Frugal Living 

Your Take: Do You Budget?

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Clever Way to BudgetToday’s Your Take will be simple… do you budget? If so, what tools do you use?

If you don’t, why not?

I no longer budget in the strict sense. When I first started working, I budgeted and tracked all my expenses down to the penny in an Excel spreadsheet. This was before the days of tools like Mint or Quicken Online where you could use a free tool and get instant data aggregation (that would’ve been nice!), so I just entered things into a simple Excel spreadsheet. Then, perhaps a year or so later, I abandoned it because the benefits had started to wane.

Once you get to a certain point, when your expenses are stable and you’ve “optimized” your budget as much as you can, the effort no longer justify the benefits. Today, I do “after-action” type budgeting where I look at my expenses to see if anything is extraordinary or if a certain category has been creeping up (usually it’s the dining out vs. grocery bill categories constantly battling one another). Other than that, I don’t.

How about you?

(Photo by kevincortopassi)

{ 37 comments, please add your thoughts now! }

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37 Responses to “Your Take: Do You Budget?”

  1. Tim says:

    rack us up for having an excel spreadsheet as well, and having a loose budget, too. all our savings/investments are automatically done every pay period, so whatever is left goes into our money market account.

    like @Glenn, we project our routine bills like utilities, or fixed bills like cable on the spreadsheet. Our idea of budgeting is that I put a limit of $x for each credit card (we use different ones depending on the kind of purchase) each month, and we try to maintain under that amount (which is normally the case). these are inputted as debits like any other bill in our spreadsheet. i have two columns, estimate and actual, which allows me to delineate what should be our limit for x credit card and allows me to adjust what we actually spent. it’s quite simple to use the =sum() function. i too project out 1 year in advance.

    each month shows all our bill and our saving/retirement/investment accounts. it does take one whole sheet per month, though.

  2. Chelsea says:

    Hi Jim,

    What I’ve noticed I do now that I know where my money tends to go (i.e. I spend more on dining out and tech gadgets than I should!), I made a point to cut back on those activities. Since I’ve substantially changed my behavior, I don’t need a budget to keep an eye on each day. Instead, I just want to know when I’m getting close to racking up spending where I previously said I would not.

    There are free ways to set this stuff up once and let it ride for a few months. I think, especially when paying down debit is involved, a strict budget makes perfect sense. You’ve got to create the discipline to allocate your money to one place instead of another if it doesn’t already exist.

    But, like you’ve touched upon above – I have changed my behaviors for the better overall. I don’t dine out nearly as much as I used to, and I watch the grocery spending by seeking out sale or generic items for a percentage of my grocery shopping. A daily budget isn’t so much my thing any longer.

    – Chelsea (from Quicken).

  3. I don’t agree with the comments that budgets take too much time, unless, they are keeping an itemized expense log or something. The point of the budget is to tell the future dollars where to go. So for that purpose all we need to do is just keep a running tally of the how much we spent for the month vs. what we allocated. For example, when I do my grocery shopping I just add the bill’s total amount to what I’ve spent so far on grocery. So if I spent $25 today, and I had spent $75 for the month, I just change the month’s total spent to $100. We don’t need to itemize the bill. An effective budget takes about a minute a week! I recommend doing a budget on Google Docs spreadsheet where you can update it from anywhere.

  4. I use Excel to budget, but I pad knowing there will be some flexing involved– some items will be higher and some lower. I go with the worst case scenerio and hope for pleasant surprises . . .

  5. I budget in a regular notebook. What usually happens though, is that I just stop writing things down towards the middle of the month. I definitely need to come up with a better system.

  6. Slackerjo says:

    I have all my fixed costs listed in an excel spreadsheet. On payday, I withdraw a big stack (well to me it’s a big stack) of $20 bills and that’s it until the next pay day. Everything else is zapped out. A chunk of the $20 bills are spent on payday. I put gas in the car, and buy 2 weeks worth of groceries. I also make sure I have $3.50 in change for laundry clothes air dry).

    All that’s left is disposable income. That stack of $20 bills is split in two and put in 2 cans in my kitchen. I generally don’t carry money with me unless I specifically go somewhere to spend it.

    I’ve been doing this for years and I have no money stress or worries.

  7. jillianlou says:

    I use an Excel spreadsheet and sometimes though it doesn’t categorize things as well as I’d like.

  8. daemondust says:

    I don’t budget, per se, but I do have a pretty good idea of how much goes where. I do have Mint send me warnings when one area gets a little more than usual, but that doesn’t happen often anymore.

  9. George says:

    I keep a budget and checkbook register in Excel. It give me peace of mind to know how much I’m spending during the month and to make adjustments if necessary. Also, I don’t want to give the bank my money in the form of overdraft fees.

  10. Chris says:

    Budgeting is painfull and time consuming. However, without it my financials would be much more difficult to manage.

  11. Jenn says:

    I plan out all future spending in excel one year in advance. For phone, cell, mortgage, insurance etc, the amount is fixed, as is the date it automatically charges to the VISA or comes out of the bank account. For unfixed items (gas, groceries) I plug in an amount for each of us to have 1 fill up per week and a set amount for groceries. The amounts are based on prior history and rounded up slightly. Each week I replace the estimated amount with the actual amount. As I work my want down the rows with each passing week the debits/credits come and go and the running balance in the last column adjusts automatically and I confirm every few days that it matches the bank balance. Everything possible is paid either automatically or manually by Visa (to get the flight miles). I check the online VISA for newly posted items and pay it off weekly (this is where many of the actual numbers come from for the updates).

    As boring as it sounds we generally don’t spend other than the regular monthly utilites, mortgage, gas, groceries. We plan for $60/wk for misc, but so far in 2010 have only taken it out twice – I may remove it from the plan in future as we clearly don’t have many places to spend cash. I work from home at the moment so no spending opportunities. My husband doesn’t drink coffee and he and the kids all pack lunches so no spending required during the day. We do groceries and fill up the cars each weekend.

    We haven’t had cable in 20yrs. The 6 channels we get off the air are more than enough to keep us glued to the TV far too much as it is. We don’t specifically budget for clothing or entertainment as we rarely spend on these categories. It wouldn’t make sense to enter an amount every week or month and have to keep moving it to the next month when it doesn’t get spent. With kids homework and sports practice our weeknights don’t allow for “entertainment” and it’s just not us to run out to eat or hang around in a bar. On weekends we do family outings, hang out at home and relax or do odd jobs.

    Our simple lifestyle means we cover the basics with 55% of our take home. Having all our planned expenses mapped out a year in advance means I can assess every week how much I can skim off and send to our retirement accounts or extra mortgage payments. If we do have a rare extra expense to cover I just skim off less or don’t skim off the excess at all for the required number of weeks to pay for it (clothing, restaurant meal, snow tires, vehicle).

    We realize our scaled down lifestyle isn’t the norm, but we’ve chosen to do without a lot of stuff others consider basics, but on the other hand we splurge on travel. Marked down groceries on one hand, Europe for a month with the kids on the other hand. Strange but it’s a balance that works for us.

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