What is the simplest way to handle the household budget?
What is the simplest way to handle the household budget?
My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
Re: What is the simplest way to handle the household budget?
Pay 1/3 in taxesguppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
Save 1/3 through auto-deduction from paycheck
Spend the rest and don't worry about it.
That's about as simple as it gets.
Re: What is the simplest way to handle the household budget?
Here is a simple budget plan I used successfully for a long time.guppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
1. Retirement savings came out in a 401K plan.
2. I added up all the large annual bills and divided that number by 12. That amount was set aside each month.
3. I made a contribution to my car fund each month.
4. We maintained an emergency fund.
Since that took care of all the large expenditures, the only thing we had to do was not spend more than what was in the checking account each month. That included credit card spending.
Last edited by sport on Mon Nov 01, 2021 12:23 pm, edited 1 time in total.
Re: What is the simplest way to handle the household budget?
Do you need to track you budget in order to limit spending or do you need to track expenses for future planning? We are in the latter category, so we just look at the spending out of checking account every month. We pay all of the credit cards from the same account, rent and boat slip fees come out of that account...basically, the only money we spend that doesn't go through this account is credit card bonuses that make it difficult to get cash and medical expenses that come out of the HSA (because DH incurs all the medical bills and has decided that logging on through work and using the HSA is easier).
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Re: What is the simplest way to handle the household budget?
I think it comes down to if you need to track your expenses and want to have those monthly numbers handy to review. I use to track just about everything... but then I noticed that the numbers stayed pretty "steady". I also found that if I needed a years worth of info about my utility bills - I could get that info on line with a little work.
I currently don't keep hard track of any of my expenses on a monthly basis -- Because:
I have my 401K, HSA contributions taken out of my paycheck (I figure out the % or the Amount each year and have them "max" over my 26 yearly paychecks )
I have the following deposited to a second checking account from my paycheck
1/24 property taxes
1/24 house/car insurance/plus car stickers and the cost of year maintenance for furnace and water back up system.
1/24 of Max Roth Contribution amount
1/24 of cost of season tickets
1/24 of a "years worth of car payments" - don't have a loan - but saving for the next car (this monthly amount could be a future car payment).
1/24 of yearly house maintenance amount (arbitrarily set by me - for a new roof, or what ever my house will need.)
1/24 of savings for Vacation (arbitrarily set by me)
1/24 of savings for Gifts/Holiday spending (arbitrarily set by me)
There's some other stuff in there but you get the idea... basically it's "sinking fund $$ anything I'm saving to spend in the next year or two (except for the house and car "payment" part).
Once a month the total deposited from my paychecks to the checking account goes to Ally (an HYSA). In the past the $$ just sat in the checking account and I made payments from it (the expenses being saved up in it require payments thru out the year).
The rest of my paycheck goes to my Main Checking account - I pay my monthly bills (utilities, credit cards, whatever) from this account. I can spend or save whatever is left over.
When I had less income - I use to "borrow" from my "Sinking Fund" money when I was short money for something. Eventually I kept my expenses down and my income went up - and I now rarely spend "Sinking Fund" money for something beyond what it's suppose to pay for. Or maybe I just got better at identifying and then saving up for stuff? Don't know.
I get 26 paychecks a year. So there's an extra month of "sinking fund" expense money that hits that account.
Typically that covers any unexpected increases in the bills/expenses the sinking fund covers.
I tend to do a "deep dive" into how all my money is allocated and my expenses (and if I need to adjust) 2 times a year - November (year end is approaching!) and then in March/April - tax time when I'm reviewing/checking the previous year.
I guess it sounds complicated - but it's basically my original "budget" line items where I divided up "what I pay for monthly" and "what bills I need to save up for to pay" and then doing a 2 times a year review of the two groups. My retirement contributions are also reviewed 2 times a year (during open enrollment November and then usually around Tax time...) I make changes as necessary (or mark on the calendar when I' need to change something - like up my 401K contributions because I've frontloaded my HSA and can now add more to my 401K...or whatever thing I'm doing for the year.)
Oh, yeah, since i use to have monthly amounts for various utilities and could see several years worth - I set up my own "personal" budget amount payment to the Gas Company and the Electric Company. I pay the same amount every month to both - a balance builds up and there's usually enough to cover the "high energy use" months (winter for Gas and summer for Electricity). I will take a look at my Gas Company Balance (now -it's November and see if I need to send a one time my personal budget amount + $100 payment to get ready for higher prices (and bills) in Jan/Feb/Marc of 2022. I look at the Electric Company balance in March April - and maybe do the same so I have enough $$ for June, July , August. the cost of Electricity stays the same so I rarely need to send more - my budget amount is pretty gosh darn close.
I currently don't keep hard track of any of my expenses on a monthly basis -- Because:
I have my 401K, HSA contributions taken out of my paycheck (I figure out the % or the Amount each year and have them "max" over my 26 yearly paychecks )
I have the following deposited to a second checking account from my paycheck
1/24 property taxes
1/24 house/car insurance/plus car stickers and the cost of year maintenance for furnace and water back up system.
1/24 of Max Roth Contribution amount
1/24 of cost of season tickets
1/24 of a "years worth of car payments" - don't have a loan - but saving for the next car (this monthly amount could be a future car payment).
1/24 of yearly house maintenance amount (arbitrarily set by me - for a new roof, or what ever my house will need.)
1/24 of savings for Vacation (arbitrarily set by me)
1/24 of savings for Gifts/Holiday spending (arbitrarily set by me)
There's some other stuff in there but you get the idea... basically it's "sinking fund $$ anything I'm saving to spend in the next year or two (except for the house and car "payment" part).
Once a month the total deposited from my paychecks to the checking account goes to Ally (an HYSA). In the past the $$ just sat in the checking account and I made payments from it (the expenses being saved up in it require payments thru out the year).
The rest of my paycheck goes to my Main Checking account - I pay my monthly bills (utilities, credit cards, whatever) from this account. I can spend or save whatever is left over.
