someone sends you a fake Mint email saying to 'click this login link' so you can update your data? On the flip side, you can't just keep sending your users to the different financial sites to log in -- too much of a hassle, and we want the convenience factor.

With all that said, I think that power or aggregating your finances in Mint outweighs the risk of the potential vulnerabilities.

onourway
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Re: I've never budgeted sucessfully

Post by onourway » Thu May 24, 2018 7:45 am

I spend between 0-15 minutes a day managing our reasonably complex budget in YNAB. I spent more than that for the first month while I figured everything out, but now it's pretty much on auto-pilot. On average it's probably 3 minutes a day.

Think of all the things you spend 3 minutes (or a whole lot more) per day on. I'm certain you can fit this into your schedule.

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GoldStar
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Re: I've never budgeted sucessfully

Post by GoldStar » Thu May 24, 2018 7:58 am

If you aren't big spenders and have no bad habits how do you think you can you save more?
If you aren't sure where you money is going you don't need software necessarily - you can limit all spending to a single credit card and at the end of the month (or end of quarter or year) dump the statement into a CSV/Excel file and review. Most credit cards have this function and some even make category guesses.

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lthenderson
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Re: I've never budgeted sucessfully

Post by lthenderson » Thu May 24, 2018 8:26 am

Lyra wrote:
Wed May 23, 2018 10:05 pm
Any ideas?
Do what I have done for years... budget your savings. Once you have the savings taken care of automatically through withholding or automatic withdrawals from a checking account, (and have an emergency fund) then your spending is limited to what is left and without bouncing a check, you can't over spend that way. At the end of every year, we adjust our savings as needed to meet the next years goals and proceed.

I honest could care less if the money I spend falls into a certain category and what the limit of that particular category is.

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pondering
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Re: I've never budgeted sucessfully

Post by pondering » Thu May 24, 2018 8:28 am

How much would it cost to outsource the process?
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alfaspider
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Re: I've never budgeted sucessfully

Post by alfaspider » Thu May 24, 2018 8:30 am

student wrote:
Thu May 24, 2018 5:25 am
I use to do a budget and keep track of my expenses. I stopped doing this a while ago after my friend made a good argument against it. His argument is essentially the exercise takes too much time and is not needed unless one is spending too much. These days, I use a simpler approach. After I put away the amount that I want to save, I am allowed to spend the rest.
I've gone to a similar method. I set annual savings targets, although I don't necessarily spend the rest if I exceed them I make sure to economize if it looks like I may not hit them. I found line-item budgeting tedious and frustrating, especially when done on a monthly basis because one-off events would tend to skew the picture.

That being said, I think line-item budgeting can be very important if you currently have a low or non-existent savings rate and need to figure out why.

scone
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Re: I've never budgeted sucessfully

Post by scone » Thu May 24, 2018 8:31 am

I don't budget and never have. My husband and I saved money up front, "paying ourselves first," and lived on the rest. Over time, we increased the percentage of money going into savings, and kept spending modest. It's been easy to save that way, since there's not much work involved, and little "lifestyle creep." That's what really derails people, IMO-- spending more simply because you've got the cash, expecting that spending will "make you happy." Money is simply a tool for getting things done, it's not a magic happiness potion.
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore

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stemikger
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Re: I've never budgeted sucessfully

Post by stemikger » Thu May 24, 2018 8:54 am

You don't need to budget. I never did. All you have to do is pay yourself first, then you can freely spend your paycheck on what you need to spend it on. I have the max taken out of my paycheck for my 401K and I also have 5% taken out for a liquid emergency fund. That's it, I spend the rest without budgeting.

P.S. I just realized another pay yourself person posted above me. It works!

For further clarification on this method, read the book The Automatic Millionaire by David Bach.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

GAAP
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Re: I've never budgeted sucessfully

Post by GAAP » Thu May 24, 2018 9:25 am

My first impression is a lack of organization or perhaps a surfeit of complication.

I would probably start with some mental accounting that separates your property management stuff from day-to-day living. IOW, create a property management business in your budget that then becomes an investment income stream for everything else in your budget.

