HOW DO YOU BUDGET YOUR MONEY

Swayze

man just about to go nuts with how we spend our money at the household. the crazy thing is we make enough for all of our bills but always seem to be damn near be broke. how do you cats do it.. i have a great way that will help us save. but i think it's kida extreme. BILLS,RECORDS,CHILDREN,FOOD,GAS,ETC.....

sabadabada

my wife saves her entire paycheck, we live, pay my tuition and all the bills with mine.

batmon

onetet

I've heard that a good rule of thumb is to try to make sure that your rent/mortgage is 25% or less of your income. I'm lucky in that I'm well below that, but I know most people aren't and it's getting harder and harder to pull off that ratio.

I've always been able to save money, and my # 1 piece of advice to people who haven't been able to is TRY TO LIVE WITHOUT A CAR (or at least reduce your car usage). There's nothing in my life, other than my health, that could possibly result in me having an unexpected $1000+ expense on a day's notice -- and the amount of money I spend on public transport is a ridiculously small fraction of the amount most people spend on gas, insurance, car payments, etc.

I know this isn't practical for lots of people, but I'll throw it out there as a choice that drastically improved my quality of living. I don't earn very much, and between the cheap rent and my pedestrian status I eat out when I want, buy records when I want, etc etc.

DJCire

Wife pays bills, I pay rent and we both save... We split up groceries (sometimes she pays, sometimes I pay)... Bills obviously get paid first, then what ever is left over put in savings and spend a little! Gigs help with savings and spending too, so thank god for that. Its working so far...

SouthCrackalack

Dude, if you figure this shit out..be sure to let me know! I suck at budgeting my $$$ and constantly am telling myself "ok, time to get my shit together..time to buckle down"..but it doesnt seem to ever happen.

sabadabada

my wife saves her entire paycheck

how naive

whitebelt budgets like waterworld

well i know you arent paying much for bandwidth on that website of yours.

or spend money on records, cause apparently you have none.

DJCire

First thing I do is put whatever amount I can into savings (sometimes the shit is $100, sometimes its $1000) - the key is DON'T touch it!

Spending, bills and the like come out of checking...

I'll be honest though, the gigs really do help. I have a decent job that covers the rent, bills and basics, but the gigs are what help us be comfortable...

G_Balliando

I'm single and live alone, and I only get paid once a month. Shit was difficult to adjust to the first year or so. Been doing it this way for 6 years now though and I love it. I get my check, pay my bills, skim all the extra money I can off the rest and drop it in savings, live for the month off the rest.

Otis_Funkmeyer

I use excel to make a spreadsheet showing my monthly income, expenses, and current and projected balances. It's a good way of knowing how much extra cash you'll have after expenses. It will take a couple of months to get your monthly food and entertainment estimates right. I also use my debit card as much as I can so I can check my current statement and balance online and see where the money's going, then adjust my spreadsheet accordingly.

Aside from that, a good idea is to open one of those online savings accounts like Emigrant or ING that that have 5%+ interest rates and set up an automatic monthly withdrawal from your checking acct.

Jonny_Paycheck

'Face said it man! "You make 12 dollars you put 7 away, live of the 5, and never ever fuck with your safe"

I try to live by that but I'm a lot better at doing so with my business than with my personal.

rkwpark

i put a dollar or 2 away every day so at the end of the year i.e. christmas time, i have funds to buy gifts, go out, etc without going under.

Zeke

I've been running a small, contract business out of my apartment for the past year and it became obvious about a month after I started that it was necessary for me to budget for both business (including taxes and employee paychecks) and personal expenses. I was really, really bad at budgeting money and the stress of "losing everything" was starting to affect me. As ridiculous as it sounds, creating an actual paper or digital budget really, really helps. I was never a fan of writing that kind of stuff down because it seemed so asinine, but being able to see each expense (or a rough estimate thereof) has helped me a lot. I'm single and childless, so it's not too hard to create my personal budget, but it includes every month-to-month expense and an alloted for the unexpected that goes into a slush fund at the end of the month. I track how much I spend on each line and at the end of the month look to see where I have gone over budget and try to find (and correct) the reason. I (or rather the nerd in me) even created a month to month chart to track changes in energy (electric, gas, car fuel) expenses so that I can properly budget for next year. Even writing it makes me feel really robotic, but I haven't had a "close call" since I started and sleep easier at night because of it.

