Author Topic: Best way to budget with my lifestyle?  (Read 1493 times)

jacobacro

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Best way to budget with my lifestyle?
« on: September 10, 2019, 06:06:42 PM »
Over the last few years I have been trying to get by s*#t together and one of the last challenges is in keeping a budget.  I have tried a few times and nothing has stuck yet.  Budgeting is a challenge because I sometimes buy 10 small things over the course of the day and I get paid and pay others in a myriad of ways: paypal, venmo, cash, square, check, facebook pay, apple pay, etc.  I tried Mint for a while but I became overwhelmed with the amount of work it was to categorize everything.  Budgeting is easier when you have one source of income and one payment method.  That is not my situation.  So fellow mustachians, what would you do in my situation?  What is the best app?  Best program?  Best method?

Thanks in advance!

-jacobacro

dodojojo

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Re: Best way to budget with my lifestyle?
« Reply #1 on: September 10, 2019, 06:39:50 PM »
I've never budgeted.  I never updated my checkbook either.  I always spent a lot less than I earned. A few years ago I did use an app to track spending but that lasted about a couple of months. This August, I started using an app to track spending.  I'm not tracking income as I simply want to know how much I'm spending each month.  I have a general idea but I want a few months data as I want to know exactly what I'm shooting for in terms of FIRE spend.

The app is Money Manager and I'm keeping it simple and hoping that will mean I will use it for more than a month.  Rule is if I spend, I inpute.  I try to not end a day without inputting everything.  Ability to set recurring costs is very helpful.  I'm not being very particular and do not have dozens of categories.

In August, my spend was 3,154.  I had always thought my "normal" monthly spend was around 2,500.  In August I did buy a laptop and airline tickets that totaled 550.  So, my essential to almost essential monthly spend isn't too far off from my estimate of 2,500.  If I had to hunker down, I could get by on that number.  But with pets, travel, family, etc, I think at least 3K monthly is the real normal spend.

bbqbonelesswing

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Re: Best way to budget with my lifestyle?
« Reply #2 on: September 10, 2019, 07:29:12 PM »
I tried Mint for a while but I became overwhelmed with the amount of work it was to categorize everything.

Yes, it does take work. Maybe a few extra minutes per day if you are tracking your budget manually.

Try a few different things and see what you prefer: Mint, YNAB, google sheets, notepad and pen, etc.

Ultimately, there is no silver bullet here. The most important thing is to pick a method and stick with it. You can't expect any app to do 100% of the work for you. Good luck!

WSUCoug1994

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Re: Best way to budget with my lifestyle?
« Reply #3 on: September 11, 2019, 08:42:17 AM »
No offense but if you can't take like 10-15 minutes a month to categorize your expenses (you really only have to do each vendor once) than you are not really committed to the process.  It is not that hard and we have a pretty complex portfolio of different payment methods.  Step up and do the work - your future self will thank you.

Jenny Wren

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Re: Best way to budget with my lifestyle?
« Reply #4 on: September 11, 2019, 10:20:50 AM »
Both my partner and I are self-employed, with income flows that look similar to those working in the gig economy (freelancers with a variety of clients through various platforms, each paying by different means). The best way I found to budget is how YNAB sets it up -- you live off last month's income this month.

How we do this is that all income every month is funneled into a single no-fee/no-minimum balance savings account at our credit union. On the last day of the month, I budget for the upcoming month (Bills, groceries, fun money, etc). That amount is transferred out of the holding savings account into our checking account. What remains in the holding account is transferred to our regular savings, investment, IRAs, etc. Then the process starts over with funneling all incoming payments into the holding account.

Effectively, this is setting it up so we are paid a variable salary once monthly. If there is money left in the checking account at the end of the month (such as we didn't spend all the grocery money), we don't have a spending free for all. We simply use that amount to start funding the budget for the next month.

AMandM

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Re: Best way to budget with my lifestyle?
« Reply #5 on: September 11, 2019, 12:48:21 PM »
I think you need to define your goal more clearly.  You say you want a budget, but different people mean different things by that word.

Do you mean you want to assign yourself spending limits in various categories each month, and then track expenses to make sure you stick to those limits? Because if that's what you want, then by definition you *have* to categorize your expenses. However, you don't have to distinguish between paypal, venmo, cash, credit card, etc. unless you also want to track the balances in each of your accounts. If you do it that way, you could use a plain spreadsheet or even pencil and paper. For many years, we just hung a clipboard with a pad or ledger paper on the kitchen wall.  Each spending category had a column, and every day we'd write down what we spent that day in the appropriate column. Easy peasy.

However, this is an area where you get more information if you put more work into it. You could minimize your workload by having a very few categories: Housing, food, transportation, clothes, work necessities, entertainment. But then you wouldn't get the detailed information (e.g. how much do we spend on groceries vs. eating out? how much is my car costing in repairs each year?) that might help you with future spending decisions.

Also, there is a bit of a trade-off between ease of making entries and ease of getting info out/analysing it. Our paper-and-pencil method made it super easy to record expenses, but it was a bit of work to do all the addition at the end of the month, transfer totals to a yearly sheet, recalculate monthly averages, etc.  If we'd used a spreadsheet, the barrier to making entries would be higher but it would be easier to feed the data into sum and average functions. With a smartphone app, you can get easy entry combined with easy analysis, but you have to spend the time to learn the app.