My Official "Trying to Make a Budget" Thread

[QM]

I've tried a few times to start a budget and have failed, failed and failed. I really want to make a budget because I want to learn to live off cash and not our credit cards. DH says that he's willing to not use the cards, but I don't really know where to start.

I know that I'm supposed to keep track of our expenses for three months and try to figure out what we spend throughout the year on bills, etc.

I'm going to try to work off of Gail Vaz Oxlade's system. Here's a link to her money jar system. Money Jar System - a different way of budgeting I like her budget worksheet. But before I can type in figures, I know I have to figure out what we spend on average.

So here we go. I'm going to post figures from time to time in case I need to go back to it and to get your help along the way.

Time to start finding out what we spend... *gulp*

[QM]

This is my goal...to live off of DH's income only (including bills, savings, charitable contributions) and my income to go solely into RSP's and RESP's.

DH gets paid every other Friday. How would you do it? Someday take out money enough for two weeks and live on a bi-weekly basis? Or would you do a weekly basis? Would weekly be easier to keep track of?

I don't know where to start.

[Greebo]

You're thinking about an allocation plan. That's later.

First - How much income will come in this month, total?

[QM]

First - How much income will come in this month, total?

Do I have to include my income? I want to put my income onto Line of Credit, savings account and RSP donation like I always try to do. I want to live off of only DH's income; so can I only include his please?

[Greebo]

Do I have to include my income? I want to put my income onto Line of Credit, savings account and RSP donation like I always try to do. I want to live off of only DH's income; so can I only include his please?

No, your income too. We'll ASSIGN it later.

Example:

October, 2010 Budget
INCOME 
Hubby:  $2,000
Wifey:  $2,000
Total:  $4,000

... to be continued ...

[QM]

This is a copy of the spreadsheet I've been using from that "Build A Budget that Works" by Gail Vaz Oxlade.

A Snapshot of a Month
TOTAL INCOME $5,704.58
Net (he) $3,358.33
Net (she) $2,100 (I am self-employed so this figure can vary. This is also without taxes off. Since I'm self-employed the taxes get figured out at the end of the year. I tend to break even every year because of expenses, etc. So what I take bring in is roughly what I end up with.)
Rental income $0.00
Spousal/Child Support $0.00
Government Benefits $246.25
Other: $0.00

Fixed Expenses
Mortgage & Property Tx $1,251.66
Electricity $175.00
Gas & Water Heater $76.55
Maintenance/Improv/Condo $0.00
Cable $90.69
Telephone $28.11
Cell phone $28.65
Internet $46.22
Insurance house $95.58
Car payment $135.36
Car Payment $0.00
Insurance & Liscen. $12.50
Childcare $0.00
Insurance: life & health $103.32

Gail believes that this is what the breakdown should look like of where your money is going...
Housing s/b 35%
Transportation s/b 15%
Life s/b 25%
Debt s/b 15%
Savings s/b 10%
...Already my housing costs are at 47.61% of DH's income.

Hopefully these numbers are accurate. I've done my best.

[Greebo]

You will find living off of only half of hubby's income after the housing expenses to be almost impossible.

[QM]

Here's a strange scenerio that I should probably bring up...

DH and I try to contribute 10% of our income to charity (usually our church). It's a percentage that DH wants to strive to stay near. I withdraw $160 bi-weekly for his 'charity money' and I end up withdrawing around $100 bi-weekly for my 'charity money'.

With my income...DH wants me to put all my earnings into either Line of Credit or RSP's. I've also been tucking some $ away into a joint savings account. I haven't told him that. I'm hoping to surprise him with a few thousand in savings and ask him if he minds that we pay off our Line of Credit for once and for all. I have three full-time daycare kids...I transfer one family's money onto our Line of Credit, one family's money into Joint Savings Account and one family's money into RSP contribution.

So I transfer all my income away and withdraw my 'charity money' from his income. Does that make any sense?

[QM]

You will find living off of only half of hubby's income after the housing expenses to be almost impossible.

This is why I give up so easily.

[Greebo]

Not being able to put all of your income into retirement is no excuse for not having a plan for your money. All you're doing there is setting yourself up for a disappointment and giving yourself an excuse to not do what you know you need to do.

Your sig line indicates that you haven't figured out BS2 yet - which means you have consumer debt. You are working at opposing goals if you focus on retirement now when you still have debt.