When I had less income - I use to "borrow" from my "Sinking Fund" money when I was short money for something. Eventually I kept my expenses down and my income went up - and I now rarely spend "Sinking Fund" money for something beyond what it's suppose to pay for. Or maybe I just got better at identifying and then saving up for stuff? Don't know.
I get 26 paychecks a year. So there's an extra month of "sinking fund" expense money that hits that account.
Typically that covers any unexpected increases in the bills/expenses the sinking fund covers.
I tend to do a "deep dive" into how all my money is allocated and my expenses (and if I need to adjust) 2 times a year - November (year end is approaching!) and then in March/April - tax time when I'm reviewing/checking the previous year.
I guess it sounds complicated - but it's basically my original "budget" line items where I divided up "what I pay for monthly" and "what bills I need to save up for to pay" and then doing a 2 times a year review of the two groups. My retirement contributions are also reviewed 2 times a year (during open enrollment November and then usually around Tax time...) I make changes as necessary (or mark on the calendar when I' need to change something - like up my 401K contributions because I've frontloaded my HSA and can now add more to my 401K...or whatever thing I'm doing for the year.)
Oh, yeah, since i use to have monthly amounts for various utilities and could see several years worth - I set up my own "personal" budget amount payment to the Gas Company and the Electric Company. I pay the same amount every month to both - a balance builds up and there's usually enough to cover the "high energy use" months (winter for Gas and summer for Electricity). I will take a look at my Gas Company Balance (now -it's November and see if I need to send a one time my personal budget amount + $100 payment to get ready for higher prices (and bills) in Jan/Feb/Marc of 2022. I look at the Electric Company balance in March April - and maybe do the same so I have enough $$ for June, July , August. the cost of Electricity stays the same so I rarely need to send more - my budget amount is pretty gosh darn close.
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Re: What is the simplest way to handle the household budget?
Meant to add that if the bills one's Sinking Fund is covering is large - it can be challenge to get the amounts needed in the account for when they are due - when just starting out... especially if you haven't been "saving to spend later" for the things the Sinking Fund covers.
I'm guessing though - you have the $$ accumulating if you've been doing an envelop or bucket system.
Ally is nice because you can create "separate buckets" for your "savings" within your account. Using Ally let me give up the spreadsheet I rarely updated with totals. Ally does it for me. I can sign in and see how much "Property Tax" I've accumulated or how much is in the Holiday Spending bucket.
I'm guessing though - you have the $$ accumulating if you've been doing an envelop or bucket system.
Ally is nice because you can create "separate buckets" for your "savings" within your account. Using Ally let me give up the spreadsheet I rarely updated with totals. Ally does it for me. I can sign in and see how much "Property Tax" I've accumulated or how much is in the Holiday Spending bucket.
Re: What is the simplest way to handle the household budget?
Simplest? Not having one. We don't.
Investing comes out of the paychecks and auto drafted from checking.
I have some bill auto payments set up to a credit card. I pay a few bills online. I move excess monies monthlyish.
Investing comes out of the paychecks and auto drafted from checking.
I have some bill auto payments set up to a credit card. I pay a few bills online. I move excess monies monthlyish.
Re: What is the simplest way to handle the household budget?
Budget-Quicken Software
Worked and still works
for me
Worked and still works
for me
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: What is the simplest way to handle the household budget?
We just tracked expenses for a while, and then implemented a plan like admiral.
X% goes into retirement by payroll deduction
Y% goes into checking to handle normal expenses
Z% goes into savings for thinks like house maintenance and car replacement, and for Roth IRA each year
You just need to figure out 2 of these and solve for the other.
X% goes into retirement by payroll deduction
Y% goes into checking to handle normal expenses
Z% goes into savings for thinks like house maintenance and car replacement, and for Roth IRA each year
You just need to figure out 2 of these and solve for the other.
Re: What is the simplest way to handle the household budget?
I like this a lot. I break down stuff into details every few months just to check my budget but I really like this simplified high level summary just as a quick check.Admiral wrote: ↑Mon Nov 01, 2021 12:20 pmPay 1/3 in taxesguppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
Save 1/3 through auto-deduction from paycheck
Spend the rest and don't worry about it.
That's about as simple as it gets.
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Re: What is the simplest way to handle the household budget?
If you have been doing it for a while, the easy way is probably to keep what you already have going. Our basic budget was originally a literal envelope method with cash. Now, it's mental envelopes and electronic transfers but the budget patterns remain much the same as they were 30 something years ago. We don't really think about it that much on a day to day basis. Because of income patterns, our monthly budget is based on an annual cycle divided by 12 knowing that there can be hole to cover in the middle of the year.
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Re: What is the simplest way to handle the household budget?
Pay somebody else to do it for you if it's a burden. I doubt Bezos worries about his household budget.
Re: What is the simplest way to handle the household budget?
Our budget, set at the beginning of the year, is annual. It’s saved in Quicken. The budget includes all expenses from taxes to birthday gifts to auto insurance to utilities, and all income sources too.
Our income is consistently distributed throughout the year, with the exception of some earnings thrown off by our taxable brokerage account.
We have one checking account and three credit cards that all expenditures go through. All income goes into the checking account. Transactions in all four are downloaded into Quicken once a week. It takes about 30 minutes to download and categorize those transactions, and review the budget report that I’ve created.
Money for expenses that occur infrequently (like property taxes and estimated income taxes) just accumulate in checking until spent. Once savings accounts are paying more than 0.5% in annual interest, I’ll probably transfer money to savings once a month to cover those. But right now, it’s not worth the effort.
So let’s call it 2 hours to set up the budget initially, and another 2 hours a month to maintain and review it.
Whether that’s simple enough for you, I can’t know. But it works for us.
Our income is consistently distributed throughout the year, with the exception of some earnings thrown off by our taxable brokerage account.
We have one checking account and three credit cards that all expenditures go through. All income goes into the checking account. Transactions in all four are downloaded into Quicken once a week. It takes about 30 minutes to download and categorize those transactions, and review the budget report that I’ve created.