Property management and personal expenses are fairly different activities with different requirements.

viz
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Re: I've never budgeted sucessfully

Post by viz » Thu May 24, 2018 9:31 am

Lyra wrote:
Wed May 23, 2018 10:05 pm
I know how important a budget is, but I have never been able to do one. I've tried YNAB (and recommended it to another poster in this forum), and others, as well as small notebooks, etc. I fully realize it's not the budgeting tool that is the problem; it's me. I do it for a week and then don't follow through. Not because I don't want to continue, but because I forget to, or don't have time, or.....
When did you use ynab? The latest version works like mint where you can import transactions by linking to your account. You use phone app to categorize. I have been using for 6 months. I don't go crazy if I overspend in one area, I simply move money from another.

I use the pay me first model for savings so ynab is more to understand our expenses and look for possible area of optimization.

Mike Scott
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Re: I've never budgeted sucessfully

Post by Mike Scott » Thu May 24, 2018 9:34 am

Literal cash in envelopes seems old fashioned and low tech but it is easy and it does tell you when you are out of money and after moving money between envelopes for a few months you know where it is going.

RetireBy55
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Re: I've never budgeted sucessfully

Post by RetireBy55 » Thu May 24, 2018 10:54 am

Not sure how you would know for certain what you need to cover in terms of expenses in Retirement without a budget.

We do ours in Quicken. Setting up the budget took some doing - creating the categories we actually would use, etc.

Tracking expenses and movement of $$s between taxable accounts like checking, savings, CDs, etc is the PITA (I don't use Quicken to track tax deferred investments as that doesn't hit the income/expense sheet, so I use FundManager for that). I don't / won't give my login info to Quicken so enter everything manually. And with numerous accounts it's a pain for sure - but I do know with pretty good confidence what we have to cover in terms of expenses in retirement, which to me is the "only" way you can retire with confidence.

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Meaty
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Re: I've never budgeted sucessfully

Post by Meaty » Thu May 24, 2018 10:56 am

I see several “pay yourself first suggestions”. That’s certainly not wrong, but the downside I see is you don’t know exactly how you’re spending your other dollars. I’ve been able to optimize that spending to the things that bring me the greatest happiness and away from trivial items by understanding where the spending is going. Of course, the downside is it requires more work

Just something to think about
"Discipline equals Freedom" - Jocko Willink

daheld
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Re: I've never budgeted sucessfully

Post by daheld » Thu May 24, 2018 12:15 pm

carolinaman wrote:
Thu May 24, 2018 6:21 am
student wrote:
Thu May 24, 2018 5:25 am
I use to do a budget and keep track of my expenses. I stopped doing this a while ago after my friend made a good argument against it. His argument is essentially the exercise takes too much time and is not needed unless one is spending too much. These days, I use a simpler approach. After I put away the amount that I want to save, I am allowed to spend the rest.
We do not budget and never have. We are not big spenders and have been blessed with more than enough income for what we need. I do a spreadsheet at the end of the year to understand our spending. There are areas where we could cut back, but neither of us spend or waste a lot of money. We generally make good decisions about spending. We have never gone into debt except for home and cars, even when children were young and money was much tighter.

Some people need a budget so they will not overspend. I get that. Thankfully, we do not have that problem.
This is what we do. We have a excel spreadsheet that we enter expenses into. It compiles totals based on how we categorize each expense. We do this monthly.

We have never budgeted in the sense that we lock ourselves into a certain amount per category. We did identify totals for each category that we think we should stay under. My main thing is to stay under the total monthly goal. I don't care if I "budgeted" $400 for groceries, but actually spent $550 if I also "budgeted" $150 for shopping/miscellaneous but actually spent $0. It's a wash. Mostly this monthly exercise is a great way for us, as a couple, to review the past month and look at ways we can continue to cut expenses. We are also fortunate to make enough to cover our necessities and save a good bunch of money, and we are also both very frugal by nature.

