Comments on: Brief Look at Five Budgeting Systems http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html personal finance blog with anecdotes, advice and commentary. Sun, 08 Nov 2009 15:56:26 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Jenn http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-328673 Jenn Wed, 07 Oct 2009 18:23:52 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-328673 I do the To The Penny version, but now it's just because it's useful for long range planning. I started when income and expenses were very closely matched and I needed to plan ahead to make sure a bill wasn't paid ahead of the paycheck being deposited. With increasing salaries, reducing expenses, and no more debt repayment we now live comfortably on 50% of our take home pay. Theoretically I don't need to micromanage the money any more. Now I just do it because I like to have a plan and know exactly where things stand now and down the road. I do the Excel spreadsheet and have everything planned out 6-12 months ahead. It's not rocket science. Most of the money we spend is not a surprise. The phone bill is always due in week 3 of the month. The mortgage comes off every other Monday. We get paid on alternating Fridays. We spend the same on groceries and gas each week. I plan out the weeks in advance and then each weekend convert all my planned amounts for that week to the actuals that went through the bank account or onto the VISA. (I pay everything I possibly can on VISA for the travel miles, but I pay it off every WEEK. I've never paid interest). As the weekly "plug" numbers are converted over to the real amounts through the year I can see if I'm exceeding or bettering my planned amounts for each expense. The advantage of this system now, is that if I want to skim off some excess into our retirement fund I can enter an amount and see weeks/months ahead what effect it will have. I test lots of "what ifs" this way. I can accurately predict when we'll have the cash saved for a trip, a vehicle replacement, new roof, etc. At this point micro managing is just a habit and takes very little time. The trade off of never being surprised is invaluable. I do the To The Penny version, but now it’s just because it’s useful for long range planning. I started when income and expenses were very closely matched and I needed to plan ahead to make sure a bill wasn’t paid ahead of the paycheck being deposited. With increasing salaries, reducing expenses, and no more debt repayment we now live comfortably on 50% of our take home pay. Theoretically I don’t need to micromanage the money any more. Now I just do it because I like to have a plan and know exactly where things stand now and down the road.
I do the Excel spreadsheet and have everything planned out 6-12 months ahead. It’s not rocket science. Most of the money we spend is not a surprise. The phone bill is always due in week 3 of the month. The mortgage comes off every other Monday. We get paid on alternating Fridays. We spend the same on groceries and gas each week. I plan out the weeks in advance and then each weekend convert all my planned amounts for that week to the actuals that went through the bank account or onto the VISA. (I pay everything I possibly can on VISA for the travel miles, but I pay it off every WEEK. I’ve never paid interest). As the weekly “plug” numbers are converted over to the real amounts through the year I can see if I’m exceeding or bettering my planned amounts for each expense.
The advantage of this system now, is that if I want to skim off some excess into our retirement fund I can enter an amount and see weeks/months ahead what effect it will have. I test lots of “what ifs” this way. I can accurately predict when we’ll have the cash saved for a trip, a vehicle replacement, new roof, etc. At this point micro managing is just a habit and takes very little time. The trade off of never being surprised is invaluable.

]]> By: steve in w ma http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-325665 steve in w ma Sun, 23 Aug 2009 08:59:44 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-325665 Cash envelopes all the way. It is the *most effective* method I have ever used and I've tried most of them- "zero-based", reverse budgeting, and tracking to the penny. I've even tried the "no budget" technique. I'm still paying my debt off from that one! And the cash envelope system is making it possible. Nowadays, It only takes me maybe an hour in the entire month to make out my cash envelopes (I only use food, fun, and gas envelopes) and to schedule my online banking payments. And I'm saving about 40%, 60% if you count my debt payments as savings ( which is reasonable, because when I'm paid off in 2 years, those payments will be added to my savings as well) of my income. And I don't really need to think about money except for one time per month when I do my deposits and set up my envelopes and schedule my payments. (since I keep a two month cushion in my checking account). Cash envelopes all the way. It is the *most effective* method I have ever used and I’ve tried most of them- “zero-based”, reverse budgeting, and tracking to the penny. I’ve even tried the “no budget” technique. I’m still paying my debt off from that one! And the cash envelope system is making it possible.

