How do you budget?

[snyder66]

It seems like YNAB is pretty popular around here.  Mint isn't exactly working for us.  I just worry that we will not enter every transaction.  Any thoughts?

[Thegoblinchief]

I write purchases in each category (mine are groceries/necessities, vehicle, discretionary, medical, and personal $) on a blank sheet of paper pinned to fridge. Low tech but I find it easier to remember than sitting down and entering into the computer.

That side of the fridge is the very first thing I see when I come in the door. Really good reminder of where I'm at in each category.

At the end of the month, I have a spreadsheet where I enter the monthly totals to compute an average.

[schimt]

Why specifically is mint not working for you, then maybe someone can suggest an alternative that makes up for the insufficiency you are having with your budgeting process

[dcheesi]

I guess it depends on what you mean by "budget". Do you need something to help you enforce a budget, or just a way to analyze spending? For the latter, I just download my account activity into a spreadsheet.

[arebelspy]

Mint isn't exactly working for us.  I just worry that we will not enter every transaction.

I'm confused on this.  Why is Mint not working?  The beauty of Mint is that you don't have to enter any transactions, it's all done for you.  (You may just have to go on and "clean them up" a bit every once in awhile.)

I know I wouldn't use any system that required me to enter transactions - Mint doing it passively is a godsend.

People do love YNAB, and they have a 30 day trial, so why not give it a shot?

[FIRE2034]

I just use an excel spreadsheet.  Sometimes having to enter in all the transactions is a pain, but I like the amount of control it gives me. 

[snyder66]

Why specifically is mint not working for you, then maybe someone can suggest an alternative that makes up for the insufficiency you are having with your budgeting process

I guess I'm looking for more simplicity.  Maybe, I'm not using it correctly.  But, There are too many categories and pie charts...I just want to see my spending vs. income in a simpler format, so I know where we need to cut back. 

[matchewed]

Why specifically is mint not working for you, then maybe someone can suggest an alternative that makes up for the insufficiency you are having with your budgeting process

I guess I'm looking for more simplicity.  Maybe, I'm not using it correctly.  But, There are too many categories and pie charts...I just want to see my spending vs. income in a simpler format, so I know where we need to cut back.

Hmm seems fairly straightforward to me. On the overview page there is a net income graph in the bottom left. Looks like the picture below. Then in the Budget tab there is a breakdown along the left as well. And in the trends you can literally select your net income over time.

[arebelspy]

Why specifically is mint not working for you, then maybe someone can suggest an alternative that makes up for the insufficiency you are having with your budgeting process

I guess I'm looking for more simplicity.  Maybe, I'm not using it correctly.  But, There are too many categories and pie charts...I just want to see my spending vs. income in a simpler format, so I know where we need to cut back.

I almost never see pie charts on Mint, and you choose what categories to use.

For what you want to see, just go to Trends and click spending (or income, or net income) over time and set your time frame (a month, a year, whatever).

[snyder66]

Maybe I just need to spend more time with it.  Probably just me...

[Emilyngh]

I use mint to track spending and show me how much of my allotted budget in various categories I've used as the month progresses.   

[mh1361]

And you can customize the budget so you won't get messages that don't apply to you, like you've spent $500 on gas this month, normally you spend $100, what's going on? I think there's a tutorial on Mint you can try going through. Or if there's something specific you want it to do, you can tell us and I'm sure we could (try to) help you.

[schimt]

Kraig Mathis from youngcheapliving.com which is now createmyindependance.com, started a site with some how to video's for mint tracking and budgeting. There are many other videos on youtube too, review them and see if you are missing any steps for simplicty. But i don't think it get much simpler then mint, esspecially from a maintenance of transactions stand point.

http://www.howtousemint.com/

[BlueHouse]

Mint isn't exactly working for us. 

I totally get this.  I've used Quicken for years and before that I used Microsoft Money and I just moved over to Quicken Essentials for Mac (very limited version, which I think is meant to be more like Mint).  In any case, every transaction has been downloaded and categorized for me for probably 20-25 years and I spent quite a bit of time each year cleaning up categories and tying out to statements.  I could tell you to the penny how much I spent on "e-books" vs. "hardcover books", but I couldn't see the forest for the trees (I had no idea how much I was spending overall and frankly, I still don't know what is "normal" for me).  I'm finally learning that I need less detail, not more and I need to focus on the big picture.  That means deleting expense categories and grouping into more manageable buckets. 