Golf maniac
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Re: I've never budgeted sucessfully

Post by Golf maniac » Thu May 24, 2018 3:16 pm

We use an excel spreadsheet and have categories for various items and amount budgeted each month. We pay our credit card bill and update the budget weekly (every Sunday). It takes us less than 30 minutes to update weekly. We have been doing this for over 20 years and it is simply a habit we have formed. It has allowed us to maximize our savings and retire early. It just depends on what you want and what you are willing to do to reach your goals.

jebmke
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Re: I've never budgeted sucessfully

Post by jebmke » Thu May 24, 2018 3:40 pm

lthenderson wrote:
Thu May 24, 2018 8:26 am
Do what I have done for years... budget your savings.
This is what we did. Spending was the residual. Sometimes we underspent and added a bit more to savings but the savings were sacrosanct.
When you discover that you are riding a dead horse, the best strategy is to dismount.

Accrual
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Re: I've never budgeted sucessfully

Post by Accrual » Thu May 24, 2018 3:47 pm

Meaty wrote:
Thu May 24, 2018 10:56 am
I see several “pay yourself first suggestions”. That’s certainly not wrong, but the downside I see is you don’t know exactly how you’re spending your other dollars. I’ve been able to optimize that spending to the things that bring me the greatest happiness and away from trivial items by understanding where the spending is going. Of course, the downside is it requires more work

Just something to think about
I agree. I pay myself first but closely track my expenses. This allows me to feel completely comfortable where my money is going. I believe this is priceless.

chuppi
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Re: I've never budgeted sucessfully

Post by chuppi » Thu May 24, 2018 4:20 pm

Lyra wrote:
Wed May 23, 2018 10:05 pm
I know how important a budget is, but I have never been able to do one. I've tried YNAB (and recommended it to another poster in this forum), and others, as well as small notebooks, etc. I fully realize it's not the budgeting tool that is the problem; it's me. I do it for a week and then don't follow through. Not because I don't want to continue, but because I forget to, or don't have time, or.....

I don't want to use Mint, as much as I like it, because it's just another vulnerability having all financial data out there.

I have also tried to set up an automatic system (Bach, Ramit Sethi) because that seems more straightforward and effective than a budget; fund everything that needs to be funded and what remains is to enjoy. But I've also never been able to set this up to because my incomes are from different sources and go to 4 different banks-with some automatic bill payments going out. It's really complicated and I don't see a way to streamline because each bank has a purpose (holding a mortgage, deposit account for tenants, etc)
So far I've only managed to make automatic deposits to Vanguard but I need to do much more to rein in spending. Thankfully we are not big spenders and have no bad habits but surely we could be saving much more.
Any ideas?
Luckily for me, it is not important to budget and stick to the budget. I know what I can afford and think twice before I buy. I do want to know where my money goes. Is it grocery, hobbies, restaurants, travel, childcare, etc...
I have signed up for Personal Capital and I have connected all my accounts. It gives me a clear breakdown of my expenses. You can set a budget and monitor your expenses against that. You don't have to worry about entering your expenses because it gets picked up automatically. Sometimes they are classified wrong and you should correct but for the most part it is fine.
I am very happy with it. Search for 'Personal Capital'. I believe there were other threads on this topic.

rich126
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Re: I've never budgeted sucessfully

Post by rich126 » Thu May 24, 2018 5:05 pm

I've never had a budget. I just have savings deducted from my paycheck and invested. Then I live off the rest and kind of have a 6th sense when I'm spending too much. While I'm a numbers guy (engineering, computers) I find stuff like that very tedious. Since I don't have a family I can control things myself and not have to worry about others.

For retirement planning I'm just looking at what goes into my account every 2 weeks and subtracting out expenses I won't have in retirement (mortgage, saving for retirement, lower taxes, etc.) and use that as my goal.

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GerryL
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Re: I've never budgeted sucessfully

Post by GerryL » Thu May 24, 2018 5:24 pm

Look up 50-20-30 budget (or plan or rule). You'll find a lot of references on the web.

The idea is no more than 50% should be spent on necessities (e.g. housing costs, transportation, basic food); at least 20% should be saved for goals (including retirement); the rest -- 30% -- is discretionary.

The trick is identifying what should fall into the 50% and 30% categories. After that, no need to track everything constantly because you know what you have to spend -- and you've already saved your 20% (or more). One key is to PYF (pay yourself first) by setting up automatic transfers to savings.