Money for expenses that occur infrequently (like property taxes and estimated income taxes) just accumulate in checking until spent. Once savings accounts are paying more than 0.5% in annual interest, I’ll probably transfer money to savings once a month to cover those. But right now, it’s not worth the effort.
So let’s call it 2 hours to set up the budget initially, and another 2 hours a month to maintain and review it.
Whether that’s simple enough for you, I can’t know. But it works for us.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: What is the simplest way to handle the household budget?
We've never had a budget. 401k contributions are auto-deducted from our paychecks. Money was automatically moved to a 529B up until this year when it became fully funded. Money is automatically moved to our taxable brokerage account and auto-invested every two weeks. All bills on autopay. Anything left we can spend, or not, as we see fit. We watch our checking account and when it gets a little lower than we'd like we slow down our discretionary spending. It's worked for us for 30 years.
Last edited by punkinhead on Mon Nov 01, 2021 5:19 pm, edited 1 time in total.
Re: What is the simplest way to handle the household budget?
+1, I spend exactly 2 hours a month putting in expenses and categorizing from all cash/credit accounts in a spreadsheet. I don't need to do this, it doesn't really matter in the grand scheme of things. But I'm Type A, so yeah, I can't really not do this, it must be done.
Re: What is the simplest way to handle the household budget?
We have a Google Spreadsheet that is budgeted per bi-weekly paycheck and it works out well that we get paid on the same day. Starts out with our paycheck and then we list out all of our expenses but leave big ones intact like our credit cards. We just use our average to project and then input the actual credit card bills when we get them - we pay off all credit card balances each month.
We also have another spreadsheet that tracks our net worth that we update every quarter.
This system currently works really well helping us plan for the next stage of our life (van life) and making sure every dollar of our income is tracked and accounted for. We don’t “budget” in the sense that we don’t have a set # of what we can spend on eating out, clothes, etc. each month. We spend freely and will discuss larger purchases ($500+) but for the most part we don’t scrutinize our monthly credit card spend.
We also have another spreadsheet that tracks our net worth that we update every quarter.
This system currently works really well helping us plan for the next stage of our life (van life) and making sure every dollar of our income is tracked and accounted for. We don’t “budget” in the sense that we don’t have a set # of what we can spend on eating out, clothes, etc. each month. We spend freely and will discuss larger purchases ($500+) but for the most part we don’t scrutinize our monthly credit card spend.
Re: What is the simplest way to handle the household budget?
Don't really have a budget, although I prepared a general one prior to retiring.
I track expenses monthly in three categories. (1) Capital expenditures (loose definition but generally long lasting assets with significant value -- think new heat pump), (2) income taxes and (3) everything else.
I track expenses monthly in three categories. (1) Capital expenditures (loose definition but generally long lasting assets with significant value -- think new heat pump), (2) income taxes and (3) everything else.
Stay hydrated; don't sweat the small stuff
Re: What is the simplest way to handle the household budget?
I can identify.Kagord wrote: ↑Mon Nov 01, 2021 5:19 pm+1, I spend exactly 2 hours a month putting in expenses and categorizing from all cash/credit accounts in a spreadsheet. I don't need to do this, it doesn't really matter in the grand scheme of things. But I'm Type A, so yeah, I can't really not do this, it must be done.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: What is the simplest way to handle the household budget?
when you and spouse are both frugal, no need for a budget.
Re: What is the simplest way to handle the household budget?
We do not use cash for anything. We use credit cards for everything. The credit card companies track our expenses for us.
One can use different credit cards to help separate expenses in a more obvious way. Example: You use Fidelity 2% cash back and your spouse uses Chase Mileage card. You can decide which shared expenses will go on which card or yet a third or fourth card.
And even though you use different cards, all your cards have both/each of you as cardholders.
One can use different credit cards to help separate expenses in a more obvious way. Example: You use Fidelity 2% cash back and your spouse uses Chase Mileage card. You can decide which shared expenses will go on which card or yet a third or fourth card.
And even though you use different cards, all your cards have both/each of you as cardholders.
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Re: What is the simplest way to handle the household budget?
I have a spreadsheet that I update on the first of every month but I also use Personal Capital for more specific tracking. It only takes me 10-15 minutes every month to input everything. All monthly bills are automatically deducted and/or charged to my credit cards with the exception of our property taxes that we pay every April and December.guppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
As far as savings, we always max our 401k and simple IRA and contributions are automatically deposited from our paychecks every 2 weeks. Everything left over is fair game for us to spend however we please but we have never been able to even get close to spending it all. Any leftover money at the end of each quarter, I invest it in taxable.
We don't implement any spending awareness as we are naturally frugal. It's actually hard for us to spend more money than we have to even when we tried. We do splurge on vacations and recently coughed up a good amount of money to upgrade our old washer and dryer that has been a long time coming.
I feel like this is simple enough for us.
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Re: What is the simplest way to handle the household budget?
I have been doing this for many years, and for the past 20+ years (the years of my marriage where I had to account for more people than just "me"). I keep track of this in a couple Excel spreadsheets that I have been tweaking for more than those 20+ years.guppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
1 - first step, I use Excel for my own checking account ledger, yes, I keep my own ledger and reconcile it with the monthly statement.
2 - second step, I spend some time around the beginning of each year to populate the checking ledger with all anticipated transactions for the year. I have a graph in the ledger to show me the anticipated account balance throughout the year. Many of the anticipated transactions can be estimated almost precisely or within a reasonable (budget amount). As each transaction comes up as the days of the year roll by I edit the transaction with the actual amount.
3 - third step, that came about long after steps 1 and 2 were long practiced, I created a one page Excel "budget file". 12 months in columns, and as many rows as needed to list anticipated income and expenses. I am able to enter expected transactions that don't occur each month (eg: once a year for property taxes, semi-annual for auto insurance, etc). I try to account for all anticipated transactions in this table. Then each year when I perform Step 2 I "link" the anticipated transactions in the checking account ledger back to the budget table of Step 3. This way I have a one-page bird's-eye view of expected expenses and can adjust as necessary.