[lizzzi]

I keep track in a lined college notebook which is at one end of the kitchen table next to my laptop--so I'm right there a lot. I use pen, paper, and calculator.  Old-fashioned, but it keeps me grounded better…makes it all seem more real and relevant. I'm perfectly capable of doing Excel/YNAB/Mint, whatever. But that notebook is looking at me every time I walk across the kitchen….saying, "Badassity, badassity--MMM,MMM,MMM,MMM."  No way to X out of it. lol

[AJ]

People do love YNAB, and they have a 30 day trial, so why not give it a shot?

+1

Mint didn't work well for us either, but we love YNAB. If you think you might like it, it's worth a shot to try the free trial.

[gecko10x]

...I just want to see my spending vs. income in a simpler format, so I know where we need to cut back.

Your spending vs. income will not tell you where you need to cut back; you will have to decide what is an appropriate amount to spend in any given category, and then have some method to hold yourself to that decision (at least to a degree), if it doesn't match up with your typical spending patterns.

[twbird18]

We make a budget in excel - most of it doesn't require much tracking, the bills are always the same. Our 3 big variables each month are food out, groceries, & misc spending (hobbies, movies, books, ect). We actually write those on a whiteboard in the kitchen and subtract every time we spend something. It's big and public & helps ensure we don't miss any cash expenditures in those categories & we feel good about having money left on the board at the end of the month. It's become a game to have more left every month.

[payitoff]

i use 3 tools and its been working well for me:

Mvelopes - i love their budget feature, it helps me budget for the whole year, best part is they have a funding feature where you can assign expenses for every income. i use this to predict my expenses a month/months out -- this is kind of my spreadsheet.

YNAB - i use this for the current month budgeting, make adjustments, rolling in with the punches etc.

Mint - tracking purposes, this is for after the fact, and i get a reality check here and re adjust for next month.

[lisahi]

Another person here who loves YNAB. I actually like the fact that I have to enter in every transaction rather than importing them in automatically. Makes me feel more accountable for what I spend. And YNAB makes me assign every single dollar a task, so I go by assigned budget areas rather than what the balance of my accounts happen to be at a particular time. If I overspend in one category, then YNAB forces me to adjust for it by taking money from another category (or spending less in the overspent category the next month). When you're having to take money away from your car repair budget, or your emergency fund, you work harder to try and stay within your budget in each category.

I also use Mint, but it never clicked for me when I tried it as a budgeting app. I use it mainly to keep track of what I already spent so that I can check that against what I've entered in YNAB. Mint also makes it easy to see when charges clear.

[rescuedog]

I use an Excel spreadsheet that has been 15 years in the making.  It has the same idea, I just add a lot more tabs like mortgage forecasting and retirement forecasting and now yearly spending averages.  I use it to forecast savings and spending, to budget for big ticket items, etc.  I use Mint just to record all of our transactions since husband has his own credit card, I can just see all our transactions in one place (the checking pays for both our credit cards).

[YK-Phil]

Mint only works, perfectly and automatically, if all your income and expenditures are done through banking institutions. In my case, all my sources of income come from automatic deposits to a bank account, and all my expenses regardless of the amount, are done through pre-authorized debits, credit card payments, or cheques. Rarely do I have to do manual adjustments to where the expense should be allocated, but it happens once in a while. All my investments, including RRSPs and mutual funds, are also tracked on Mint. Mint provides me with a quick and precise snapshot of my financial situation.

Edit: as Zikoris said below, I also do not use Mint to budget. My budgeting principles are essentially like his. No to a bunch of useless expenses (useless to me, maybe not to others: cable TV, toys of all sorts, etc.), and yes to things that I consider either needs, or lifestyle enhancers (travel, art shows, quality time with wife and friends, good quality clothing, etc.).

[Zikoris]

I use Mint, which is great for my monthly and annual reports, and comparisons between years.

But I don't use it to "budget" really - my "budgeting" system is: Don't spend money unless it's something really important or valuable to me. That means no restaurants unless it's an anniversary or something similar, no impulse buys, no shopping unless it's something I planned out beforehand, no paying higher rent than I need to, no cable, and certainly no car. On the "Yes" side - whatever groceries/ingredients I want, tickets to any kind of symphonies or shows I want to see, whatever hiking gear I want, etc. Caveat: this system only works if you don't have expensive tastes.

