How Do You Budget?

[broncoFan!]

Hey, I'd like some help with this folks because I finally have some money saved up and I don't want to lose it.

"A fool and his money are easily parted." This has been a quote that I have tried to live my life by.

How do you determine how much to spend on food daily?

That seems to be my biggest expense and I'm even trying to cut back on that for times of emergency and whatnot. (I like to be prepared for any and all scenarios that could happen.)

Does anyone have a good budgeting program that they believe works, and is effective in saving?

For the record, I just got a new job that earns me $10 an hour (not bad) with room to move up the corporate ladder.

So I will be having some income coming in so that I can make my budgeting program work. On a side note, if you don't feel comfortable sharing please don't. I know that talking about money makes some people queasy and/or nervous. I totally get it, I used to be like that too, so don't feel obligated to share by any means.

[Remedy]

poorly.


that's how I budget.

[Rastic]

The best place to start is identifying what you want to achieve. As the saying goes, if you aim at nothing you'll hit it every time.

Having a goal makes budgeting easier.

[#87Birdman]

poorly.


that's how I budget.

Sounds like mine.

Spend money
run out of money get second source of income
Continue to spend money
Run out of money get another source of income
Continue to spend money
ect....

[broncoFan!]

The best place to start is identifying what you want to achieve. As the saying goes, if you aim at nothing you'll hit it every time.

Having a goal makes budgeting easier.

That's a good place to start.

So I'm thinking...what about $6,000 saved up for a car/college? That sounds like a good goal to have.

I've almost paid off my phone, I only have a few hundred dollars left on it and then its paid off, so that's one less expense I have to worry about.

How much do you think I should save up for my next car? Is 6 grand enough?

[HUMCALC]

That's the nice part of being bankrupt, you don't have to worry about this. In all seriousness, you make a list of your expenses and compare it with your income. See what you can whittle off the expense list, until you're happy with what you have left

[johntbronco]

I find that the more money you have, the more money you tend to spend.

My family likes to eat out alot. This is where a big waste of money. I have a family of 4 and I find you can dump easily 50-80 bucks per meal at a sit down dinner.

When we do go out now, I act sometimes like scrooge.
- I don't allow anyone to get drinks other than water. (This saves at least $2.00 per person)
- i limit what they can order. (request they get a $9.99 meal instead of a $15.99 meal)
- i try to use coupons like livingsocial.com or groupon.com or a local coupon in the mail.

[johntbronco]

That's a good place to start.

So I'm thinking...what about $6,000 saved up for a car/college? That sounds like a good goal to have.

I've almost paid off my phone, I only have a few hundred dollars left on it and then its paid off, so that's one less expense I have to worry about.

How much do you think I should save up for my next car? Is 6 grand enough?

I think 6 grand for a car is reasonable. That would get you a decent used car that is reliable but not flashy. Cars are the biggest waste of money in a persons lifetime. Don't think of a car as something to impress others. Think of a car that will be able to get you to college/work/etc. in a reliable manner.

[Rancid]

Pay yourself first...

Meaning, take some part of your income and put it somewhere where it is inconvenient to touch it such as a Savings Account or a Money Market account. $50 a Month is a good painless start which gives you $600/Year.

If you want to stretch your dollar, hit the coupon sites. I posted the one I use to keep an eye out for free stuff or things that cost nearly nothing. It also tracks what is on sale at my local stores. So, I buy things I may not need now, but for far cheaper. In a couple months it adds up.

http://www.couponmom.com/

Finally, learn how to say 'No'. We run short on cash because we overspend; not all at once, but incrementally, a latte here, a $15 lunch there, $25 for a night out at the movies.

Budgeting is more about preserving your money and still being happy rather than doing without. Don't make it like a diet-- we all know diets fail or have a finite duration bringing them to an end. Make a plan and strategize so you can set yourself up for success.