ETadvisor
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Re: I've never budgeted sucessfully

Post by ETadvisor » Thu May 24, 2018 6:19 pm

GoldStar wrote:
Thu May 24, 2018 7:58 am
If you aren't big spenders and have no bad habits how do you think you can you save more?
If you aren't sure where you money is going you don't need software necessarily - you can limit all spending to a single credit card and at the end of the month (or end of quarter or year) dump the statement into a CSV/Excel file and review. Most credit cards have this function and some even make category guesses.
+1 I have 3 credit card because I chase cash rewards but if you had one, the Amex blue everday is the best for tracking with category break-downs and color graphs and pies. This card also provides a year end report and this card does not have an annual fee. My other two cards allow for the CSV/Excel function which I utilize. I can't limit all spending on credit cards so I look at my checking account for those expenses which are not many as I have moved most spending to my credit cards over the years. I do this monthly at the end of the each month and it takes about 15 minutes with my #s by category on a master excel list. I have guidelines as to how much should be spent in each category but I do not strictly stick to them as I focus more on overall monthly spendings to be within my target.

inbox788
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Re: I've never budgeted sucessfully

Post by inbox788 » Thu May 24, 2018 7:07 pm

sailaway wrote:
Wed May 23, 2018 10:23 pm
Most accounts these days allow you to download the information already sorted by category. By combining information from these three accounts, we track the vast majority of our spending. It was three credit cards and two accounts until recently, still very easy to track.
I tried Quicken a long time ago, but wasn't able to keep up, so I have up. All my attempts at downloading or automatic generation of budgets have failed. Categories are always wrong, and trying to fix them is an endless task. I've resorted to something akin to the envelope method, but electronic accounts instead. I have various accounts and credit cards for certain purposes and don't overspend. It's not very accurate, but I don't go over, or when I do, I have to take extra steps to move cash around, and when that happens more than once or frequently, it's a big red flag that the budget isn't working and time to adjust or re-budget, which happens every once in a while.

https://www.daveramsey.com/blog/envelop ... -explained

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Re: I've never budgeted sucessfully

Post by The Wizard » Thu May 24, 2018 7:52 pm

student wrote:
Thu May 24, 2018 5:25 am
I use to do a budget and keep track of my expenses. I stopped doing this a while ago after my friend made a good argument against it. His argument is essentially the exercise takes too much time and is not needed unless one is spending too much. These days, I use a simpler approach. After I put away the amount that I want to save, I am allowed to spend the rest.
This was my approach for my four decade working career...
Attempted new signature...

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Re: I've never budgeted sucessfully

Post by GuyInFL » Thu May 24, 2018 7:56 pm


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Re: I've never budgeted sucessfully

Post by carofe » Thu May 24, 2018 8:06 pm

Mike Scott wrote:
Thu May 24, 2018 9:34 am
Literal cash in envelopes seems old fashioned and low tech but it is easy and it does tell you when you are out of money and after moving money between envelopes for a few months you know where it is going.
This. If tracking is a problem, nothing like the envelope system for budgeting, no tracking necessary.
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Re: I've never budgeted sucessfully

Post by Dottie57 » Thu May 24, 2018 8:15 pm

teddytimtam wrote:
Wed May 23, 2018 11:46 pm
Lyra wrote:
Wed May 23, 2018 10:05 pm
I do it for a week and then don't follow through. Not because I don't want to continue, but because I forget to, or don't have time, or.....

I don't want to use Mint, as much as I like it, because it's just another vulnerability having all financial data out there.
I agree, setting and checking budgets take a lot of time and discipline. What I would recommend is the exact opposite of keeping track of spending via Mint, etc.

You know your monthly NET income after taxes, 401k, Roth, etc.
Set monthly target savings and do whatever it takes to achieve it. When you see your funds grow each month, you'll naturally be encouraged to save more in order to make that number higher and higher.

I don't keep track of every penny I spend, but as long as I keep it under X amount (Net Income minus savings goal) then I am happy with that month.

This worked well for me! Saving first, then daily expenses.