4 - Even before I started doing step 3, I would add up all expected "irregular" (non-monthly) expenses for the year and divide by 12 (actually 24, for my 24 pay checks). This included accruing money for home repairs, car repairs, possible emergencies (medical, family, etc). I liked having a non-lumpy cash flow in my checking account. This "Reserve" fund was very useful to me during my working years (I even did this before I ever even got a personal computer). Now that I am retired (3.5 years) and living off my savings until I get SS at age 70 I don't keep a strict reserve fund.
So, this is what I do, and have been doing for 25 years and more.
Q: Do you use a bucket or envelope system?
Essentially, yes. In my system I really have "virtual envelopes" for probably 2 dozen different categories
Q: How do you handle scheduled/periodic bills?
As described, these were/are put in the Budget ledger in Excel, then linked to the Checking Account ledger in Excel by formulas pointing back to the Budget (this all is not as difficult as it may seem). This way I can see (numerically with the balance, and visually with the graph) as to how the projected balance looks to me. A point I didn't mention above is that I would have to "balance" my anticipated discretionary spending with desired savings. This was easily done using the Budget ledger.
Q: How do you track expenses?
I'm not certain I had any need or desire to do this with my financial condition. But I would look back at the checking account ledger (and the credit card ledgers) to check total expenses over time for some categories, like car ownership expenses, car insurance, home repairs, utility bills, gifts, etc, etc. I would use all this informav
Q: Where/how do you set aside for savings?
With my funds for irregular expenses (Step 4 above) I would get into some pretty high dollar amounts every year, and some of the envelopes in there were not spent down every year, eg: for home/auto repairs, etc. I would keep some in a saving account at the same bank as my checking account (online bank Capital One 360 (was Netbank.com many years ago, then ING Orange, then Cap One), and I would moves bulk funds over to someplace with higher returns, maybe Vanguard money market (now _that_ was a long time ago), high yield accounts at Cap One and other online banks. I kept track of it all in linked Excel worksheets and file.
Q: Do you implement any kind of real time spending awareness/contraints?
I had alloted some amount for monthly free spending on credit cards. The amount based on historical use and on what I figured was a good amount (what was "fair" to my wife and me).
Not asked, but the time involved? Quite a bit at the beginning of the year to set things up (now I work off the previous years' work) but as ongoing throughout the year it is trivial, it's really only the time that I would spend updating a check register, etc.
related: My wife has several family members who are on very low income and very tight budgets, and who are not very wise or street smart. At wife's request I have set up extremely simple spreadsheets in Google Sheets to track their spending. We've set up monthly budgets for them, and I set up a Google Sheet with 52 tabs, one for each week. They get "so much" to spend each week through their own hands (food, household, personal) and they have to enter each spending transaction in the ledger. If they spend too much the ledger turns a scary red color. All their other bills are set up on autopay and are accounted for in the monthly budget. They have been doing this for around 10 years and it has been successful in keeping them from going into the ditch (as they had done a number of times before). In part, keeping their ledger has enforced some better spending habits in them.
Re: What is the simplest way to handle the household budget?
After trying to explain a very specific detailed budgeting plan complere with spreadsheets to my wife 25 years ago she promptly ignored my teachings. Instead she created two checking accounts. The first she called the monthly account. Out of every paycheck (after savings) a portion required to cover our fixed costs including mortgage, insurance, utilities, and other required essential expense. The remainder went to the "weekly" account. The weekly was for household, entertainment, gifts , etc and if it went to zero before next paycheck then no spending until next paycheck. For anything she charged she deducted the amount from her running balance until time to pay bill. Very simple and self correcting and no detailed budgeting.
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Re: What is the simplest way to handle the household budget?
So what is the simplest way to budget and what does it look like?
A. Have 30-50-70 percent of your income routed automatically to savings and investments and spend the rest.
Do you use a bucket or envelope system?
A. No
How do you handle scheduled/periodic bills?
A. Co-op maintenance and LTCi get auto paid.
Con Ed I pay by phone.
Since Covid I pay phone online as a guest. Most other stuff since Covid I put on my Amex. I use the “touch it once” system for bills: receive, review, pay, shred or file.
How do you track expenses?
I have an annual budget. The budget grew out of a project where I tracked daily spending for 6months or longer, picked my jaw off the floor, realigned my spending to my life priorities and kept whittling it down over time.
I record larger expenses in my daily planner and check my bills against that record.
Where/how do you set aside for savings?
A. Banks - automatic withdrawals from each paycheck. Call it paying myself first or forced savings.
Do you implement any kind of real time spending awareness/constraints?
A. yes.
-no credit cards with interest (just debit and charge)
-no more rewards or loyalty programs because these reduce “friction” and incentivize spending - for ME anyway.
-limit the ads I’m exposed to: no TV or magazines, catalogs etc.
-mail preference service (fewer in home ads)
-shop a lot on Walmart and Amazon
-use a wish list for larger purchases: wait and consider
-just feel satisfied and have what I want
.
[/quote]
A. Have 30-50-70 percent of your income routed automatically to savings and investments and spend the rest.
Do you use a bucket or envelope system?
A. No
How do you handle scheduled/periodic bills?
A. Co-op maintenance and LTCi get auto paid.
Con Ed I pay by phone.
Since Covid I pay phone online as a guest. Most other stuff since Covid I put on my Amex. I use the “touch it once” system for bills: receive, review, pay, shred or file.
How do you track expenses?
I have an annual budget. The budget grew out of a project where I tracked daily spending for 6months or longer, picked my jaw off the floor, realigned my spending to my life priorities and kept whittling it down over time.
I record larger expenses in my daily planner and check my bills against that record.
Where/how do you set aside for savings?
A. Banks - automatic withdrawals from each paycheck. Call it paying myself first or forced savings.
Do you implement any kind of real time spending awareness/constraints?
