Poll

Do you actively budget and is it worth it?

No and I donít need to.
49 (18.5%)
No, but I really should.
15 (5.7%)
Yes and itís critical to my financial well-being
56 (21.1%)
Yes but I would probably do just fine without it
44 (16.6%)
I only track my spending but I donít budget.
101 (38.1%)

Total Members Voted: 264

Author Topic: Do you actively budget and is it worth it?  (Read 5454 times)

Schaefer Light

  • Handlebar Stache
  • *****
  • Posts: 1175
Re: Do you actively budget and is it worth it?
« Reply #50 on: August 21, 2018, 09:06:38 AM »
I do budget, but what helps me is that I like to see how little I can spend each month.  It's almost like a game.  Can I make August lower than July?  I track everything in Excel, and I like seeing really low numbers at the end of each month's worksheet.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Do you actively budget and is it worth it?
« Reply #51 on: August 21, 2018, 09:53:39 AM »
Iím curious how many actively budget their money.

I don't track my spending. I track my savings. If I am on track with my savings then I know I am on track with my overall spending. For the most part I don't care what I spend my money on as long as there are no glaring problems with my life and the overall spending is on target.

i guess thats the flip side i just like to know where its going some years its more on travel some year's like this year its a lot on healthcare.

WSUCoug1994

  • Bristles
  • ***
  • Posts: 306
  • Location: Bay Area, California
Re: Do you actively budget and is it worth it?
« Reply #52 on: August 21, 2018, 11:24:08 AM »
For me this whole FIRE thing is iterative.  I am naturally frugal as is my wife but we do set a 12 month trailing average from a budgeting standpoint.  It is more like tracking - but setting the budget year to year enables me to slowly dial down each one of these categories of spend.  More like death from 1000 cuts - in my experience I get more "support" from the family if I dial these expenses down slowly then all at one time.  The budget allows me to see my progress from month to month or year to year.  I am also surprised from time to time how our food expenses can get out of control as well as some of the kid's activities.  Helps to keep me in check - but it is fair to say that I am obsessed about tracking expenses - likely not healthy.  Everything at the end comes down to my savings rate - which I want to increase every single year.

Mrs. D.

  • 5 O'Clock Shadow
  • *
  • Posts: 57
Re: Do you actively budget and is it worth it?
« Reply #53 on: August 21, 2018, 09:37:16 PM »
Our spending MO is we don't buy things unless we need them, but if we need something, we buy it (trying to find the best deal, of course). The only spending category I actually budget for is groceries, but that's mostly because 1) it's the only category I have almost complete control over since I do 95% of the grocery shopping/meal planning/cooking and 2) it puts a little mental challenge into an otherwise repetitive and tedious task. The last week of the month is fun, trying to stay on budget when there's only a little bit left to spend. But our savings rate is near 30% so we'd be adding to the 'stash even if I paid no attention to how much we spend on groceries.

pbkmaine

  • Walrus Stache
  • *******
  • Posts: 8331
  • Age: 63
  • Location: The Villages, Florida
Re: Do you actively budget and is it worth it?
« Reply #54 on: August 31, 2018, 09:45:12 AM »
Iím curious how many actively budget their money.

I don't track my spending. I track my savings. If I am on track with my savings then I know I am on track with my overall spending. For the most part I don't care what I spend my money on as long as there are no glaring problems with my life and the overall spending is on target.

Same here.

worms

  • Bristles
  • ***
  • Posts: 368
Re: Do you actively budget and is it worth it?
« Reply #55 on: September 01, 2018, 03:45:55 AM »
My knee-jerk reaction was to answer ďYes, donít we allĒ but having read the thread, now iím not sure! 

I take my savings/investments off the top then allocate sums to all my categories of expenditure using a monthly portion of the annualised spend.  The rest, is not budgeted but I am frugal and allocate any month-end residue into the savings/investment pot.  So yes, I budget for expenditure (and analyse the hell out of it to make sure it is minimised) and I budget for savings/investments, but not for the unallocated portion which is about 15% of the total.  I track everything, though.

lilybluerose

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: Do you actively budget and is it worth it?
« Reply #56 on: September 01, 2018, 08:08:23 AM »
I budget using the every dollar app. It helps me a lot. I track ever cent spent throughout the month and keep a budget for things like groceries and "misc"

SansSkill

  • 5 O'Clock Shadow
  • *
  • Posts: 47
Re: Do you actively budget and is it worth it?
« Reply #57 on: September 01, 2018, 08:15:26 AM »
I have a list of all recurring expenses, and a list of known one off expenses that will come up.
I also have a list of all end of month balances of all accounts.

I don't really track explicitly, I calculated what should be my monthly budget, and deposit a slightly conservative guess of the left over at the first of the month.
I then re-adjust when either my checking account grows too much because of the difference between the estimate and reality or my estimate was wildly off in either direction, depending on which direction I simply adjust the estimate up or go over expense off the last couple of months to see what changed, a series of one offs that are actually recurring, lifestyle inflation, or actual one offs.