Jmo24
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Re: I've never budgeted sucessfully

Post by Jmo24 » Thu May 24, 2018 8:28 pm

The every dollar plus app where it links to your bank account is my favorite budgeting app, works great for me but you do have to pay $99 a year for the plus version where it links to your bank accounts and/or credit cards. Also, try the good old fashion envelope system for areas that are easy to overspend (groceries, fun money, restaurants, etc). Each category gets an envelope that you put a set amount of cash in at the start of the month, when the envelope is empty, no more spending.

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Tyler Aspect
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Re: I've never budgeted sucessfully

Post by Tyler Aspect » Thu May 24, 2018 9:03 pm

I wrote my own application last year to replace my usage of Quicken. My application "Cash Flow" doesn't keep track of investments with variable net asset values, but it can track income, expense, and budgets. It is capable of accurately tracking cash expenses.

It runs on Windows with Java runtime environment. Data entry is though a color highlighting text editor, while analysis screens are tabular.

Example

Code: Select all

# next payment in June
Loan my Visa card
{
  05/04/18.2 phone, Republic Wireless, 15
  05/04/18.1 PayFrom our bank, 200.50
}
{ 0 => 200.50 (from 2018-04-01 to 2018-04-30)
  04/25/18.2 food, Safeway, 6.00
  04/25/18.1 shop, Target, 9.80
  04/19/18.1 dining, Panda Express, 80.20
  04/15/18.2 car, Shell (gas) 46.00
  04/15/18.1 food, Safeway, 58.5
}
I think having good categories are important to expense tracking. I will show my expense categories below:

Code: Select all

Declare Expense alimony - alimony expense
Declare Expense atm - ATM withdraws
Declare Expense car - car repair, car purchase, gas, parking, transportation
Declare Expense child - child support expense
Declare Expense civic - donation to campaigns or elections
Declare Expense charity - non-profit donation
Declare Expense church - religious organization donation
Declare Expense debit - generic debit expense
Declare Expense dining - dining out expenses, restaurant
Declare Expense education - school costs, tutor expenses, after-school programs
Declare Expense event - movie or musical events, amusement parks
Declare Expense fee - bank fees, credit card fees
Declare Expense gift - gift expense, including birthday
Declare Expense food - food and grocery store expenses
Declare Expense hobby - hobby related expenses, wine, tea, collectibles
Declare Expense housing - mortgage, rental, home repair, gardening, home owner association
Declare Expense insurance - car, house, or life insurance
Declare Expense legal - legal or lawyer expense
Declare Expense medical - dental and medical expenses, prescriptions, self paid premium
Declare Expense misc - miscellaneous expenses
Declare Expense phone - phone, cable, internet
Declare Expense shop - shopping expense
Declare Expense tax - property tax, income tax
Declare Expense utility - electricity, natural gas, water, garbage
Declare Expense vacation - vacation related expenses
https://sourceforge.net/projects/cash-flow
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

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Tyler Aspect
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Re: I've never budgeted sucessfully

Post by Tyler Aspect » Fri May 25, 2018 12:12 am

Our family's system for tracking expenses are quite simple. We try to make payments using credit cards, so that there is a record of expenses that I can record in our finance application. I will transcribe the transactions every two weeks or so.

For cash expenses we write down the expenses on the day it occurs.

Code: Select all

  05/24/18 atm => dining, Subway, 5.50
($5.50 ATM cash was used for dining purpose at Subway on May 24, 2018)

We save receipts for Walmart and Costco, because these stores can have food expenses combined with general shopping.

Code: Select all

  05/07/18.8 food => shop, Costco, 8.49
  05/07/18.7 food, Costco, 156.43
(paid $156.43 at Costco with shopping expense being $8.49 while the rest was food expense.)

One of the most frequently used views is the "Cash Flow" view where I can see the income and expense category breakdowns. To see the current account balances I would select the "Account Registries" view. In order to enter new transactions I would click on the line number field for a particular account, then the text editor would be shown at that same line number.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

WanderingDoc
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Re: I've never budgeted sucessfully

Post by WanderingDoc » Fri May 25, 2018 12:29 am

You don't need to budget.

I have never saved nor budgeted and I am financially free in my early 30s. I focused on producing more income. You only have so much energy as a human being, better use it to create more income than try to save money.