A. yes.
-no credit cards with interest (just debit and charge)
-no more rewards or loyalty programs because these reduce “friction” and incentivize spending - for ME anyway.
-limit the ads I’m exposed to: no TV or magazines, catalogs etc.
-mail preference service (fewer in home ads)
-shop a lot on Walmart and Amazon
-use a wish list for larger purchases: wait and consider
-just feel satisfied and have what I want
.
[/quote]
Last edited by AnnetteLouisan on Mon Nov 01, 2021 9:13 pm, edited 2 times in total.
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Re: What is the simplest way to handle the household budget?
Basically this for us. Paychecks come into checking after 401k and HSA deductions, most charges paid out of 2 credit cards and auto bill pay that I can see in advance, and then I keep a 1k buffer to account for any lumpy or one-off expenses. Any excess goes into taxable savings or emergency fund.
Re: What is the simplest way to handle the household budget?
For us, this is simplest:
1. Paychecks direct deposited into Vanguard
2. From there, weekly automatic transfer to a "bill pay" checking account. The amount is set to cover the needed cash flow plus a bit. That's for regular monthly, quarterly bills and other recurring stuff like car registrations.
3. From there, weekly automatic transfer to separate "allowance accounts" for each of us (lunches, coffee, hobbies, whatever), and a shared one for groceries/gas.
The benefits:
1. Pays ourselves first. No real temptation to spend pay bonuses before they can be put into savings.
2. Bills are separate from personal spending, so no contention or risk of messing up
3. The weekly allowances are easy to keep track of and not overspend, or to save up a bit if wanted. A week is easy to think about -- "oh, I'll wait to order that from Amazon when I get my allowance on Tuesday."
4. Basically no bookkeeping, since the bill pay is about 10 transactions a month, and all the little stuff isn't mixed in at all -- so no need to balance a checkbook or predict ahead for next month's bills.
5. Occasionally, adjust the flow rate of money into the bill pay account or spending accounts if needed. In practice, this is rare -- maybe once in two years. Of course, if you buy a car, or re-finance a mortgage, that would require an adjustment.
6. Isolation. Debit cards that are used out in the world for the "spending" accounts are not even at the same bank as the "bill pay" or savings, so when a card has to be cancelled, it's not a big inconvenience, and I think the risk of compromise of the "bill pay" account is reduced. Plus, the balances at risk are small, since the transfer frequency is high.
In general, the bill pay account grows a little, and the extra is either refunded back to savings, paid to ourselves as a "bonus", or we adjust the rate of future weekly inflows.
1. Paychecks direct deposited into Vanguard
2. From there, weekly automatic transfer to a "bill pay" checking account. The amount is set to cover the needed cash flow plus a bit. That's for regular monthly, quarterly bills and other recurring stuff like car registrations.
3. From there, weekly automatic transfer to separate "allowance accounts" for each of us (lunches, coffee, hobbies, whatever), and a shared one for groceries/gas.
The benefits:
1. Pays ourselves first. No real temptation to spend pay bonuses before they can be put into savings.
2. Bills are separate from personal spending, so no contention or risk of messing up
3. The weekly allowances are easy to keep track of and not overspend, or to save up a bit if wanted. A week is easy to think about -- "oh, I'll wait to order that from Amazon when I get my allowance on Tuesday."
4. Basically no bookkeeping, since the bill pay is about 10 transactions a month, and all the little stuff isn't mixed in at all -- so no need to balance a checkbook or predict ahead for next month's bills.
5. Occasionally, adjust the flow rate of money into the bill pay account or spending accounts if needed. In practice, this is rare -- maybe once in two years. Of course, if you buy a car, or re-finance a mortgage, that would require an adjustment.
6. Isolation. Debit cards that are used out in the world for the "spending" accounts are not even at the same bank as the "bill pay" or savings, so when a card has to be cancelled, it's not a big inconvenience, and I think the risk of compromise of the "bill pay" account is reduced. Plus, the balances at risk are small, since the transfer frequency is high.
In general, the bill pay account grows a little, and the extra is either refunded back to savings, paid to ourselves as a "bonus", or we adjust the rate of future weekly inflows.
Re: What is the simplest way to handle the household budget?
I pay myself first of each month. Takes care of daily/monthly stuff. I have cash reserved for property tax and home ins. That’s it. Live within my means.
Re: What is the simplest way to handle the household budget?
When I was just starting out I used to only use a debit card rather than a credit card and not every transaction in my checkbook because I was afraid that if I put expenses on a credit card, I would buy too much and be surprised by a huge credit card bill from not tracking my spending closely enough. After a couple of years I realized that my monthly spending, on average, did not vary significantly. So I switched to just putting everything on a credit card and just paying the bill off every month and, fortunately never had a problem.
All of which is to say that maybe after several decades of good and successful envelope budgeting, you can just not bother with a budget any more. Your spending habits are not likely to change.
All of which is to say that maybe after several decades of good and successful envelope budgeting, you can just not bother with a budget any more. Your spending habits are not likely to change.
Re: What is the simplest way to handle the household budget?
We’ve done strict budgeting at times when we have a specific goal (like we’re currently doing saving for a downpayment) and then other times we do a loose budget.
For strict: Mint works great to create a budget by category and track spending. Check as often as necessary to see if you’re on track. Once your budget hits the max you’re done, like envelope but digital.
For loose: Set an amount in your checking as a cash reserve or emergency fund and at the end of the month invest anything above that number. If it goes down, do a retrospective.
For strict: Mint works great to create a budget by category and track spending. Check as often as necessary to see if you’re on track. Once your budget hits the max you’re done, like envelope but digital.
For loose: Set an amount in your checking as a cash reserve or emergency fund and at the end of the month invest anything above that number. If it goes down, do a retrospective.
50% VTI | 20% VXUS | 20% BND | 10% QQQ
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Re: What is the simplest way to handle the household budget?