MrThatsDifferent

  • Handlebar Stache
  • *****
  • Posts: 1527
Re: Do you actively budget and is it worth it?
« Reply #58 on: September 01, 2018, 08:26:30 AM »
However I think its very important to track pre-FIRE.

Genuine question: why?
If someone knows what they are spending and saving and it works with their goals, is tracking really necessary?

I can think of at least two reasons:

#1Ė you want to track to raise your awareness about your spending and keep it front and center of what youíre doing so you can achieve what you want. Not everyone is great with money or numbers and tracking might help them not get lazy.

#2Ėyouíre interested in better understanding your spending habits and looking to see where you can optimize and increase savings to speed up your FI goals

CindyBS

  • Bristles
  • ***
  • Posts: 451
Re: Do you actively budget and is it worth it?
« Reply #59 on: September 01, 2018, 09:52:38 AM »
No budget/no tracking.

We did track every penny for July and August and just this morning commented to DH how happy I am to be done as of today.  We wanted a very specific "snapshot" of spending for some future planning.

We are comfortable with how much we save and how much we spend. 

Could we wring more out and have more money?  Sure.  But with an already high savings rate and current unpredictable and difficult life situation right now, I just don't think it is worth the bother. 

Apple_Tango

  • Bristles
  • ***
  • Posts: 390
Re: Do you actively budget and is it worth it?
« Reply #60 on: September 01, 2018, 05:30:40 PM »
I budget everything! I use the Dave Ramsey Every Dollar app and love it. I used to just track my expenses and think ďIíve got money left over, all bills are paid, great!Ē But ever since I started budgeting I have seen the light because it allows me to prioritize in advance what I want to spend money on and what I donít. It makes me feel richer. If I want a pair of shoes that cost $50 the old me would have said ďIíve got enough money, Iíll get themĒ but then I would feel guilty that I spent money. The budgeting me says ďIíll put away $10 per week and Iíll buy the shoes next monthĒ it makes me feel less guilty to save for things purposefully in advance.

I love budgeting!

englishteacheralex

  • Handlebar Stache
  • *****
  • Posts: 1866
  • Age: 39
  • Location: Honolulu, HI
Re: Do you actively budget and is it worth it?
« Reply #61 on: September 01, 2018, 05:41:13 PM »
Sure do! I started budgeting in two week increments about ten years ago. This was what enabled me to get ahead of my bills and know exactly how far I could cut my spending to the bone in order to save and give the max I could. Back then as now I start with a target savings number and a target giving number for the month and then work through the different categories with those goals in mind--how can I cut spending in order to max the savings and giving?

I got married about five years after I started budgeting and taught my husband how I did it while we were dating. He thought it was really smart and now jumps on the budget as much as I do to see how we can tweak things. We have plenty of money and don't worry about it at all, but at this point, without a budget I feel kind of rudderless and unsure. Our categories are cranked so far down to the bare minimum that we do overspend sometimes, knowing that any overage is going to cut into our savings. That knowledge makes us extremely reluctant to overspend!

We also track our spending very meticulously, which is why our budget is extremely accurate. We know what's realistic for us in any given category. 


spicykissa

  • Stubble
  • **
  • Posts: 158
Re: Do you actively budget and is it worth it?
« Reply #62 on: September 02, 2018, 01:22:46 AM »
I track obsessively, on a spreadsheet I made with columns for projected and actual expenses. The projections at this point have a firm basis in reality--I used to put in what I thought was a "reasonable" amount, and get mad (or happy) when the actual numbers were higher (or lower). Year over year though, our annual spending has been perfectly fine, so now I don't care so much.

Dr.Jeckyl

  • Stubble
  • **
  • Posts: 143
Re: Do you actively budget and is it worth it?
« Reply #63 on: September 03, 2018, 10:31:33 AM »
Yes, and mostly. I budget/track with Mint. I've gotten really good recently setting budgets in Mint and even manipulating them throughout the month when needed. It helps that I love numbers and analyzing data. The reason I do it to help my wife and I understand where the money goes. I'm not sure how well it works though. My DW has trouble with the concept of spending only to the budget. For example, if she overspends on groceries she doesn't understand that we may need to take that money out of the new tires fund.

We are trying out something new this month. The account is only to be used for categories that we agree on such as groceries, gas, medical. Anything outside of those categories we either need to discuss before purchase or it can come out of cash funds (discretionary). I'm hoping the cash helps us realize that we only have a finite amount of money to spend and if we spend it all in the first week we won't have any more.

Tracking helps us understand where we can and cannot cut expenses. For example, if we spend $300 on fuel every month and we group errands and only drive to work, soccer practice, etc.. then we cannot go lower than $300. And if fuel costs spike 10% we will need to add 10% to that budget. Same goes for food. We've been trying to get our spending down in this category but we can't do that by under budgeting. Instead, we need to actively create meal plans and stick to the grocery lists. So gas and food I try to over budget for. Any extra at the end of the month we then place that in one of our goals categories (vacation, pool (I know face punch me), newsed car, etc...)

What taught me the most about budgets is the book All Your Worth. I really like the 50/20/30 rule that they lay out. It's a simple set it and forget it budget. However, as a budding mustachian I do more than the 20% for savings. But the simple idea that I go by is pay your bills, then pay your future you (savings), then have fun with the rest. My bills are autopay, my 401k and IRA are auto funded.