Nowadays, It only takes me maybe an hour in the entire month to make out my cash envelopes (I only use food, fun, and gas envelopes) and to schedule my online banking payments. And I’m saving about 40%, 60% if you count my debt payments as savings ( which is reasonable, because when I’m paid off in 2 years, those payments will be added to my savings as well) of my income. And I don’t really need to think about money except for one time per month when I do my deposits and set up my envelopes and schedule my payments. (since I keep a two month cushion in my checking account).

]]> By: Ryan http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-302337 Ryan Wed, 22 Apr 2009 19:37:48 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-302337 I use excel and track to the penny. I can also use my bank's website to 'group' similar expenses together, so when I do budget for a month, it doesn't take as long. My fiancee doesn't appreciate the time it takes to do this, until she realizes that we have saved more each month since I started doing this in January. I use excel and track to the penny. I can also use my bank’s website to ‘group’ similar expenses together, so when I do budget for a month, it doesn’t take as long. My fiancee doesn’t appreciate the time it takes to do this, until she realizes that we have saved more each month since I started doing this in January.

]]> By: Randal http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227869 Randal Tue, 15 Apr 2008 20:28:49 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227869 unfortuantely mine is of the black box variety :( unfortuantely mine is of the black box variety :(

]]> By: Polly http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227205 Polly Thu, 10 Apr 2008 17:32:11 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227205 I use Quicken religiously (have it on my Axim PDA as well) so I always know exactly where I am financially (yes, I'm probably a little OCD). My budget is based on historical income and expenses. I live below my means. All but $250 of each paycheck is deposited into a savings account linked to my checking account. Money transfers automatically when needed. I transfer any money leftover from my previous check into savings as well. I have no debt other than my mortgage, which I am now "snowballing," and I contribute 10.5% of my income to my retirement account. My goal is to pay off my mortgage and live debt free! I use Quicken religiously (have it on my Axim PDA as well) so I always know exactly where I am financially (yes, I’m probably a little OCD). My budget is based on historical income and expenses. I live below my means. All but $250 of each paycheck is deposited into a savings account linked to my checking account. Money transfers automatically when needed. I transfer any money leftover from my previous check into savings as well. I have no debt other than my mortgage, which I am now “snowballing,” and I contribute 10.5% of my income to my retirement account. My goal is to pay off my mortgage and live debt free!

]]> By: CH http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227167 CH Thu, 10 Apr 2008 13:57:11 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227167 We use the reverse budgeting pretty effectively. We use the reverse budgeting pretty effectively.

]]> By: Jane http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227164 Jane Thu, 10 Apr 2008 12:46:49 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227164 I Reverse Budget/envelope system. The reverse budget is my main point where I autodraft each paycheck. I use the envelope system in the broad sense as I give myself an "allowance" of cash for most of my expenses each paycheck as well. I Reverse Budget/envelope system. The reverse budget is my main point where I autodraft each paycheck. I use the envelope system in the broad sense as I give myself an “allowance” of cash for most of my expenses each paycheck as well.

]]> By: saladdin http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227129 saladdin Thu, 10 Apr 2008 00:57:55 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227129 To the penny with excel. saladdin To the penny with excel.

saladdin

]]> By: Lord http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227103 Lord Wed, 09 Apr 2008 20:30:58 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227103 I track to the penny by envelopes. It only takes a second to categorize receipts and stuff them into envelopes. At the end of the year, it takes only a few hours to tabulate and balance. Painless and informative. I track to the penny by envelopes. It only takes a second to categorize receipts and stuff them into envelopes. At the end of the year, it takes only a few hours to tabulate and balance. Painless and informative.

]]> By: ACAShereIcome http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227097 ACAShereIcome Wed, 09 Apr 2008 19:41:46 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227097 I track to the penny using PearBudget. I keep it simple only tracking 8 variable and 6 irregular expenses. It's easy for me to keep track of since I place most every purchase on plastic. I track to the penny using PearBudget. I keep it simple only tracking 8 variable and 6 irregular expenses. It’s easy for me to keep track of since I place most every purchase on plastic.

