Comments on: Stupid-Proof Budgeting

By: K

Fri, 10 Jul 2009 11:06:45 +0000

An even easier way to budget is to use the 60/40 solution. Basically, no more than 60% of your before-tax income should be spent on regular expenses like food, rent or mortgage, car payment, etc. The buckets go like this:

60%: all regular expenses like taxes, mortgage, food, car payment, utilities
10%: short-term savings for irregular expenses like home or car repairs
10%: long-term savings like an emergency fund or college savings
10%: retirement savings
10%: fun money- spend however you want

You can change some of the percentages if you need to and also add a category for charity.

Setup separate savings or checking accounts for each category and if you can setup different direct deposits, it makes it really easy.

Then, you don’t have to track individual purchases. If your fun money account is low until next paycheck, then that is that. If your 60% account is continually overdrawn, then you need to cut down expenses in this area.

This is based on an MSN money article I read a few years ago. This plan enabled me to save tons of money without having to carefully track things.

By: Matthew Van Gundy

Matthew Van Gundy — Fri, 10 Jul 2009 04:46:38 +0000

mint.com is a great concept and seems to have a lot of cool features, but I don’t think I could *ever* bring myself to use them with their current security model. I’m a Ph.D. student studying computer security. mint.com has come up in a number of conversations in our research group as an example of an unfortunate security design that needs improvement.

I give mint.com the benefit of the doubt. I believe that they probably do everything that they can to protect your private information and your online banking credentials. However, nobody is perfect and security compromises happen. The fewer people/organizations that know your secrets (online banking credentials, transaction history, etc.), the fewer people that can reveal them.

It’s not mint.com’s fault, they’re trying to create tomorrow’s web application using widely adopted (read yesterday’s) technology. I hope that some day soon it will be possible to write web applications that provide useful services with our online banking info without having to disclose all that information to the application developer. But, right now, the technology just isn’t here.

For the time being, I’ll be doing any software-assisted budgeting on my home desktop.

By: Corporate Barbarian

Corporate Barbarian — Mon, 06 Jul 2009 21:10:57 +0000

I use an Excel spreadsheet. I can rearrange it into any configuration that suits me at the time, and I keep it password-protected on my home computer. I’m still a little leery about putting all of my personal info on the web.

By: DDFD at DivorcedDadFrugalDad

DDFD at DivorcedDadFrugalDad — Mon, 06 Jul 2009 03:29:28 +0000

Nice approach! For some, any approach would be good– too many people have no idea where their money goes . . .

By: Patrick

Patrick — Sun, 05 Jul 2009 12:50:47 +0000

I have been meaning to try mint out for a while, but some of the possible security issues have scared me away. I will have to sign up and at least give it a try to see how well it works.

By: Damon Day

Damon Day — Fri, 03 Jul 2009 19:29:23 +0000

I have heard an awful lot about Mint lately from the personal finance blogs I have been following. I have always used quicken and have never had any problems with it. Now that it is free is even better. I always have my clients go and set up a quicken online account as one of the first things to do when starting a plan for paying down debt. I haven’t had them reporting any major problems with them. So that may be an alternative for people that don’t have access to Mint. Not sure if Quicken works in Canada but they are a much larger company and have been around longer so there is a chance they have something for our neighbors to the north.

By: Caitlin

Caitlin — Fri, 03 Jul 2009 12:38:41 +0000

@Kathryn and @Kyle – me too! We really need something like this for Canadians!!

By: Wise Money Matters

Wise Money Matters — Fri, 03 Jul 2009 03:09:48 +0000

@Tom
This is just “variable” expenses. It doesn’t include mortgage or anything of the sort. It is what’s left over after those bills. We also have an extra $300 that we put into long-term savings every month.

@All anti-Mint people
I’m not saying that Mint is the BEST option out there. It is just the one that I use and enjoy. Frankly, I only use this stuff you see from Mint. I don’t really check their “Trends” options or any of the other features because I hate budgeting. Mint made budgeting really easy for me.

I recently found out that Quicken Online has a similar structure for this type of thing. And there’s several other similar options out there. Do what works for YOU. I just found that this setup worked great for me and thought I’d share it.

@Modder
Tithe is 10% of our income. That is what the Bible tells us to do. When we started doing that consistently, we doubled our income a few months later. After that we doubled our giving. 10% for tithe. 5% for Extra giving which is to take kids from the youth out to lunch or this month we’re donating to the local Christian Radio Station. 5% for “Imagine a Place” which is like a building or growth fund for our church. Also not listed here is $30 per month for Compassion International. Nobody tells us or pressures us to do it. Our pastor actually avoids topics about tithing because he feels it’s like him asking for money. I actually gave a recent sermon about tithing so the pastor didn’t have to last year.

We choose the percentage we do and we are happy to do it. I find that giving is one of the most enjoyable things I do. We hope that with our next increase in income, we can increase our giving to at least 30% of our income. My long-term goal is 50% but I’m sure that’s a ways off.

And while the amounts of these items are around the same every month, I put them in a micro budget because they are paid at different times. Tithe and Imagine a Place are paid when we get paid. Extra giving is simply as we feel we need to help someone or give to an organization. I like to keep track to make sure we didn’t forget to give in one of these areas as I feel they are the most important on our list.

By: Mat

Mat — Thu, 02 Jul 2009 20:54:08 +0000

I tried Mint too and while it worked with my accounts, I had issues with it’s features. I can see where it will be good in the future with more development, but right not it’s pretty wonky.

The being said, I’ve been using Yodlee and have been enjoying it so far. If you can’t use or don’t like Mint I highly suggest checking out Yodlee.

By: sarah

sarah — Thu, 02 Jul 2009 20:47:15 +0000

I love Mint! I just switched over to it a few months ago. If Mint wont work for you, another great tool to try out is Yodlee. Its completely free & secure. I used it for years until they quit supporting my bank (small local bank). Check it out & see if it supports the financial institutions that you use.

By: Craig

Craig — Thu, 02 Jul 2009 20:14:43 +0000

@Tizzle @Emma @Kathryn

Full Disclosure: BudgetPulse.com is another personal budgeting software that may be of interest. Mint.com syncs with personal account information. We do not. Our users manually input their data or can import their financial bank statements in minutes. Our tool is international compatible and can be used with any bank or credit union. We also have the ability to track cash transactions. If anyone has any questions, please feel free to contact me.

Craig Kessler
Marketing Director at BudgetPulse
craig@budgetpulse.com

By: Kyle

Kyle — Thu, 02 Jul 2009 19:42:27 +0000

Anyone know when they are going to publish a MINT for Canadians?

By: emma

emma — Thu, 02 Jul 2009 19:42:12 +0000

I also tried Mint several months ago, and unless they updated their site, I couldn’t use several accounts with the auto upload feature, and others had to be manually imported every month. It was more trouble than an excel spreadsheet. Though I really, really like the idea.

By: Kathryn

Kathryn — Thu, 02 Jul 2009 18:41:08 +0000

I look forward to the day we have mint.com in Canada. Until then, we use wesabe which is good but not nearly as good as mint.

By: Modder

Modder — Thu, 02 Jul 2009 18:21:37 +0000

While I get that this budget is illustrative I am still shocked to see tithing as the biggest line item at 20% of total budget. And then there is extra giving … bringing up the total to 30%.

As an atheist I have no-one pressuring me to give. So I had no idea how much religious people give. But 20 or 30% way exceeds what I expected.