[Squirrel away]

I just use a Word document for our budget. After payday money is allocated to each part of the budget and I know we only have a certain amount left for all groceries and spending money and when it's gone, it's gone.:)

[schimt]

I use Mint, which is great for my monthly and annual reports, and comparisons between years.

But I don't use it to "budget" really - my "budgeting" system is: Don't spend money unless it's something really important or valuable to me. That means no restaurants unless it's an anniversary or something similar, no impulse buys, no shopping unless it's something I planned out beforehand, no paying higher rent than I need to, no cable, and certainly no car. On the "Yes" side - whatever groceries/ingredients I want, tickets to any kind of symphonies or shows I want to see, whatever hiking gear I want, etc. Caveat: this system only works if you don't have expensive tastes.

I have to second this. Its nice to lay out a budget for the year, based on past spending and expected income, to give you a savings goal and plan time to financial independance. But if you are not an over spender, i feel it is a waste of time to budget every category monthly and spend until you run out. It probably gives most people the "OK" in their mind to spend extra because you have budgeted for it but didnt need the entire budget for a given month.

[tmac]

We use Mint (after using Quicken for years and then YNAB for a while).  I budget for three categories of expenses:

1. Food. This is our only area of recurring over-spending. We eat out too much and our grocery spending gets out of whack if we don't keep an eye on it.

2. Piece-of-mind budgets for recurring bills, sinking funds, and savings. These helps me maintain a realistic view of how much money has already been committed each month, how much is earmarked for future expenses, and how much we can really tuck away into savings. Before I did this, I was always over-committing the funds, or tossing a bunch into savings, then having to pull it back out again.

3. Fun money. DH and I tend to have a "tragedy of the commons" situation when we don't have hard limits on personal spending. We both will spend more of our shared money than we would of our own personal money. [For example, we've discovered to our chagrin that if we go to out to lunch, we'll buy the $12 lunch with family money, but the $3.50 special with our own money.] So each month we get a small amount of cash that we don't have to account for, and we go dutch if we're together. I include it as a budget item so that if one of us slips up and uses the debit card by accident, it'll track it and we can adjust the next month.

[Zikoris]

Come to think of it, be actually do set an annual budget - at the end of the year we do a financial report, and base our new budget on that with adjustments as needed - for example, we cut our landline 3/4 of the way through 2013, so our 2014 budget doesn't have that. We don't pay much attention to it day to day though.

We do have a monthly "budget" of $1500 for total spending that we don't like to go over (not categorized at all, includes all spending combined), but sometimes we do if someone needs a new computer or something.

[awakenedsoul]

I track my spending each month by hand. I pay most of my bills by check. If I pay cash for something, I write it in my checkbook register. Debits for gas, etc. are also in the checkbook register. At the end of the month, I tally up what I've spent. Something about doing it by hand helps me to memorize my expenses. The months where I pay for property taxes, home insurance, or big bills have larger totals. I try not to spend more than $1,000. a month. I don't achieve that, but it's just a mindset that keeps me from overspending.
My brother puts everything he buys on American Express and uses that at the end of the year to see what he's spent. I approach it more like a business. I look at it as a monthly profit and loss sheet. It helps me to know the truth. Suze Orman says that most people underestimate what they spend by $500.00 a month, regardless of their income. I always found that interesting.   

[snyder66]

Thanks for all of the great advice.  April 1, We will be starting to write every expense in a centrally located notebook.  Really like that idea!

[Jules13]

Okay, I haven't actually read any of this thread, but wanted to say that I've used Quicken, Mint, my own spreadsheet and Yodlee.

I just started using YNAB and I LOVE LOVE LOVE it.  Oh my.  I love it so much I actually told a complete stranger about it the other day.  I've told friends and family members.  Love it. 

All the others only "track" money after I've spent it and I never really could figure out a good way to have an actual "budget" with it and both plan expenses and savings.  YNAB does all of that.  It's brilliant. 

I am still on the free trial, but plan to buy it.  I watched 3 of the online classes to help learn it and was hooked from day 1. 

Do yourself a favor and try it. 

[cdub]

I just started using YNAB and I LOVE LOVE LOVE it.  Oh my.  I love it so much I actually told a complete stranger about it the other day.  I've told friends and family members.  Love it. 

+100000 I know what you mean. I'm in love too. It literally - LITERALLY - changed my life.