Here is an example. Lets say a person earns $3000 per month. They then listed to Dave Ramsey and decide to save $1000 per month. If they were previously spending $3000, to spend only $2000 will result in a significantly lower quality of life, at least by 50% but likely even worse. Now, if they instead expanded their thinking and focused on generating an extra $1000 per month, which do you think will be easier? If course the latter. Both require the same amount of brain power and energy, only one makes your life better. You decide.

I have personally found that it takes the same amount of energy to earn an extra $3000 per month as to save $1000 per month.

My peers who have had the exact same career trajectory (and roughly the same income), they are still using coupons, budgeting, and saving. They still have to worry about money. I never did any of these things, I only focused on purchasing income-producing real estate, bought all the starbucks I wanted, and I don't worry about money.

Saving/budgeting is a lower-middle class mindset. The decision is yours.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: I've never budgeted sucessfully

Post by scottinmet » Fri May 25, 2018 6:01 am

Lyra wrote:
Wed May 23, 2018 10:05 pm
I know how important a budget is, but I have never been able to do one. I've tried YNAB (and recommended it to another poster in this forum), and others, as well as small notebooks, etc. I fully realize it's not the budgeting tool that is the problem; it's me. I do it for a week and then don't follow through. Not because I don't want to continue, but because I forget to, or don't have time, or.....
I don't budget, but I do keep a spreadsheet of detailed expenses. This is done mostly to estimate retirement expenses so that I have a better calculation for financial independence. It takes me about an hour every two to three months to update the spreadsheet using my electronic credit card and banking statements. Having a specific goal for why I am tracking expenses motivates me to maintain the spreadsheet. YMMV.

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Re: I've never budgeted sucessfully

Post by blaugranamd » Fri May 25, 2018 6:08 am

The Wizard wrote:
Thu May 24, 2018 7:52 pm
student wrote:
Thu May 24, 2018 5:25 am
I use to do a budget and keep track of my expenses. I stopped doing this a while ago after my friend made a good argument against it. His argument is essentially the exercise takes too much time and is not needed unless one is spending too much. These days, I use a simpler approach. After I put away the amount that I want to save, I am allowed to spend the rest.
This was my approach for my four decade working career...
+1. Once a year I do a very general look at our income and recurring expenses, figure out what I want/can save, set it up for automatic savings. The rest I either spend or if my checking account ends up too inflated do a little extra investing.

OP, sounds like you need to consolidate to a single bank for your income and set up automatic withdrawals from each place you need to move money monthly. This should be fairly easy. We have all income go into one bank and have another account with our mortgage bank (saved a bit of interest on mortgage) and looked 5 clicks had it set up to automatically transfer or mortgage amount out a few days before the mortgage payment was due. You should be able to do something similar with all your other banks rather than having fractions of your income deposit split between multiple banks/brokerages.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

frugalprof
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Re: I've never budgeted sucessfully

Post by frugalprof » Fri May 25, 2018 6:46 am

I use Mint to track spending on my credit cards. Out of safety concerns, I do not include any bank account info. I'm just trying to track spending, not income flows. If my credit card data gets hacked, I have recourse with the credit card companies, who are equipped to handle fraudulent charges. I am also vigilant about checking my credit card statements for fraud.

finite_difference
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Re: I've never budgeted sucessfully

Post by finite_difference » Fri May 25, 2018 6:53 am

student wrote:
Thu May 24, 2018 5:25 am
I use to do a budget and keep track of my expenses. I stopped doing this a while ago after my friend made a good argument against it. His argument is essentially the exercise takes too much time and is not needed unless one is spending too much. These days, I use a simpler approach. After I put away the amount that I want to save, I am allowed to spend the rest.
+1. Over time you create a habit of how much you can spend. If you spend too much one month gotta cut back on the following months.

Thag said, figuring out how much you can save does require you to figure out what your fixed expenses are (Internet, insurance, approximate utility, etc.) and to estimate what’s reasonable for non-fixed costs like food. Tracking your fixed costs and periodically trying to reduce them is still worthwhile from time to time. Then you iterate until you achieve a solution that works for you.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

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Re: I've never budgeted sucessfully

Post by RickBoglehead » Fri May 25, 2018 7:17 am

I don't budget. Never have. I track all my spending. There's a difference.

