Budgeting: do you, and how?

[ceecee]

I don't worry about money per se but I keep an eye on things closely. We are paid every other week but alternate weeks so we have money coming in every week. Both 401ks are maxed, my husband will have a pension and we also invest outside of that, IRA's and several other and the bulk of my paychecks go towards investments and retirement. Household budgeting is done with Quicken.

 

[Amargith]

Oddly, Im better at it than my INTJ (though he has no qualms doing it when it aint his own funds - like the funds for his company). Perhaps this is an Si vs Se thing?
I grew up in a family that wasn't that wealthy and with a mother who was...well, a witch with money. She made every dime count 5 times, somehow

And so, making a budget when I had an allowance was an..almost natural thing. While Im perfectly capable of blowing 5000 dollars in minutes, I'm also capable of not spending *any* money, until I have money available to me again. And I automatically allocate certain amounts to certain areas in my life. It used to be gifts and things I could buy at the mall, nowadays it's food, rent, bills, cats and personal treats. It aint that different, tbh

My INTJ otoh grew up in a family that had plenty and is so used to having money - also coz he's never had an issue making any, that's more my...problem - that he resents having to make a budget as he feels he should be able to buy what he wants, when he wants, with the exception of really big ticket items - like a house. It's like a matter of pride to him, so he doesn't like looking at his account and allocating stuff. I've suggested more than once to give me his accounts and I'll do the rest for him, for this very reason

He is not as bad as he once was on this front though as he knows budgeting is on occasion definitely the smart thing to do.

 

[cascadeco]

I grew up with isxj parents, and my father was always in charge of budget and from a young age i think started instructing me in the concept of money management and savings. I am thankful for that.

So, I am keenly aware of the amount of money I have coming in, and as far as I'm concerned, it's 'simply' not spending more than I have coming in. To do that, it's a matter of keeping track of everything I spend. I have, since being on my own.

And from there, it's a matter of determining and knowing priorities. I don't have a 'budget' per se, but I'll flexibly adjust what I spend, or crunch down on savings, depending. I am known for being very frugal in day to day things, but valuing experiences, big trips and such. So I'm both really stingy and very willing to spend on things that matter to me.

 

[wolfy]

...
My solution?
I give all my money to my wife.
She is a master of budgeting, so who the hell am I to try and do it? It just doesn't make sense.
My entire paycheck goes into her account every 2 weeks, and she sends me periodic emails with $ status info.
Problem solved!

This is what I do too.

 

[garbage]

We precalculated an estimate for our monthly bills that we shove into an account with autopay set up, and we don't worry about budgeting the rest. Most of the rest is in our separate accounts; we don't dictate what the other spends.

Though, I formulated a cool lil' chart that keeps up with our bank account totals over time; if it starts to nosedive, we'd know to not spend as much. I keep track of all of our finances, but I've made it a pretty easy task.

 

[Sunny Ghost]

I suck at it. I just don't do any kind of budgeting at all, and have a really poor grasp on how much money is coming in and going out. I don't usually stress about it though. I just don't really spend very much money, and when I need to spend a big amount or feel like I've been spending more than usual, I go in and check my bank account to make sure everything's ok.

My strategy in a nutshell: live simply and try to think about money as little as possible.

(To the above) My life as a server/bartender. Budgeting was too hard when cash was flowing in on a daily basis.

But nowadays I actually get paychecks. So basically, I just try and pay all my bills, get my groceries and my gas ON payday. And then I just aim to try and not spend any other money for two weeks until my next payday. That's pretty much my idea of budgeting.

 

[five sounds]

My life as a server/bartender.

Nowadays I actually get paychecks. So basically, I just try and pay all my bills, get my groceries and my gas on payday. And just aim to try and not spend any other money for two weeks until my next payday. That's pretty much my idea of budgeting.

ooo that's a good idea! i feel like i could actually do that. thanks, girl.

 

[Redbone]

Since my eight year old still refuses to manage the money in my household, I'm stuck with the task.
How does money feel to you, and what do you do to manage it?

Unbelievable! None of mine are interested in this task either.

I like having money more than I like spending it, so I'm pretty good at managing it. I feel what...helpless? if I'm absolutely broke so no matter how little I have coming in, I try to hold on to some of it. I've always got some kind of money stash to fall back on if things get rough(er). I'm not working now b/c of going to school full-time and probably have anywhere from $300-$700/month to play with. I make it work but I'll be really glad when I finish later this summer, get a job, and throw have my roommate to move out.