[CanDB]

I am going to offer a different slant to budgeting than I have in past (where I have listed all the typical expense categories), which I hope will help you. So here goes:

1) On the expense side - For at least one full month, keep track of every expense you make. Document and categorize once you are feeling confident about category definition. There are many obvious categories (mortgage/rent, food, electricity, gas, communication(internet/phone), transportation, repairs/upgrades, water, tuition, memberships, entertainment, etc.), but for tailored budgeting, I suggest you start from scratch, and track every dollar spent......AND I DO MEAN EVERY DOLLAR!
2) After a month or so (preferably two or more), review and categorize, and consider things you will spend on, that did not register in month one. Perhaps you have seasonal expenses or memberships, or trips planned, or even consider having an "unexpected" bills category, that will act as a buffer for what you did not foresee. As others have said, you tend to spend what you have, so leave yourself a category for safety purposes.
3) Carefully assess all those seemingly simple expenses that may cause you to go down fast.....like those extra beer/fast food you may like, or tickets for lotteries/pools, or gifts, or a huge array of incidentals...that all add up!!! Don't forget typical expenses, like haircuts.
4) Determine what your net income is per month. Make sure you deduct all taxes, benefits, etc.
5) When you feel confident you have captured your typical spending amounts, compare to your income, and determine the plus/minus outcome. Clearly, if you spend too much, you have to either cut some expenses, or make more money (or last and least recommended, get a loan). Hmmmmm. On the other hand, if you are in a positive situation, you can then consider savings, and even purchases of goods/services.
6) I am not big on debt, but some debt is very common and normal. Mortgages and car payments are typical as are student loans. BUT, stay away from unnecessary debt. It is a curse!!!

Hope this helps. I may add more later. Feel free to pm me if you have some questions.

[kishzilla]

Some general guidelines:

~Buy used. Everything. Except for the obvious, i.e. underwear, toothbrushes etc.

Making $10 an hour, you're not going to likely have much extra money to spend, so get familiar with thrift stores, vintage clothing stores, garage sales, craigslist etc. etc.

The phone you got for example, you could have potentially purchased used or one very similar for really cheap on craigslist.

I very rarely buy new unless there are no other options or unless I can get the same thing deeply discounted/ close to the price of used. It's been a very rare occasion that buying used has come back to bite me, and most of the time it's like new anyway. So in general, look for deals on craigslist, ebay and other resources.

~Another one. Eat out as little as possible.

Don't eat out or buy snacks etc. at convenience stores etc. It's such a huge waste of money. It can be hard, especially for lunch. I know for me it was hard because I'm up so early and don't give myself time to make a lunch, and I don't work out of an office where I can keep food, and I'll just go out and get a sandwich from subway or something. But you do that enough, and it adds up QUICK. You figure $10 day for lunch or so, and all of the sudden you're spending $200 a month on lunch. That's a car payment, or insurance or any number of other things you could have paid for instead.

$20 will buy you a whole weeks worth of bag lunch and it'll be better for you and you'll probably have more food anyway.

~Set up bills for auto payment.

This one gets people because they don't like the idea of bills just getting paid without being able to look at them first, or they are afraid that they don't have the money to pay them in the account etc. etc.

But if you forget, you get hit with late payment charges etc. that add up real quick. I am forgetful with bills, and this has saved me a lot.

A lot of other people may disagree and say you should have control over it and be able to shuffle money around but imo if you can't have things set up for auto withdraw then you need to eliminate bills from your budget. You can have your bank set up to pull the money from savings if there is a problem, and you should try to keep a decent chunk in a general savings at all times anyway.

~Stay away from department store credit, Best buy credit etc. etc.

This is a one way ticket to indentured servitude to debt. If you can't buy it cash on craigslist or something, YOU DON'T BUY IT. Simple as that. Do without the latest and greatest. It means more to you now than it will later, and you will be paying for it now AND later if you cave and blow money you don't have on "stuff".

There are only two things that I will accept as debt anymore and that's my House and my Truck. The truck will be paid off next year, and when that's done, I'll never purchase another thing on payments ever again if I can help it, other than real-estate. Paying money to get money (interest) is the equivalent of setting it on fire, so avoid it at all costs.

Again, these are just general guidelines. There's a lot more to each of them but in general not only will they save you money, but they will instil a frugal attitude when you find good deals on things etc. You'll learn to haggle, you'll learn to be patient and wait for the right deal etc. etc. which are traits that will help you in life immensely. It's saved me more money than I can tell you.

When the recession was in full swing and I lost my job and was unemployed, it really changed the way I lived forever, and for the better. I came out the other end of it smelling like a rose because I really had to get the nut tightened down all the way and learn to live with a lot less. Now that the economy is doing better, I'm in a perfect position to be prepared for any other setbacks because I eliminated debt, got down to the bare essentials, and learned to only buy things when I had the extra money. Extra being money after I had put some in savings and paid all of my bills etc.