Budgeting, But How?
Budgeting was on my mind. Husband and I just spent some time seeking to pare down several of our budget categories due to an unforeseen change in circumstances. An accumulation of funds carefully saved in a few areas was an asset and helped in the making of decisions.
Our budget is of the monthly kind. So much is put aside for food, clothing, car, etc. each month and we work diligently to stay within those boundaries. Normally, this has worked well and given us a plan that needs little tweaking. Usually, we meet once each year to review our projected costs and make any changes needed at that time.
Recently, though, I have been contemplating the budget style recommended by some others well versed in making ends meet. Suggestions to set a new budget every week or when a paycheck arrives provides more flexibility for finding extra cash or trying to meet financial goals. Somehow this has always seemed to require more time and effort and I am not sure how all the budget areas would fare at the end of the year.
However, a major car repair, a broken lawnmower and a non-working dryer, have caused me to reconsider my budgeting strategy. Grateful to have had some extra in the car repair budget our needs for this area were met. But as this was one of the funds we had pared down just recently that empty spot on the page has me wondering if we can get our funds replaced before the next break down. The lawnmower has been limping along all summer but now is in total rebellion and of course that is the other fund that received a major slash! The hot Texas sun makes the dryer the least of my concerns and actually the electric bill has improved nicely.
It has been tempting to think of repurposing some budget categories based on the needs of this moment, but I can’t help wondering how this all works out in the end. Ultimately, it would seem to me reworking my expenses will only deceive me for the present and create an endless cycle of living by the “tyranny of the moment.”
What do you think? Which budget works best for you?
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4 Responses to “Budgeting, But How?”
September 2nd, 2010 at 7:13 am
It was a monetary investment but mvelopes.com was awesome for us. It budget, fund the envelopes and then spend. It is basically the envelope system but on the computer so I’m not making change all the time. We had planned to pay off 10k in debt in 12 months but with this we could easily make changes and became more aggressive each month and paid it off in 5! It is the best tool I’ve ever used. But yeah we do a monthly budget that is funded every two weeks.
September 2nd, 2010 at 11:33 am
We use a really weird system that my hubby designed 12 years ago. We call it Bogus Bucks. We both work, and we both get paid twice a month. We set up a spreadsheet with four columns on it, two for my paycheck, two for his. Next we decided what recurring expenses we have. Everything from insurance for the house and car, to gifts, to Christmas gifts costs, gas, etc. Then we decided how much we thought we spent in a year on these categories, and we divided that figure by 26 (the next of paychecks in a year.) Then we arbitrarily decided whose check it would come out of, and set up the spreadsheet to reflect that–for instance we might take $150 out of both of my monthly paychecks for food. Then we set it up in Quicken so that we have all these categories, prefaced by the word “Bogus”, for example Bogus Mortgage. Then when we get paid, we pull out the spreadsheet and “pay” into the Bogus accounts. So, if Bogus Christmas had $75 dollars in it, and it was payday–and we had decided our Christmas costs were $650, then we would take $25 ($600/26)and add it to that Bogus account. By the end Christmas, we’d have the whole amount ready. We save this way, and then tweak as we go along. For example, if our gas costs have changed, because either the price of gas dropped, or we didn’t use as much gas as we thought we would–we might decide to move the extra into our travel fund. We look at the big picture once every few months and move funds or change amounts budgeted accordingly. We have never not had money for something we have needed. Live well within our means, and never stress about money. It’s a Godsend!
September 4th, 2010 at 1:52 pm
This is something I’ve been thinking about a lot lately–budget per payday vs. monthly, but..I’m also thinking about a complete overhaul in expenditures as a whole.
My car is a 2005. When we bought it, we paid cash. That allowed us more bargaining power for a new car vs. a used one, plus–no car payment.
Soon we’ll be debt free, but now I’m thinking..about my car. Its getting older; it visits the parts store a little more often than it did. I’m thinking about..instead of focusing on car repairs; focus on saving to buy a new one–same as we did last time. As cars get older..they break down more and more. You pay for it either way.
It’ll take awhile; probably three years to save up but in the long run..it’ll pay us back with dividends, and..I keep the interest on the savings.
September 4th, 2010 at 7:43 pm
Each month, we make sure we have a decent amount going into a category we call “major purchases”. It’s another form of savings. We move a set amount over every month. Then, when we have a big repair or need to replace something, it comes from that account. And, since a set amount is moved to a savings account every month, when the end of the year comes and we haven’t needed it all, it rolls over into the new year as seed money. No starting over every year. It’s worked well for us for years.
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