Kaushik

First thing is to reduce your debt, especially credit cards. Student loans -- consolidate whatever you can. Living without credit card debt has been a huge boon to my (and my wife's) budget.

Next take a hard look at your monthly expenses. Cut back on the stuff you don't need and find ways to save money. For instance, eliminate the "latte factor" as it's called -- instead of the $5 Starbucks every day (adds up to $75/month on average) -- make coffee at home or just drink the office stuff.

Then as others have said, figure out how much you want to save based on your goals. My approach: a "rainy day" account (high interest bearing online savings accounts like HSBC and ING orange). Put away as much as you can afford and don't touch it. Save up to 6 months of monthly expenses in there so you can tap into it when needed. (This might be more for the married folks here.)

Set up a retirement account -- IRA or 401k through employer. If you're not getting your employer's match you're leaving money on the table. Stay away from mutual funds with high fees -- they reduce your gains by 2-3%, and that's on top 0f whatever value erodes due to inflation (3% annually). I mostly have my money in Vanguard index funds.

I highly recommend John Bogle's books especially The Little Book of Common Sense Investing -- pearls of wisdom from the guy who founded Vanguard.

http://www.amazon.com/Little-Book-Common...8416084-2519820

sabadabada

i have a question. My employer now allows me to save in either a ROTH or regular pre-tax 401K. I'm 40. Is it better to take advantage of the ROTH (growth and withdrawl tax free) over the pre-tax now benefit of the traditional IRA? I already have a ROTH IRA that I presume I can still contribute to (b/t/w do you know the max)but I probably will be making too much money to be elegible for a ROTH starting 2009. Is it worth it to open a ROTH if I can only contribute for the next two years?

Kaushik

I have a regular 401k but I've been looking at the Roth IRA or Roth 401k option. Regardless of which Roth option you go for, I am guessing that the Roth is an option to consider only if you're already maxing your 401k contribution -- at least putting in enough to get your employer match, if they offer one.

If you still can afford to put money into a Roth account after putting in the $15,500 annual limit in the 401k, I'd say go for it. The other argument in support of the Roth is the tax benefit (duh) -- depends on whether you believe you'll be in a higher tax bracket at retirement age. If you think the tax rates are going to be higher in the future (most likely they will) then the Roth is a good "tax avoidance" strategy to take advantage of the tax benefits.

DB_Cooper

Usually, the Grants go in the safe, I spend the Jacksons, and the Washingtons go to wifey. Quite simple, really.


For real, though, I work at a non-profit and have a rather exorbitant rent. I pay rent and bills, then spend the rest on living a far from lavish existence. I have no savings.

I guess what I'm saying is, kids???don't be like me. Do not be like me. I mean, if you want to be like me...well, I really don't know what the hell I tell them. I mostly sign autographs and whatnot. I'm a role model.

bassie

I have automatic withdrawl every two weeks for a fixed amount from my main account into a savings one and that is good for vacations, emergencies and dream shoes/$$$raers.
I have a few RRSPs but have to re-organize cause I don't think I'm getting the most out of them.
I am hoping to get my credit card paid off in the next few months and that's at around $2500. After that, I'm not going to carry it around. I stopped using it for over a year so I could chip away at it, but it got back up there after our trip.
After 10 yrs of contract work in film and not knowing what the next year held, I am at a government job that I hope will become permanent and then things can begin to settle.

Man has his own business and that is not even five years old, so similarto Jonny said, his savings and budgeting are focused on his business, as they should be. He can take care of that and I am more than happy to take care of the personal stuff.

My parents have been saying to buy a house for a long time and I have really resisted. It's not a dream of mine to own a home, it's really expensive in Toronto and I have always looked at it like a yoke. I am slowly coming around, only because I am so tired of moving and not feeling like I have any control over my home. Still, I am scared to death of doing it - I hate banks! Also, I can't afford it unless I get some major help and I am not into having things I can't afford on my own, you know?

JimBeam

Is it worth it to open a ROTH if I can only contribute for the next two years?

probably not, the decision depends on the level of certainty that you have that you'll be making more than the max.

DJ_Enki

I've heard that a good rule of thumb is to try to make sure that your rent/mortgage is 25% or less of your income.

