I’ve lived in the same distressed house for 32 years. I’ve done the main things like making sure it had a good roof, termite protection, and new water heaters, but I’ve never had the money to do extensive decorating. Not because I don’t want to, but because I only have so much money to go on.

I keep an attitude of caution because I know that if I bite off more than I can chew, the cavalry is not coming to rescue me. And “that” is my budgeting tool. It is a very effective one. I never let myself get too happy. All bills are settled immediately, or as soon as possible. I only use credit cards in dire emergencies, and pay them off immediately.

My sister has quite a complex “budget”. And yet, she’s still in debt for her house at 62 years old. She walks on eggshells as a way of life.

I paid my house off in 1993. It’s a wonderful feeling knowing that no one will throw me out as long as I pay my taxes.

A budget is not for losers. It’s probably a very good idea, but just not for me. When I start adding up columns of figures, I usually end up with a messy page that no one can read, not even me.

On the months where there isn’t a lot of OT, I can still meet all my savings/investing goals and meet all bills. I use a modified version of Mary Hunt’s freedom fund to accrue all the quarterly and yearly bills (taxes, car tages, etc) and save for all the sporadic budget busters (car and house maintain and vet bills mostly). Funding that savings also comes out of the base pay.

I find that being very careful with my guarenteed income flow and more or less casual with the overtime works for me. When I still had a kid at home, it was that overtime fund that paid for camps, projects, vacations, etc.

http://www.pocanticohills.org/rockefeller/ledgera.jpg

If a person with poor financial habits decides to change their ways, it is important that they pick an approach that is easy and managable. The easier their budgeting system is, the more likely they are to continue using it and to break their bad habits.

Because my husband is not on salary (paid hourly) and our expenses vary so much from month to month, we’d be in trouble if we spent everything he made each month. There would be nothing for those months where our expenses exceed his income. The budget helps smooth everything over. My budget varies by month depending on the expenses I know will occur. (We shop for household supplies/food in bulk every 5-8 weeks, professional dues/expenses or insurance costs due once a year, etc.) So, we have saved the money from the larger pay months to pay for those larger expense months due to good budgeting.

I’m with you.

I’d much prefer to round up (under-budget, I suppose?) and be surprised at the amount of money I have, rather than play the round-up/down game which could cut short.

I’m still hammering away at a decent budget (new job, new expenses, make that a little difficult) but my wife and I are akin to overestimating expenses for the sake of always having a buffer.

The whole point of a budget is to ensure that you’re spending less than you’re earning. Put a little differently, the budget is to ensure that you have free cash flow left over.

Take out a certain percentage from your income for emergencies and then investments. The rest is for your bills and other living expenses. Keep it simple.

-limeade
http://fiscalmusings.blogspot.com

If fifty cents is a big deal in your budget, always round up and you’re guaranteed you won’t ever be off. Clearly this cannot be taken in a vacuum and if you’re going to be strategizing your budget, you would take that into account.

Incidentally, if your budget can’t handle being off by 50 cents, you need to add more buffer in your budget.