I write bills out on my calendar, tag it with an alert 3 days ahead and usually pay it on that day. I put so much aside per week for miscellaneous stuff, and write out a menu complete with a shopping list to control spending at the grocery store. I only have cable/internet, utilities and split that with my roommate.

 

[kyuuei]

I manage it constantly. I keep fairly simple systems in mind because I'm too busy and lazy to do much else.

Tax returns go into my IRA, I put set amounts aside into savings each month, I use envelope systems to save money for events, I cash in my pocket change for presents for others, and I allot set amounts of money for various bills and petty cash.

 

[figsfiggyfigs]

Gonna have to start. I want to be able to purchase a property in a year or two.

 

[Randomnity]

I don't budget, but I did track my expenses in great detail.

Budgeting is not very effective at anything except cost estimation. Most people use it as a way to set hard limits on their spending but this tends to result in sub-optimal utilization of money.

The real goal is to optimize utility. For example, we spent something like 800-1500/month eating out. That's a lot of money, and the question isn't if we should budget a lower amount (because we want to save), but if we'd rather eat out less and take more vacations. Relating costs helps constrain spending better than limiting yourself.

Anyway, I had spreadsheets that tracked all expenses, then balanced it against income and savings. Same concept as any business accounting. It gave me an idea how accurate I was. I also used it to check credit card bills, etc.

It actually helped quite a bit in making decisions later, like should we move to a nicer apartment and lose that bit of money. It's much easier to visualize what you need to sacrifice when you have the data.

Kinda stopped tracking it when we spent all our money to travel around the world. It also changed my view on saving. I'm not a big fan of saving anymore. Seeing so many old people with money, but no energy left to enjoy it, was very sad. Not to mention, they seemed no happier for it. (All this within reason, of course.)

I also tend to be a model builder and more data is always helpful.

This is exactly my strategy. I've been tracking my spending since I've been living on my own (~6-7 years now) so I have a good amount of data built up, although I've lost some of the earlier files. I'm too careless to save receipts so I just buy everything on my credit card and categorize things based on my statements. It's not a perfect system since "cash" and "department store" are ambiguous, but they're both a fairly small amount of the total and I have a pretty good idea of the kinds of things I'm buying with them. (I think this might not work as well in the US since when I visited, it seemed like a lot of places were cash-only. Pretty much everywhere takes cards here.)

I really like making graphs and charts with the data and seeing how it's tracking over time. I've never had to go to the extent of an actual budget - I see it as very similar to dieting, where for me it's much much easier to aim for good habits overall (with the occasional treats) than to restrict myself to a fixed number. Similarly I don't really save for specific things, I just try not to spend money on things unless I really want them, so that when I do, I have the money for them. A house/car will probably need dedicated savings, but that's pretty far in my future.

edit: ha, I actually wrote that before seeing you made the same analogy later on. that's a little scary

 

[ptgatsby]

A house/car will probably need dedicated savings, but that's pretty far in my future.

Although I've bought both before, I'm without both now... and I'm not sure I was better off having saved for either. Unless you live in a few of the more expensive cities in the world, reasonable savings are enough to get by without even losing too many options.

I'd say savings is more about being able to capitalize on opportunity. Renting is currently a better choice in the majority of Canadian cities, but if inflation suddenly increases, it's only the renters that have cash that will benefit (raising rents vs dropping housing prices). And the opposite is probably even more true. Cash gets you out of bad situations without them becoming misery-spirals.

Savings is a great marginal-value problem. I cannot see deferred consumption as a positive value - you are essentially discounting the hours you worked! Why!? Opportunities though, that's different.

edit: ha, I actually wrote that before seeing you made the same analogy later on. that's a little scary

It's pretty common I believe the drivers for both are very much the same.

I don't have good enough data to write a paper or anything but I did notice a connection between spending and eating "rich" in my own data. For us, I noted that if you decrease one (proxy: eating out, proxy: discretionary spending), the other one swings up. Awareness broke this, as I'm sure other things do... like running out of money I wouldn't be surprised to find out that there is yo-yo spending like there is yo-yo dieting.