I've been using Quicken since 1996, Managing Your Money before that, Lotus 1-2-3 before that, and a big ledger pad before that. I know where every penny goes. When I spend cash, I ask for a receipt. I even have a category called Loss/Gain, when I true up cash every several months (because I charge virtually everything), if I'm off that goes in Loss/Gain. My annual Loss/Gain is usually under $10.

By tracking what you spend, you gain POWER. Power to know where your money goes. Power to know how much you have to earn, and how much of what you earn you get to invest. I stopped spending my earnings in 1994, when I got a new job with a new company and a nice raise over my prior job. I've never spent more than my 1994 salary since then, yet have had years where I make way more.

Each Saturday I download accounts and manually enter into Quicken. I don't use their budgeting system, I simply track what I spend. I also have a spreadsheet where I have one line per week (and one per month end) to enter the 3 stock market indices, my taxable account total, 529 account total, and grand total (which then calculates my retirement account total), and it shows percentage change from prior month, from year end, from a point in time that I want to measure from. In total, as of last week, I'm up 2.1% this year and 27.48% from 1/1/2017, including all spending. It's powerful knowing this. Freeing. It takes less than 30 minutes a week to do this. Often a lot less. If you don't have 30 minutes a week to know what's going on in your financial life, something is wrong.

The knowledge that you get is knowing when you can retire and live comfortably, because you know what you spend each year and on what you spend it. I can isolate exactly what I spend on the house we live in (mortgage, utilities, repairs) so that if the house was eliminated, and replaced by a different house (or rent), I know what that is.

I strongly urge you to track your spending. It's a win, win, win situation.

NextMil
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Re: I've never budgeted sucessfully

Post by NextMil » Fri May 25, 2018 7:18 am

This will probably come off as arrogant, even though its not meant to, but it baffles me that anyone thinks its a lot of work or hard to do, or you need some fancy program.

I have an excel spreadsheet that works the same every month (copy and paste), a checking account that pays all the bills on auto pay, a digital check register on my phone for personal spending money, and I login into my account M-F first thing in the morning to make sure everything is on track. Truthfully, I am at the point now, where I could login once a month at the end of the month just to make the transfers to brokerages or extra principal reductions on the mortgage.

One column is budgeted amount, second column is actual spend, third column is hopefully any leftover money (delta column). You take that money at the end of the month and send to investments or whatever your targets are, its really not that hard.

SRenaeP
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Re: I've never budgeted sucessfully

Post by SRenaeP » Fri May 25, 2018 8:01 am

NextMil wrote:
Fri May 25, 2018 7:18 am
This will probably come off as arrogant, even though its not meant to, but it baffles me that anyone thinks its a lot of work or hard to do, or you need some fancy program.

I have an excel spreadsheet that works the same every month (copy and paste), a checking account that pays all the bills on auto pay, a digital check register on my phone for personal spending money, and I login into my account M-F first thing in the morning to make sure everything is on track. Truthfully, I am at the point now, where I could login once a month at the end of the month just to make the transfers to brokerages or extra principal reductions on the mortgage.

One column is budgeted amount, second column is actual spend, third column is hopefully any leftover money (delta column). You take that money at the end of the month and send to investments or whatever your targets are, its really not that hard.
I think it's a mental hurdle for a lot of people. I have a friend who abhors having to think about money. I helped her create multiple spreadsheets, systems, etc. but she just doesn't like to think about it at all. I finally came up with a successful method - we sat down one day and calculate her fixed expenses and desired savings rate. After that, I had her open a new online checking account with no debit card. She had the necessary amount of her paycheck directed there and all bills, investments, savings were automated from that account. No more thinking and it's all done. The remainder of her paycheck went into her original checking account. Now she doesn't have to keep track of what she spends. What's in that account is what she has available to spend at any given time. It doesn't matter how she spends it but when it's gone, no more spending until the next payday.

NextMil
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Re: I've never budgeted sucessfully

Post by NextMil » Fri May 25, 2018 8:07 am

That is exactly how I do it too. One checking account that pays all the bills. Its so brilliantly simple.

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