]]> By: Darin H http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227088 Darin H Wed, 09 Apr 2008 18:00:31 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227088 We track to the penny, mostly because I enjoy it. We track to the penny, mostly because I enjoy it.

]]> By: Marie http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227077 Marie Wed, 09 Apr 2008 16:38:49 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227077 We track to the penny. We are presently a family of 4 living on 21K a year. Next month we move into a house (tax return was our downpayment) and triple my spouses income. Because homes can bleed money we are going to continue to track to the penny. It will be interesting if we give it up in a year though when things calm down financially. We track to the penny. We are presently a family of 4 living on 21K a year. Next month we move into a house (tax return was our downpayment) and triple my spouses income. Because homes can bleed money we are going to continue to track to the penny. It will be interesting if we give it up in a year though when things calm down financially.

]]> By: Mr. Stupid http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227075 Mr. Stupid Wed, 09 Apr 2008 16:28:24 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227075 Me and Mrs. Stupid use the "Nothing" strategy, with the "$200 Veto rule". This means that if either of us wants to spend more than $200, we have to run it by the other first. When I first started budgeting, we tracked absolutely everything, but as I've accumulated more wealth, I've accumulated more numerous and complex accounts. At one point I had to give up, because Quicken did a horrible job of tracking things like the sale of stock options, split trannys with a double lyndie, and various other basic financial tasks. -mr. s Me and Mrs. Stupid use the “Nothing” strategy, with the “$200 Veto rule”. This means that if either of us wants to spend more than $200, we have to run it by the other first.

When I first started budgeting, we tracked absolutely everything, but as I’ve accumulated more wealth, I’ve accumulated more numerous and complex accounts. At one point I had to give up, because Quicken did a horrible job of tracking things like the sale of stock options, split trannys with a double lyndie, and various other basic financial tasks.

-mr. s

]]> By: GBlogger http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227066 GBlogger Wed, 09 Apr 2008 14:49:24 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227066 We are fairly close to Savvy in terms of methodology -- we reverse budget by having a large part of our saving/investing automated, we use Quicken to get some periodic check-ins on our expenses, and we use a spreadsheet to look ahead. Since most (though certainly not all) of our expenses make it into Quicken, we can take a pretty decent look at our expenses if needed. I wrote two recent posts on what we do with budgets (How We Try To Control Our Expenses Without Much Of A Budget and Silly Rabbit, Budgets Are For Kids--How We Do Use Budgets). It's interesting to hear about the PFBloggers conference, Jim -- blog more on that, if it strikes your fancy! We are fairly close to Savvy in terms of methodology — we reverse budget by having a large part of our saving/investing automated, we use Quicken to get some periodic check-ins on our expenses, and we use a spreadsheet to look ahead. Since most (though certainly not all) of our expenses make it into Quicken, we can take a pretty decent look at our expenses if needed. I wrote two recent posts on what we do with budgets (How We Try To Control Our Expenses Without Much Of A Budget and Silly Rabbit, Budgets Are For Kids–How We Do Use Budgets).

It’s interesting to hear about the PFBloggers conference, Jim — blog more on that, if it strikes your fancy!

]]> By: savvy http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html/comment-page-1#comment-227061 savvy Wed, 09 Apr 2008 13:29:06 +0000 http://www.bargaineering.com/articles/brief-look-at-five-budgeting-systems.html#comment-227061 I use reverse budgeting. However, I use MS Money and review the monthly reports to see if any categories seem out of line with the somewhat arbitrary 'budget amounts' in my head. I also use an Excel spreadsheet to look ahead in terms of irregular or one time expenditures (yearly dues, large purchases). I use reverse budgeting. However, I use MS Money and review the monthly reports to see if any categories seem out of line with the somewhat arbitrary ‘budget amounts’ in my head. I also use an Excel spreadsheet to look ahead in terms of irregular or one time expenditures (yearly dues, large purchases).

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