I guess the biggest question is why do you need to budget. It's one thing if things are tight and you need to be tracking every penny. It's an entirely different matter if you are frugal and aiming for early retirement.guppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
If it is the latter, you will quickly find that almost all expenses are quite consistent, and all the small expenses don't make much of a dent in the grand scheme of things. Obviously you need to plan for emergency expenses, but other than that, expenses stay roughly the same.
At this point, my wife and I make double our expenses. We track net worth in Personal Capital and track expenses in Mint. All of this is basically automatic. We really only use Mint as a guidepost to confirm that we are spending roughly $5,000-5,500 per month.
So, it's not really a budget anymore. It's just information we can use to process bigger and more important decisions.
Re: What is the simplest way to handle the household budget?
1. I have tracked our expenses for several years - so I have a good idea of our normal expense run rate.
2. I have all our income sent to an online savings account and make sure that and any additional savings exceeds the annual
normal expense run rate.
3. Twice a month money equal to half our normal monthly expense is transferred to checking account.
4. If an unusual expense arises it is usually charged to a credit card or HELOC and if money is needed more is transferred
from savings to pay off credit card or HELOC.
5. Periodically, I add to the savings account to maintain about 1/2 year or more of expense coverage.
6. If the month's expenses frequently exceed the amount from the 2 automatic transfers then I know I have expense creep
and need to determine cost cutting or upping our automatic transfer amounts. So, it gives me a bit of a heads up.
2. I have all our income sent to an online savings account and make sure that and any additional savings exceeds the annual
normal expense run rate.
3. Twice a month money equal to half our normal monthly expense is transferred to checking account.
4. If an unusual expense arises it is usually charged to a credit card or HELOC and if money is needed more is transferred
from savings to pay off credit card or HELOC.
5. Periodically, I add to the savings account to maintain about 1/2 year or more of expense coverage.
6. If the month's expenses frequently exceed the amount from the 2 automatic transfers then I know I have expense creep
and need to determine cost cutting or upping our automatic transfer amounts. So, it gives me a bit of a heads up.
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Re: What is the simplest way to handle the household budget?
All deductions (taxes, tax-deferred contributions, after-tax investments, etc) are taken directly out of the paycheck.
All else sent to the checking account to be spent as needed / desired.
I save 40%+ of my income this way
All else sent to the checking account to be spent as needed / desired.
I save 40%+ of my income this way
A task begun is nearly half complete | Enough is as good as a feast | Risk: Ensure your goals can be met even under worst case scenario and be realistic.
Re: What is the simplest way to handle the household budget?
You make a good point….I think at some point (retirement) we won’t have a budget anymore but rather a big cash bucket that gets refilled once per year.CoastLawyer2030 wrote: ↑Tue Nov 02, 2021 7:53 amI guess the biggest question is why do you need to budget. It's one thing if things are tight and you need to be tracking every penny. It's an entirely different matter if you are frugal and aiming for early retirement.guppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
If it is the latter, you will quickly find that almost all expenses are quite consistent, and all the small expenses don't make much of a dent in the grand scheme of things. Obviously you need to plan for emergency expenses, but other than that, expenses stay roughly the same.
At this point, my wife and I make double our expenses. We track net worth in Personal Capital and track expenses in Mint. All of this is basically automatic. We really only use Mint as a guidepost to confirm that we are spending roughly $5,000-5,500 per month.
So, it's not really a budget anymore. It's just information we can use to process bigger and more important decisions.
We are in the mid-late accumulation phase with plenty of slack in or monthly budget. We don’t sweat variations in ordinary expenses. Where I see a budget as important is the mid term expenses, such as vacation, home remodeling, basically anything unusual that cannot be paid from one month’s earnings. The other factor is that my take home pay fluctuates +-25% every month.
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Re: What is the simplest way to handle the household budget?
IMO - this is a pretty simple way to do it...guppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
https://www.ramseysolutions.com/budgeti ... sed-budget
Download the free version of the app to give it a try to see if it could work for you. If not, there are plenty of household budgeting apps available these days.
Many of us are required or have been required to create, get approved, follow, and track budgets in our jobs for many, many years - so it is not a huge leap to do it at home as well. It's a lot easier these days with apps and aggregators due to a lot less elbow grease required beyond the few entries and adjustments required each month.
CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel |
"Pick a bushel, save a peck!" - Grandpa
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Re: What is the simplest way to handle the household budget?
Great point!theplayer11 wrote: ↑Mon Nov 01, 2021 5:54 pm when you and spouse are both frugal, no need for a budget.
A classic!
Frugality during one's earning (yearning) years becomes a habit, and, later in life in retirement, all of that can result in a substantial size portfolio where continuing one's frugal (comfortable and simple not painful) lifestyle allows a lot of budget "breathing room".
On Topic: OP:
Spouse uses Quicken and focuses on "budget" as in keeping track of things with no expenditure limitations.
Self: focus on maximizing income, even in retirement.
thanks!
j
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Re: What is the simplest way to handle the household budget?
Mint is an excellent way to get a guidepost on how much these things actually cost. I know *exactly* how much we have spent on home repairs, car maintenance, licensing issues (e.g., driver's license, other permits), etc. in the last three years.guppyguy wrote: ↑Tue Nov 02, 2021 9:09 amWe are in the mid-late accumulation phase with plenty of slack in or monthly budget. We don’t sweat variations in ordinary expenses. Where I see a budget as important is the mid term expenses, such as vacation, home remodeling, basically anything unusual that cannot be paid from one month’s earnings. The other factor is that my take home pay fluctuates +-25% every month.
Once that's been going for three years then you do, in fact, have a good monthly average of what all these things actually cost.
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Re: What is the simplest way to handle the household budget?
Per above list:guppyguy wrote: ↑Mon Nov 01, 2021 12:15 pm My wife and I are long time envelope budgeters (since before the internet) but lately I’ve had the feeling that I’ve possibly made our day to day personal finances unnecessarily complex. We use YNAB, which is a great product, but I’ve had my head down in the details for so long I am wondering if it can be done any simpler.