 

[Randomnity]

I'd say savings is more about being able to capitalize on opportunity. ...Cash gets you out of bad situations without them becoming misery-spirals.

I definitely agree with this. Money is freedom, in a lot of ways - both to pursue opportunities that come up, and to escape traps that spring up unexpectedly.

And yeah, I'd just as soon avoid a car forever, and I'm not planning to start saving for a house until it starts to seem like a realistic possibility in the next few years. I wouldn't take a house even if it was offered to me with no down payment and a reasonable mortgage right now, because I don't know yet where I'd like to be living in five years* or what my income/job stability will be (and then I would still need to look at the real estate vs. renting options there). I don't really care about the emotional value of owning a house (at least so far) so I won't be buying until it makes sense both from a lifestyle perspective (more settled) and financial perspective (sufficiently cheaper than renting to justify the loss of freedom). I see a lot of people assuming that buying is automatically "investing" while renting is always "throwing away money", and forgetting that real estate fees, interest, repairs/upkeep, property tax, etc don't turn into equity either.

*very possibly BC, and if so I might pick your brain a bit in the future!

 

[ptgatsby]

I see a lot of people assuming that buying is automatically "investing" while renting is always "throwing away money", and forgetting that real estate fees, interest, repairs/upkeep, property tax, etc don't turn into equity either.

Honestly, it's a complicated question. However, all models I have created show that it is very unlikely that it would be worth buying (payback exceeding our lifespans).

But, that's given normal assumption. If capital appreciation continues above inflation due to Asia being lifted out of poverty, then buying almost always going to be better. And it's reasonable to assume that (at least) the Vancouver market moves on a relatively small amount of buyers (at the margin, ~1000), you are looking at a long run impact. (Given a normal distribution of wealth in Asia, 3 deviations is equal to the entire population of BC. They have a lot more money than us. And it keeps growing. )

So yah, complicated. Not because of numbers, but because the world is messy. But It's one of my very favorite financial conversations, no joke.

---

A lot of people really enjoy having "their own place" and being able to renovate and personalize. More than the stress of roofs, heating and water tank issues, piping... Me, I'm the other way around. I don't want to be bothered, and I want an ever changing location (close to work or otherwise). I want new and nice. So I rent and move when I want.

Can't say my choice is better than my friends, but it is better for me.

*very possibly BC, and if so I might pick your brain a bit in the future!

Proud 2nd place holder of the most expensive (relative to income) city! But a lovely place.

And certainly. Seems like BC is a hot spot, quite a few people seem intent on moving here!

 

[Typh0n]

Pretty good at it. I like managing money and bank related stuff. Maybe thats where I should work after all, as Jesse James said, banks are where the money is!

 

[gromit]

Try not to spend too much. Store brand on anything where I cannot perceive a difference. Making food instead of purchasing prepared food. Not drinking a lot. Etc. And if I'm buying something big, make sure there is $ in the bank account.

I ended up with a pretty good savings that way. Although now I'm back in grad school, so that sure changes things in terms of income, but still same principles apply.

 

[Typh0n]

Try not to spend too much. Store brand on anything where I cannot perceive a difference. Making food instead of purchasing prepared food. Not drinking a lot. Etc. And if I'm buying something big, make sure there is $ in the bank account.

I ended up with a pretty good savings that way. Although now I'm back in grad school, so that sure changes things in terms of income, but still same principles apply.

I find that spending less on food helps me have quiet a bit more for other things.

 

[gromit]

I find that spending less on food helps me have quiet a bit more for other things.

Yeah it really adds up! $6-12 for a meal eating out vs ~$1-2(?) per meal homemade. I am also incredibly cheap when I eat out, so try not to go above $12 for 'special' meals.

 

[Typh0n]

Yeah it really adds up! $6-12 for a meal eating out vs ~$1-2(?) per meal homemade. I am also incredibly cheap when I eat out, so try not to go above $12 for 'special' meals.

More or less, but sometimes I like to treat myself to something nice food wise, though I never exagerrate either.

 

[Unionruler]

I don't. I park some of my money in investments and roughly know how much is left in the bank. I am quite bad at splurging on myself, except on holiday, and when I do treat other people (and myself) when eating out I consider it worth it in line with my values. My last banker said my expenses were low for my demographic, so I think I can continue not budgeting.