I don't like Gail's "life" category - too simplified. She also puts the wrong categories first in my opinion.

But that said - you still need a budget. Sit down and work out your income vs. expenses in detail - more detail than just "Life" too - and then post that.

And list your debts - balance, min pmt and interest rate.

[Ceashels]

This is why I give up so easily.

You stated in your original post that you've failed repeatedly ... are your goals realistic?

I love Gail and think she has a good foundation but you need to tailor the numbers so you succeed instead of struggling so much that you give up.

You might need to put some of your income into the general funds instead of it going solely for the line of credit. You may also find that as you start living off the budget... you'll have more of it because you know where it all goes. You can always make putting your income to the Line of Credit as a goal and revisit the idea in 3 months.

[QM]

Your sig line indicates that you haven't figured out BS2 yet - which means you have consumer debt. You are working at opposing goals if you focus on retirement now when you still have debt.

BS2 is my Line of Credit which equals $4,156.77 as of today. Last week I had to write a Line of Credit cheque for my yearly house insurance cost (which is included in the figure). The Line of Credit cheque was over $1,100. This is why I need a budget...to plan for these expected bills.

DH and I both have a credit card. They are with separate companies because DH wanted to switch companies. For the past few weeks, DH is 'supposed' to be getting me a joint card for his c/c company. I'm not holding my breath. I like having separate c/c's so we can see what he spends and what I spend. I pay off both cards off in full each month so that I don't have to pay for interest. If I can't pay off the card in full (which is happening more and more), I write a Line of Credit cheque. Our Line of Credit has a very low interest rate.

I don't like Gail's "life" category - too simplified. She also puts the wrong categories first in my opinion...

Do you think her "Build a Budget" spreadsheet will work? I hope it's OK that I'm using it. It does the work in figuring out percetages, etc. for me...which I like.

Sit down and work out your income vs. expenses in detail - more detail than just "Life" too - and then post that.

Like it or not, I'm going to try and track what we spend in the month of October. That should give us a clearer picture of what is happening with the money.

[QM]

You stated in your original post that you've failed repeatedly ... are your goals realistic?

I don't think my goals are realistic...no. Which is why I give up so many times over.

I love Gail and think she has a good foundation but you need to tailor the numbers so you succeed instead of struggling so much that you give up.

Have you watched her TV show? I agree that we need to tailor the numbers so that we succeed. This is why I started this thread...for the much needed support along the way.

You might need to put some of your income into the general funds instead of it going solely for the line of credit.

What 'general funds' are you talking about?

You can always make putting your income to the Line of Credit as a goal and revisit the idea in 3 months.

I agree, but I have to try and get DH to agree with me. This is why I'm trying to come up with a spreadsheet to show him the numbers. As Gail says, "The numbers don't lie."

[Ceashels]

Well, if "the numbers don't lie" once you figure out what you are typically spending and what you have left, Hubby might HAVE to agree that part of your income needs to go to the budget and not the Line of Credit.

In this thread, I'm considering general funds anything that isn't debt (LOC). You are also going to need to take into account what your taxes MIGHT be since they won't get figured out till the end of the year... else you would just be dipping into the LOC to cover the taxes you owe.

Figuring out what your money is going toward is a daunting process but it can give you so much information. You might want to figure out a budget on just your hubby's income (his ideal plan), both of your incomes, and even a third counting half of your income as part of the household income (the rest can be earmarked for line of credit).

Its going to take some playing around to see which works out the best for the present (so you STAY on budget) and for the future so you have all planned expenses covered with a working system.

Greebo and I still revisit how we budget every 3 months or so... just to make sure it is still the right budget for our household.... and we've been doing it for about 2 yrs now. We see it as a work in progress.

And I love her show... I still watch the reruns of it fairly often and I loved it when she made the guy sleep in his car for the weekend. ROFL

[QM]

Once I fill in the variable section for the month of October, would it be too soon to figure out a budget? What if there was no expenses for a category like car repairs in October? How would I know what to budget for car repairs?...Guess?

Also, how do I figure out what I'll need in case we need to buy another van, a dishwasher, a washing machine, etc. The van is a big expense!...How on earth would I budget for that?! Is that something to be concerned about once I know what we're spending our money on?