My only budgeting is to earn much more than I spent so I don’t have to think too much about it. That means that I live quite frugal and other than food don’t really buy much on a regular basis.
Even though I’m in the same category (currently spend less than half), this approach isn’t viable for everyone. Some people work hard and long, but just have too high expenses by just existing. You can’t really be frugal on rent and basic food, you need something.
there were things involved like moving a couple of times between countries, a divorce, refocusing on a different career to be able to get where I wanted to be.
fair enough but still, I don’t think it should take that long for someone to have the basic necessities of a life in this society. that should just be the baseline, regardless of employment situation
Perhaps we misunderstand each other, It took me 20 years to get to the point that all my budgeting is that I earn much more money than that I spent so that I never need to think about budgeting. It’s not only about rent and food.
This works great until you lose half your income and you don’t change your spending habits because your cats are used to a certain standard of living. Hooray for my line of credit!
YNAB is a web app and mobile app. It’s beauty is that it helps you look FORWARD, instead of tracking your PAST spending.
It’s not much use to see that you spent too much last month, again. Instead, YNAB helps you know what your average expenses are and lets you set aside meaningful amounts for each kind of expense = that’s what we call a BUDGET.
Yes, it has a cost. Yes, it’s ironic to spend money on a tool to save money. But here’s the thing: it really works! For me, it’s easily worth the cost.
I second this. I feel silly paying for it, but if you (and your spouse, if applicable) totally buy into their system, it’s a way of life. The biggest thing is how it sets up purposeful sinking funds (instead of just “savings”) - every dollar has a job. Now when we have major expenses, it’s like - meh! Water heater went out? No sweat, home maintenace got you covered. And if it doesn’t, you roll with the punches and transfer it from some other category.
Using YNAB’s sinking funds helped me get out of my considerable divorce debt. They’re like envelopes you put money into ahead of time, for every single category/thing you want to spend on or save for.
If you need to spend more than is in the envelope, you must transfer from another envelope first
If a bill is higher than expected, transfer money from another envelope
If you want to make an impulse purchase that doesn’t fit an envelope, make mine and transfer money in from an existing one
And so on. It’s a great system, and I continue to use it even though I’m now debt free, except for my monthly bills and car lease payment.
Yup. The ease of use for my wife and us being able to check our own funds real time has made it invaluable. I’m sure! there ways i could do it myself but she’s gotta be able to use it.
Same here. I see a lot of people complaining gabout paying for it, but it’s solid software, and worth the money. It’s helped my wife and I manage our finances and we never argue about money. That’s worth a lot of money IMO.
I avoid automatic payments like the plague. I never give insurance companies, utilities, credit companies, etc. permission to withdraw from my account. All it takes is one underpaid office drone to make a mistake, and you’re overcharged a thousand dollars. You can (probably) get the money back, but not without a time consuming hassle.
Ever notice that billing mistakes on paper bills are virtually never in your favor? In my experience, I’ve always been overcharged, and never undercharged. I don’t expect automatic payments to be any different.
I let them mail me paper bills, which I then pay through my bank’s website. When the payment is made, I write the confirmation number on the bill itself. Yes, it’s more cumbersome, but that’s a price I’m willing to pay. There’s a verifiable paper trail, and I’m completely in control. Since it’s my money, I deserve to be.
In my country you can set an upper limit to the automatic payments. (It’s mandatory for the banks to implement.) So I just put in like plus 3-4 dollars as the max they can withdraw above my average bill and I’ll just get a notification if they try to withdraw above that limit (and they would be refused to do so). Fortunately it never happened.
My wife and I have a pretty simple method. First, we each have our own bank accounts with our own spending money. Then, we have a joint account that we use for bills. Finally, we have a separate bank that we use for groceries and gas.
With these allocated separately, we can each have our own spending money, and have enough in every other account to take care of what we need. The paycheck just gets split between these in different direct deposit amounts.
The most important thing is to understand your costs, plan them out, and be aware of what comes out and when. Then, you just follow that plan. The biggest part is making sure you know that you can only spend exactly that much on yourself, which is where our individual accounts come in handy. Whatever we want to buy, we can, because we know safely that our needs are taken care of.
Since we have our math to allow more money in than money out, each account (minus our spending ones) accrue their own savings, and can be transferred between at any time. Overall, it works for us.
I import my transactions into Beancount, a plain text accounting software, a few times a year. My setup uses basic machine learning to classify each transaction. This gives me a decent understanding of my situation when combined with Fava, which visualizes the data.
Each month I save a set amount of money automatically into a few different index funds.
I make sure everything that is a monthly payment is something I actually use. Only one streaming service at a time, cheapest phone service etc.
I keep an eye on my main account every now and then to see how much I have. If i feel like it is stacking up more than what I may need in a short amount of time, I either buy more index funds or put it in an account with interest on it. If the main account ever runs out of money I have done something wrong.
I would say I don’t really budget. For me I do not feel the need. I am by no means rich, but not spending money on wasteful things really does a lot. E.g. make food most of the time instead of eating out, cut your own hair, only buy things that last and do your research before buying anything significant.
Please keep in mind I live in the EU and pay a sort of salary insurance so I do not have to stress a lot if something were to happen to change my situation.
Don’t autopay when possible, keep your credit cards down to one or two and itemize at the end of the month so you can catch things adding up. Things like groceries, budget roughly around the same amount each time, things like eating out, door dash etc that’s where the itemization comes in, do the math or use an app to help add it up. Put money into a savings account whenever you have extra. Do not, I repeat do not look at your bank and go “sweet I have an extra $300 this month, time for a new [whatever]”, put it in the savings
I use one credit card for groceries and other essential items and another one for “luxury” expenses like buying hardware, games, online subscriptions and such.
Other than that I just use my default online banking to occationally check that everything is alright.
“Pay yourself first”. My bank has a feature that allows me to setup automated money transfers to and from different accounts based on rules I setup. The most important one is when any deposit is received from my employer, 20% of the amount is automatically transferred from my chequing account to my retirement account. My paycheque is deposited overnight and the money is already “gone” by the time I wake up in the morning. Treat it like another tax on your income that you have no way to avoid paying. Then live off what’s left.
I have accounts for travel, house expenses, utility bills, groceries, car expenses, and fun money. Each of them gets part of my paycheck. Every couple of months I take a look to see if things are getting out of whack.
The best part is that I can be an idiot and overspend with the fun money account. If I spend it all, there’s absolutely no repercussions, since everything important is already safely in different accounts.
Also, when car expenses (or vacations) roll around, I already have money put aside for it.
I use a spreadsheet. When I need to budget, I download my transaction history as a CSV and a couple of simple sumif formulas give me all the info I need.
I’m not aware of a good FOSS solution software-wise and frankly I don’t want my entire financial history to be accessible to a data mining firm.
I write all my expenses and incomes down onto app called Wallet by budget bakers. I don’t set any monthly budgets or anything however, because I find that keeping track alone already makes me much more mindful consumer. I already have records of my finances for almost 3 years so it’s pretty interesting to get to monitor my spending across a long timeframe.
I just use my notes app and the letter “x” Two denote whether that thing has been paid already. I use a method called the Dave Ramsey every dollar method where every dollar has a purpose and you budget in such a way that absolutely every single dollar you get has a job. So, I get paid, and then my bank account is nearly empty two days later, but every dollar has done its job. I know that there are unexpected expenses, so a few dollars are miscellaneous, and their job is just to cover the $5 subscription that comes out quarterly, I forgot, etc.
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