So what is the simplest way to budget and what does it look like?
Do you use a bucket or envelope system?
How do you handle scheduled/periodic bills?
How do you track expenses?
Where/how do you set aside for savings?
Do you implement any kind of real time spending awareness/contraints?
I realize there are probably a million ways to do this…..but I’m looking for the simplest, the equivalent to the 3 fund portfolio for household finances.
Quicken and also a simplified Excel spreadsheet.
Bucket.
Pay bills as they are due, in full.
Quicken, with no expenditure limitations in retirement though we do spread out large spending per withdrawal rate.
Brokerage sweep accounts, physical bank accounts.
No. After awhile being always aware of income/expense without obsessing or intrusive thinking, while living a frugal and simple lifestyle, and having a large 25X+ ratio is more than enough for peace of mind, zero stress, and focusing on what is truly important which is not money.
3 fund hybrid LMP Portfolio.
Retired 10 years.
As "Taylor" has often said, "keep it simple".
j
Re: What is the simplest way to handle the household budget?
I go super simple - I limit my budget to bills I have to pay from my paycheck. Retirement + investing all on auto pilot - that $$$ never hits my checking acct.
Most recurring expenses are on autopay. I use an old school Excel spreadsheet to track what's due and when. Cells gets green fill when funds are withdrawn. Not sophisticated but it works for me.
Most recurring expenses are on autopay. I use an old school Excel spreadsheet to track what's due and when. Cells gets green fill when funds are withdrawn. Not sophisticated but it works for me.
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Re: What is the simplest way to handle the household budget?
Save first, whatever is left is to spend.
Money goes into savings account. From there it goes into hub checking from which savings and fixed expenses come. Then some goes into checking account, which we spend. If that account runs low we cut back while it grows.
Money goes into savings account. From there it goes into hub checking from which savings and fixed expenses come. Then some goes into checking account, which we spend. If that account runs low we cut back while it grows.
Re: What is the simplest way to handle the household budget?
I'm surprised how few actually budget each month. I use a free online budget app to track my spending (Everydollar is easiest for me) and adjust it if I go over on some category. You can pay to have it linked with your accounts but I don't. I use this to maximize the amount I can save each month.
Re: What is the simplest way to handle the household budget?
In our accumulation years we did not create a budget. Rather we made automatic investments from our paychecks. (The amount determined by a nest egg number and the requisite amount of monthly investment needed). We also kept rainy day cash. Lastly, we always paid off the credit card balance monthly. We spent the rest.
Now retired, the portfolio generates more than we can spend.
Now retired, the portfolio generates more than we can spend.
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Re: What is the simplest way to handle the household budget?
I have used an excel spreadsheet for years that has our monthly "bills" in it as well as what we spend on food/gas/etc. There is a total for these bills (including what investing we do outside of work place plans) and we compare that total to what our take home pay is. My ideal budget is that these numbers equal each other every month. We know how much we can spend/save and what we bring in. My wife gets 26 paychecks a year, so there are 2 "bonus" checks that we usually use to pay for things that come up each year, such as car plates. Our budget has savings, vacation fund, allowances, etc all in it. As bills increase, we adjust the spreadsheet to account for it, usually meaning less goes to savings as we only increase what we are investing. Any raises/bonuses are used to do home maintenance/updates and we pay cash for those. If not needed, we put this money into savings/investing and will adjust the spreadsheet accordingly. We have been doing this for 25 years and it works for us. For day to day expenses, we use credit cards for 95% of everything and pay the bills off each month. I have a file that the monthly receipts all go into, in will add them to the spreadsheet and total them up and any extra goes into savings and excess spending is covered by how much we would have allocated to savings. In a given month, we are +/- $500 and that is easily taken care of with our savings allocations. We use all the credit card bonuses for vacations from the points we earn by putting everything on credit cards for day to day spending. My wife and I make less than $150K combined and this has allowed our net worth to blossom as we know where our spending is happening and where we can squeeze a few more $$ each year to invest. We go without nothing and don't fret spending money.
Re: What is the simplest way to handle the household budget?
We talk a lot about being frugal on this forum, but I don’t know that it means the same thing to everyone.Sandtrap wrote: ↑Tue Nov 02, 2021 9:11 amGreat point!theplayer11 wrote: ↑Mon Nov 01, 2021 5:54 pm when you and spouse are both frugal, no need for a budget.
A classic!
Frugality during one's earning (yearning) years becomes a habit, and, later in life in retirement, all of that can result in a substantial size portfolio where continuing one's frugal (comfortable and simple not painful) lifestyle allows a lot of budget "breathing room".
On Topic: OP:
Spouse uses Quicken and focuses on "budget" as in keeping track of things with no expenditure limitations.
Self: focus on maximizing income, even in retirement.
thanks!
j
Anyway, here’s Merriam-Webster:
Essential Meaning of frugal
1 : careful about spending money or using things when you do not need to : using money or supplies in a very careful way
“He's a frugal shopper.”
2 : simple and plain
“a frugal meal of bread and cheese”
For my family, we always saved first and then spent what was left. But that has nothing to do with frugality, definitionally. You can have a high savings rate, but not be frugal with your spending.
We were frugal when our kids were young. As we got more financially secure, we became less frugal. That’s where a budget and tracking spending came in. We can be less frugal according to our priorities now.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: What is the simplest way to handle the household budget?
My data point for your survey
Then right before my next paycheck, I will look at my checking account and transfer the excess into some sort of savings vehicle. Usually I'll either replenish my emergency fund, if needed, or deposit into a sinking fund for large known upcoming expenses (ex: furnace fund), or deposit into a taxable brokerage account.
Simplest way would be to allocate $X for spending each month. Once you reach $X, you stop spending. Whether it is too simple for you is up to you decide, but objectively it is the simplest way to budget.
No
I try to autopay as much as I can to my credit card. All my credit cards are due on the first of the month, so it is easy to remember to pay them. There are some where you can only autopay from a checking account, so I do those that way.