Yeah, I've heard that, but I'm not close to attaining it. Presently, my rent is a little under half of my posttax income (I get paid every two week, which usually shakes out to be two paychecks per month; the first paycheck is for me, and all but a couple hundred bucks of the second paycheck goes to paying rent).

But then again, those numbers could be a bit skewed because I do have a 401(k) into which I divert I think 6 percent of my pretax income, and I also put additional tax withholdings on my paychecks so that come tax time, I can be pretty confident that I won't owe money but instead will get a nice refund. So with those two factors removed, my rent could be more like a third or maybe even as low as a quarter of my pretax income.

I don't have a savings account, but I do have a Roth IRA in addition to my 401(k), so I think I'm in good shape as far as planning for the more distant future. For the more immediate future, it would be nice to get a savings account going so I can save toward some bigger purchases, but that might not happen until next year sometime. My goal this year was to finally pay off my credit card, and that definitely isn't happening, which kind of bugs me.

Beek

For many people, budgets don't work. Just like diets. If you're like that, then don't budget! Instead, just track every penny you spend and receive. I use my cell phone to track it... Every time I buy something, I just make a note in the cell phone. If you put everything on your credit card. At the end of the month, add up all your expenses. When you see the totals, you'll realize you're spending way too much on certain things that bring you very little happiness.

If you carry a balance on your credit card, break that habit or you are toast. Any other high interest/non-deductable debt, pay it or you are toast.

When it comes to saving & investing - pay yourself first. Have preauthorized transfers from your bank account so you don't have a chance to spend that money.

Also a BIG co-sign on living without a car. I'll bet you can retire 10 years earlier if you live without a car.

I also highly recommend the book "Your Money Or Your Life" by Joe Dominguez.

Jonny_Paycheck

the Grants go in the safe, I spend the Jacksons, and the Washingtons go to wifey

you know how that go!

(actually, the benjamins go in the safe, the grants go in my pocket, the jacksons go in the bank, and the rest stays in the till for beer/food/change).


I learned all of my budgeting from rappers.

Mr. Casual

my wife saves her entire paycheck

how naive

whitebelt budgets like waterworld

Still funny..

RAJ

I have Quicken on my Mac.

There is so much money coming in and going out its hard to keep everything straight these days.

brokenrecord

It's SO simple:

Stop buying shit.[/b]

If you really think about it, probably 95% of the stuff you (we all) buy is unnecessary.

Allow yourself one splurge (records). And stop buying everything else. Period. If it's not food, you don't need it.

Follow this, and the savings will pile up.

Mr. Casual

^^^^^^^What is with your avitar.. is that a dood?

brokenrecord

Oh yeah, and if you do HAVE to buy it, buy it used - the only way to get records of course. All of our furniture was totally cheap or free and is actually really cool and vintage. Way better quality than the stuff at most furniture stores today.

Today I am wearing a Banana Republic shirt, Buffalo skirt, and suede knee-high high heel boots. All from the thrift shop. Whole outfit < $10.

And it's the right thing morally to do for the environment.

brokenrecord

^^^^^^^What is with your avitar.. is that a dood?

Yeah. Why - did it catch your eye handsome? ; )

Grandfather

http://www.getrichslowly.org/

This website has a lot of information that will help.

Mr. Casual

^^^^^^^What is with your avitar.. is that a dood?

Yeah. Why - did it catch your eye handsome? ; )

It did.. but I guess we can't say shit as DJ Sheep keeps coming with the heaters. My bad Miss Brokenrecord.. do your thang

hugh_lucero

I've heard that a good rule of thumb is to try to make sure that your rent/mortgage is 25% or less of your income. I'm lucky in that I'm well below that, but I know most people aren't and it's getting harder and harder to pull off that ratio.

that percentage is a good rule of thumb for your rent but if you have a mortgage repayments are likely to suck up 40-50% of your income, which is basically what you were paying in rent and what you were previously managing to save (for lots of people those savings go towards a deposit). Thats one reason why housing affordability is an issue just about everywhere these days.


Like lots of others on here, I direct some away to savings, clear the credit card, pay all bills, get a consumable or two and if theres any left come next paycheck I try bank that too. I don't have a car but have been giving it thought afer a buddy offered me his Saab for $1000.

With a fortnightly paycheck / monthly rent you get two 'bonus' pays a year aka 3 paychecks in a month. That shit rocks.