How do you stay on budget? What do you struggle with, and what works for you? August 18, 2009
Posted by dailysavingsfromallyou in Uncategorized.trackback
My family really struggles with keeping on budget. I would have a pretty good idea of where we’re at, but my husband’s taking out money too and we never find the time to sit down and track every expense and reconcile everything. The truth is, despite our talk about making these financial meetings happen, we seem to have an unspoken agreement to avoid dealing with the messiness of money .
I know, it’s a disaster waiting to happen. But by the time we’ve gotten the kids in bed and cleaned up the kitchen, it’s about 10pm. At that point, since we’ve been up since about 6am, we usually agree that tonight, we have to sleep (or change the cat litter and put out the recycling or fold the laundry or watch a movie– some need that’s more pressing at that moment). The result of not paying close attention to our spending? We end up buying random things we haven’t budgeted for — a pizza, lunch out, a soda here and there, some plants at home depot, a great deal at a tag sale. Too many of those things and we end up going into overdraft (which is a credit card) and adding to our debt more than I’d like to admit.
The one reliable system we use is to put our bills on autopilot. I’ve set up most of my bills to be paid by my bank automatically, so that at least when we’re losing track of our spending,I’m not putting our credit rating at risk. I also have a budget I created on excel, which I print it out so I can put a check in next to each bill that I have to pay. When I’m being good, it helps to ensure that I’m paying everything on time, but it doesn’t track small spending, which I think is what I need to really start reining it in. I’ve used quickenonline.com, a free money management system that connects to the information from my bank account and predicts upcoming expenses based on my experience. That’s pretty good, but it can get a little confusing as sometimes it seems to repeat bills and I have to fix it. I understand that mint.com, another free money management system, is very good, but I t think a paper budget might work better for us, since I don’t know if I’ll sign in online every day.
I know we can live within our budget on paper. But we need to implement a system that will help us in the real world. Do you struggle with spending less than you earn? What system works best to keep your spending in line?
[...] Though creating a budget often seems easy on paper, the real world can often interfere with a strict spending plan. Offer your tips and hear others’ tricks at our Real Women, Real Value blog. [...]
Tracking what you spend, really tracking, capturing each expenditure, is the only way to get an idea of where your money is going.
Use a debit card instead of cash whenever possible so you get an itemized list of purchases in your bank statement. Get receipts and put them in a designated place so you can match them to the bank statement.
Figure out what expenditures you and your family really want to make and plan for them. Do you really need that Starbuck’s run? Maybe you do, maybe not, maybe you can find another, less costly way to get your fix.
Where can you comfortably reduce expenditures? Surely, a little planning can help you save on food, entertainment, and other expenses. Look for, clip, and use coupons. Plan weekly menus and shop and prepare ingredients ahead of time so making meals only takes minutes. Find free or low-cost family activities.
Establish a discretionary allowance for each family member. When the allowance runs out, that’s all until next month.
Make it a game. Challenge family members to find ways to cut expenditures and save money.
Have funds direct deposited to a savings account so you don’t see it. Over time, even small amounts will accumulate.
When was the last time you reevaluated your insurance and communications plans? Hint: Members of AAA can save a lot by switching their insurance (auto & home) to AAA. It pays to belong.
My husband gets paid monthly, so things can get pretty tight by the end of the month. One way to keep better track of how much we are spending on things like dining out is an envelope system. We place a set amount of cash in an envelope for dining out & when the money is gone, there is no more dining out!
Dear Unorganzized,
I too have struggled with disorganization for years. I seem to have it all together on the outside but my mind was usually a crowd of “have to’s” and “shoulds.” It is only within the past few months (and with my husband’s help) that I have been able to gain serious ground in my pursuit of the holy grail of order. I keep a simple notebook, not a planner or blackberry, a notebook. As I think of things, I write them down. When, by some miracle, I accomplish something then I cross it off the list. Just the simple act of putting pen to paper helps to ease my mind. It no longer is a looming worry but now it is something I can see and deal with when I am ready. The emotional rush of crossing a “to do” off my list is enough to keep me going to the next mission. Good luck!
We are using http://www.moneycenter.yodlee.com — you can enter in all your family’s different accounts (bank, credit cards, etc.) and whatnot and see them in one place. It makes it so much easier to see our big picture. We’re also bill paying automatically, too, and auto saving — sucking money in from a regular account into investment accounts. It’s just small amounts but I figure that way it’s doing the compound investment thing.
Bethany — I love the sound of that… do you budget your everyday spending and write it all down? Or do you just do the auto pilot and auto save thing, and then try to be sensible with your spending?
We do the auto pilot and auto save thing and try to be sensible, and discuss large purchases. However, I still haven’t put my own credit card info on “share” on our money site because I wondered how I’d ever buy a present for my husband without him knowing what it was, lol.