I generally use Personal Capital for this. However, I use it more for tracking expenses (looking backwards) than budgeting (looking forward)
Most of my savings is of the "pay myself first" variety where I don't even see the money. Those are deductions from my paycheck for 401k, HSA, etc.
Then right before my next paycheck, I will look at my checking account and transfer the excess into some sort of savings vehicle. Usually I'll either replenish my emergency fund, if needed, or deposit into a sinking fund for large known upcoming expenses (ex: furnace fund), or deposit into a taxable brokerage account.
Not really, but after X years of doing this, I am pretty disciplined in my spending.
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Re: What is the simplest way to handle the household budget?
This is a different way of saying what I was alluding to upthread, and I agree with it.humblecoder wrote: ↑Tue Nov 02, 2021 12:01 pm My data point for your survey
Simplest way would be to allocate $X for spending each month. Once you reach $X, you stop spending. Whether it is too simple for you is up to you decide, but objectively it is the simplest way to budget.
Generally speaking, after you have been tracking your expenses for a long time, you know exactly how much you spend, and you acquire a sixth sense as to when you are approaching your desired monthly budget.
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Re: What is the simplest way to handle the household budget?
Good points.delamer wrote: ↑Tue Nov 02, 2021 11:05 amWe talk a lot about being frugal on this forum, but I don’t know that it means the same thing to everyone.Sandtrap wrote: ↑Tue Nov 02, 2021 9:11 amGreat point!theplayer11 wrote: ↑Mon Nov 01, 2021 5:54 pm when you and spouse are both frugal, no need for a budget.
A classic!
Frugality during one's earning (yearning) years becomes a habit, and, later in life in retirement, all of that can result in a substantial size portfolio where continuing one's frugal (comfortable and simple not painful) lifestyle allows a lot of budget "breathing room".
On Topic: OP:
Spouse uses Quicken and focuses on "budget" as in keeping track of things with no expenditure limitations.
Self: focus on maximizing income, even in retirement.
thanks!
j
Anyway, here’s Merriam-Webster:
Essential Meaning of frugal
1 : careful about spending money or using things when you do not need to : using money or supplies in a very careful way
“He's a frugal shopper.”
2 : simple and plain
“a frugal meal of bread and cheese”
For my family, we always saved first and then spent what was left. But that has nothing to do with frugality, definitionally. You can have a high savings rate, but not be frugal with your spending.
We were frugal when our kids were young. As we got more financially secure, we became less frugal. That’s where a budget and tracking spending came in. We can be less frugal according to our priorities now.
Well said.
It would be handy if the forum had 50 words for variants of "frugal" much as there are 50 words to describe types of "rain" in Japanese.
j
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Re: What is the simplest way to handle the household budget?
We have had a budget for most of our married life now in our 31st year of marriage. My wife was pregnant with our first son and basically said she didn’t want to work away from home after he was born. So I said let’s set a budget and just see if we can live on my income alone. We started with a pencil and paper and about 10 categories for our budget. We are now happily retired and still budget (now using Excel and about 30 categories, my wife likes the detail). At least for us by budgeting we could control all the impulse purchases and overspending. We also ensured we paid ourselves (retirement savings) and others (charity) first. The budget provided perspective when the urge was a bigger house or a new car was calling.
The need for budgeting really depends on how much you make and your personality. If you make enough to save for retirement, pay all your expenses, build up a good emergency fund and still have money left over at the end of the month then you probably don’t need a budget. However, if you have expensive tastes and want the latest and greatest and always short at the end of the month then a budget would probably do you a lot of good. I will say I was blessed to have a spouse who fully agreed with the process.
The need for budgeting really depends on how much you make and your personality. If you make enough to save for retirement, pay all your expenses, build up a good emergency fund and still have money left over at the end of the month then you probably don’t need a budget. However, if you have expensive tastes and want the latest and greatest and always short at the end of the month then a budget would probably do you a lot of good. I will say I was blessed to have a spouse who fully agreed with the process.
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Re: What is the simplest way to handle the household budget?
Wife and I are both have difficulty spending money. Have never had a budget, yet the cash still keeps piling up
Possibly we need a compulsory spending floor. Like an inverse budget?
I want something costing $x but have held off buying it for over a year, despite having about 50x this readily accessible outside of our retirement savings.
Because it is clearly an extravagance, I struggle.
Possibly we need a compulsory spending floor. Like an inverse budget?
I want something costing $x but have held off buying it for over a year, despite having about 50x this readily accessible outside of our retirement savings.
Because it is clearly an extravagance, I struggle.
Last edited by Simple Simon on Wed Dec 08, 2021 3:11 am, edited 1 time in total.
25% stock, 25% bonds, 25% cash, 25% stuff
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Re: What is the simplest way to handle the household budget?
We automate our savings and then live within our checking account balance.
- Retirement gets auto deducted from paycheck
- Paycheck gets auto-deposited into checking account
- Roth IRA, recurring bills, charity, and credit cards on auto-withdrawel from checking account
- Keep the checking account balance between $6K and $11K and savings account emergency fund at $20K
- Skim transactions in mint.com
- Log net worth in a Google Sheet (https://cdn.zappy.app/dd94a626d3886dcfb ... 35fa1b.png)
Re: What is the simplest way to handle the household budget?
Set up an envelope system and any money not spent at the end of the year needs to be donated to the political party you didn't vote for in the last election cycle:) I know I also struggle to spend money like that because I know the toy probably doesn't matter. The idea of buying it matters almost as much as the use.Simple Simon wrote: ↑Tue Nov 02, 2021 5:05 pm Wife and I are both have difficulty spending money. Have never had a budget, yet the cash still keeps piling up
Possibly we need a compulsory spending floor. Like an inverse budget?
I want a cycling toy costing about £700 but have held off buying it for over a year, despite having about 50x this readily accessible outside of our retirement savings.
Because it is clearly an extravagance, I struggle.