Dr.Jeckyl

  • Stubble
  • **
  • Posts: 143
Re: Do you actively budget and is it worth it?
« Reply #64 on: September 03, 2018, 10:54:43 AM »
I budget everything! I use the Dave Ramsey Every Dollar app and love it. I used to just track my expenses and think ďIíve got money left over, all bills are paid, great!Ē But ever since I started budgeting I have seen the light because it allows me to prioritize in advance what I want to spend money on and what I donít. It makes me feel richer. If I want a pair of shoes that cost $50 the old me would have said ďIíve got enough money, Iíll get themĒ but then I would feel guilty that I spent money. The budgeting me says ďIíll put away $10 per week and Iíll buy the shoes next monthĒ it makes me feel less guilty to save for things purposefully in advance.

I love budgeting!

I totally agree. One of the reasons that we started a discretionary spending cash budget this month is so I won't feel guilty when I spend money. What will likely happen is that I will save the discretionary budget money and never spend it cause I'll feel guilty anyways :).

Dicey

  • Senior Mustachian
  • ********
  • Posts: 10478
  • Age: 61
  • Location: NorCal
Re: Do you actively budget and is it worth it?
« Reply #65 on: September 03, 2018, 11:00:01 AM »
I did pre-FIRE, but I don't any more. Everything is pretty much dialed in. Last week, I grocery shopped at my usual cheap places and realized I hadn't looked at my totals anywhere. When I got home, I added them up. Under $42.00. Not bad for a family of four adults. I will add that I've been frugal for years, so I have a good sense of where and how the money goes, but it did not happen without dilligence.

sparkytheop

  • Pencil Stache
  • ****
  • Posts: 819
Re: Do you actively budget and is it worth it?
« Reply #66 on: September 03, 2018, 01:45:22 PM »
Last month, I looked at how much I had saved for the new house build.  I decided to make a goal to try to save another $9700 before the end of the year, so I could finish with a nice round number. 

Having the budget as a visual helps me reduce spending even more, so that I can move some of the extra from those categories to the house.  These are more extraneous lines (quilting, fun money, gas, etc) rather than lines that need to increase each month (house maintenance, car maintenance, etc).

It's a lofty goal, and I'll need to get scheduled for 10 or 11 more overtime days this year to do it, but I do enjoy the budgeting so I can see how I'm doing with my savings goals.

AFrugalGuy

  • 5 O'Clock Shadow
  • *
  • Posts: 17
  • Age: 34
  • Location: Toronto, Canada
Re: Do you actively budget and is it worth it?
« Reply #67 on: September 03, 2018, 03:15:17 PM »
We budget in great detail, including for savings. Any monthly surplus goes directly to savings and not to spending - as someone said in this thread earlier, it becomes a game to see how much surplus we can generate each month to exceed our savings goals.

In general, it really helps to know where every single penny goes - and to track trends - so we can make conscious decisions about everything.

Kyle Schuant

  • Pencil Stache
  • ****
  • Posts: 755
  • Location: Melbourne, Australia
Re: Do you actively budget and is it worth it?
« Reply #68 on: September 03, 2018, 07:05:24 PM »

COEE

  • Pencil Stache
  • ****
  • Posts: 612
Re: Do you actively budget and is it worth it?
« Reply #69 on: September 03, 2018, 07:26:06 PM »
I've been budgeting for 6.5 years.  The first couple years helped us so much while we were getting out of debt.  Once we got out of debt and started raising our savings rate, the need for the budget has slowly dwindled.

It also helped me a lot when I was laid off to know I had a big chunk of change sitting there above and beyond what we qualified for for unemployment.  It quite literally got up a few nights in the middle of the night to look at the budget to know that we were really okay for the foreseeable future.  This is a comfort I had that I wouldn't have had if we did not use a budget.

Today I keep the budget going but we blow much of it every month.  It's just not all that useful other than knowing where our money is going and how much money everyone in the family has for their blow fund.  Which is still important, but not terribly helpful.  I am now much more interested in watching the networth and our investments grow.  I wish I had a good piece of software to do this, and I really feel that YNAB was well primed to enter this realm, but Jesse didn't for some reason.  It's just not that great at handling investments.  I'm still looking for software that does this well.  I wasn't impressed with Personal Capital or their spam mails and calls.  Or having everything in one place on a website with 24-7 access to hackers.

I've been a loyal YNAB user since YNAB3 and we are still using YNAB4.


GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 13759
  • Age: 38
  • Location: Toronto, Ontario, Canada
Re: Do you actively budget and is it worth it?
« Reply #70 on: September 04, 2018, 02:03:49 PM »
Even countries need to track their spending, and they have billions.

https://www.theguardian.com/world/2018/sep/04/corruption-incompetence-and-a-musical-naurus-riches-to-rags-tale

That's kinda to be expected, right?  I mean, I can guarantee that 100% of the people with access to funds in my bank account are good with money and won't spend unnecessarily.  Few governments can offer the same assurance.