[Will]

Its nice to lay out a budget for the year, based on past spending and expected income, to give you a savings goal and plan time to financial independance. But if you are not an over spender, i feel it is a waste of time to budget every category monthly and spend until you run out. It probably gives most people the "OK" in their mind to spend extra because you have budgeted for it but didnt need the entire budget for a given month.

With YNAB, I do not budget for a year.  I budget each month based on the income from the previous month.  Nor do I "spend until I run out."  There is a HUGE difference between budgeting to 0 and spending to 0. 

[kaetana]

Its nice to lay out a budget for the year, based on past spending and expected income, to give you a savings goal and plan time to financial independance. But if you are not an over spender, i feel it is a waste of time to budget every category monthly and spend until you run out. It probably gives most people the "OK" in their mind to spend extra because you have budgeted for it but didnt need the entire budget for a given month.

With YNAB, I do not budget for a year.  I budget each month based on the income from the previous month.  Nor do I "spend until I run out."  There is a HUGE difference between budgeting to 0 and spending to 0.

I agree with Will-- for me, budgeting (I use YNAB too) is not so much about spending as it is about saving. Budgeting gives me 100% visibility on what I have to work with and what I don't have to work with. Overspending is relative -- I might think that $10 a month for discretionary money is reasonable, but once my expenses (current and future) are laid out, I may find that the contrary is true, and that I simply have to tighten the belt further. Before YNAB, I used to have separate savings accounts to put money aside for regular but non-monthly expenses, like my car registration, insurances, and utilities. YNAB lets me use just one account by giving me categories for everything I need to save for. Maybe some people have very few expenses to keep track of and don't need to budget, but I can't remember everything! So I outsource to YNAB to give myself the peace that comes with knowing everything's covered.

Oh, and I certainly don't "spend till I run out"!! That's the opposite of what YNAB is about.

[Grateful Stache]

I use the envelope system, but in a limited capacity.

I go to the bank at the beginning of the month and take out a certain amount for the more 'flexible' expenses, such as groceries, eating out, and other spending money. I keep a razor-thin margin in my bank account to cover the mandatory expenses such as car insurance, student loan payment, and cell phone.

Works great for me, and it's extremely simple. When the envelope runs out, it's time to make cheap meals and eat leftovers (which I mostly do anyways).

Best of luck. 

[NeverWasACornflakeGirl]

We make a budget in excel - most of it doesn't require much tracking, the bills are always the same. Our 3 big variables each month are food out, groceries, & misc spending (hobbies, movies, books, ect). We actually write those on a whiteboard in the kitchen and subtract every time we spend something. It's big and public & helps ensure we don't miss any cash expenditures in those categories & we feel good about having money left on the board at the end of the month. It's become a game to have more left every month.

Cool idea!  Love the visibility and accountability!!  I've used Quicken for 8 years and love it, but I may add this as well for the categories you mention.  Thanks!  :-)

[happyfeet]

Excel spread sheet.  We keep receipts in a small bag and I tally them up and pull DH auto gas off his credit card.  We tally  up receipts month end as a team for accountability to each other. We just started budgeting a year ago(face punch) to see where the "money is going" and so now after a year we can readjust.  Many categories are the same each month. A budget has really helped identify leaks in money spending. Have started saving a lot of money of food.  We were over $800 for two people(big face punch). Have halved that as of this month and still working at it. Increased saving from 16% to 40%.

I had no idea how much we spend on our two cats and dog until we started budgeting.  Love our animals but they are expensive!

We sure have a way to go but this website/forums are a help.

To the youngsters that find this site in their 20's and 30's - you are well on your way to FI and understanding what it takes. 

[Tennis Maniac]

Thanks for all of the great advice.  April 1, We will be starting to write every expense in a centrally located notebook.  Really like that idea!

You should consider reading "Your Money or Your Life". It basically describes a pen and paper methodology for keeping track of expenses and cross checking against account balances at the end of each month.  Also, it shows one way to use the information to relate your spending to your fulfillment in life. MMM has mentioned the book before. I use the YMOYL concepts via a spreadsheet, but you could do pen and paper like the book suggests.

Keeping track of all expenses was very eye opening for my wife and I;  hope you are able get as much benefit as we did!!   Good luck.

[Ian]

Because I make fewer purchases than some, I've found entering my expenses in Excel to be fairly easy. When I say "budget" I mean that I record my expenses, then look at the totals periodically to see if anything looks out of line or to judge between options that may not look intuitively different at a glance.