How Do You Budget For The Month?

[UKMum]

I know Im asking some really basic questions here, but I cant seem to find a thread which covers this question that I have been wondering about?

Now that me and my family are becomming more frugal, I seem to be finding it hard to make up/plan a budget for a whole month.

I was reading some of the threads about 1 once a month cooking and making lists for every shopping trip and also plans for all incomming and outgoing money!
Im getting overwhelmed

What I was wondering was, If anyone could enlighten me about their budget plans. What system do you use for deciding how much to spend on groceries and household bills etc.....

I see so many of you have your plans in your signatures, you all seem so organised
Could someone let me know how it is done...please!

[pammy]

I plan my budget around the paychecks. Once a month doesn't work for us as dh gets paid bi-weekly.

I know it's overwhelming. And lemme just say, I keep tweaking my budget still. I'm always trying something else. You probably will try a few things before you find a way that will work for your family.

This is just what I do, it works for us: (Dh gets paid today so I will write exactly what i will be doing today)

We have a few set bills due certain days of the month. I split them up and put them on my 'basic budget' paper. Basically, two columns for his bi-weekly paychecks to cover the month. So when dh gets paid I know which one of those I need to pay (ie. mortgage payment by the 15th so it's in the first column so it isn't late, car payment by the 1st so it's in the second column so it isn't late, etc.). This way I won't forget which one I need to pay and am making sure they are paid on time. I also have a set amount I get in cash for what I call my Variables. This is my goals for groceries, gas, and spending money divided by two since dh gets paid bi-weekly, and that is a set amount per paycheck. Right now that's $300, so that amount is written on my basic budget, in both columns as well. I then take all my bills that have come in for the past two weeks and write those out. On my basic budget paper I just write down Utilities in both columns, as there is no set amount for us, they all come scattered thoughout the month.

Okay, so my set bills are paid, my utility payments are made, I've got cash for groceries, gas and spending money. What is left over is what I use to pay down debt with. These figures fluctuate, so that is why I made a basic budget, it's flexible and not set in stone.

Anyway, that's how I do it. So many here have different ways, let's hope they chime in so you can get some good ideas that may work for you.

Best of luck!!

[britbunny]

Pammyboat - I think you've hit on something there when you say that the budget is flexible.

We have our various bills that go out by Direct Debit each month which we call our "fixed costs", this includes money that goes into my account for groceries to stop us from overspending. After that all other things are decided on a month-by-month basis - petrol, house stuff, annual expenses, birthdays etc.

Because we lump all the fixed costs together we can quickly see how much is left for everything else, and budget accordingly. It's true that you tinker with it all the time and new ways of doing things come and go until you find what works best.

[Emerald_Mommy]

We use and Excel spreadsheet. At the top of the sheet we have listed all our assets (bank accounts, mutual funds, etc.) Next to that we list our GUARANTEED income (Philip's job).

Next we list all our categories of expenses. First is tithe, next is personal savings, next is housing, etc. Then we just "plug" the income into the categories. If there's income left over we can put a little more in somewhere. If we're over our income we have to shuffle the money around in the categories.

Any extra money we make during the month goes straight to our bank account (we might keep a little in the house "just in case").

Your first few budgets will probably not be completly accurate, but that's okay! As you learn how to budget you will also be learnng how to cut some of your bills. So what you need for groceries this month may not be what you need next month, and so on.

I really recommend Dave Ramsey's books for getting out of debt and starting a budget. He really breaks it down for you.

No matter what you do with your budget remember - you and your family are the most important. You pay creditors or debt AFTER you've allowed for food, shelter, & utilities.

Good luck!

[UKMum]

ThanQ for the replies.
I have so many ideas which Im going to put into practice.
I like the methods you both use adn I think it will be a case of trial and error until I find the way which will suit us best.

Really great to hear from likeminded people.

[Telephus44]

I know that this is going to seem like a radical statement but - we don't have a budget. We currently live well below our means, so we know that we always have enough to cover expenses with some leftover. We have a minimum balance we maintain in our checking account as a cushion and just pay the bills either as they come in, or sometimes DH will save them for a week or two and pay a lot of them at once.

Mind you, since we keep all of our records in MS Money, we do run reports every couple of months to keep track of our spending by category - so we know where we seem to be going overboard.

[guest7]

These are all good points and similar to Emerald_mommy in keeping track of the expenses... plugging money in where needed, I do the envelope system. Each week- I deposit exactly what I need to into my 2 checking accounts. The deposit amounts were determined by my regularly occuring bills divided into months. Then I take the rest with me. I separate the cash I took into 3 envelopes to last me until the next pay.
Envelope 1: gas money
Envelope 2: grocery money
Envelope 3: everything else. Whatever is left over from your paycheck goes in here. This is your discretionary money. It's what you have extra after you've paid your essential bills, grocery, and gas. It can be $5, it can be $200 but whatever it is... you use this for anything you want to buy that is not gas or grocery. PERIOD.

PUT AWAY THE CREDIT CARD AND THE DEBIT CARD!! You no longer need them. You have cash-o-la now! You are a big-wig!

Whatever is leftover in these envelopes at the end of the payperiod is deposited back into the account and sent off toward a preselected debt or savings account. PERIOD! Very simple indeed.
I keep a running tally of what the $ was used for-. ex: groc 1/10 $26. Prescription $20 1/7. I round up so that my coins land in my change jar... which in turn goes toward a savings account.
I can't believe how this very easy system has worked.
Advantages:
1. I don't want to spend paper money. It's harder to part with.
2. I see where every penny goes- I can analyze spending much sooner. Use excel or other computer system to catagorize- or just use a ledger.
3. I always have cash on me (or in my home). This was never the case before- in fact I was always overddrawn- despite a good income.
4. I have been able to control spending. I've only spent $5 in discretionary spending since 12/19/05! That's remarkable for me.
5. The extra money allowed me to pay off a $3200 cc bill in less than 1 month!
Of course your situation will be different. Your $ deposits will be different. your cash needed is different. Most importantly- you allow youself some room for the forgotten stuff. Give yourself some flexibilty to cheat a little. Gotta have some fun.
The budget changes every month. Next month; I'm going to drop my grocery budget from $450/mo to $300/mo as a challenge. Increase my savings deposits.
And get some exercise too!

[zakity]

I have a spreadsheet that has everything on it. DH gets paid every other week and I have it broken out to which bills are due in each pay period. I have bills figured out for two months. I also track the bills by when we receive them rather than when they are due. I can see if we didn't receive one in the mail (has happened before, usually a cc bill ).

[guest7]

Originally posted by zakity
I can see if we didn't receive one in the mail (has happened before, usually a cc bill ).

That worries me a bit. It has happened my me several times. Thankfully- I always look on line for my account info. But supposed you didn't notice.. then you'll have a late fee. More cash to the cc?
Could it be withholding the bill?

[Lucky Star]

A few tips for starting a budget:
~ Track ALL of your spending for a month... that will give you an idea of how much you actually spend. Break your spending into categories that make sense for you. Then, you can see if your current level of spending is reasonable or not.
~ Once you see how much you currently spend, decide how much you would like or think you should spend in each category.
~ Don't forget to budget something for emergency or non-regular expenses that only occur once or twice a year (e.g. repairs, medical expenses, insurance, subscriptions, taxes, etc.). Break those expenses into monthly amounts that you need to put aside in order to cover them. That way, when something unexpected happens or a semi-annual bill comes up, you are prepared and it doesn't destroy your budget.
~ Build in some cushion and some "fun" spending. If you try to go too radical too soon, it will be extremely difficult for you and your family to stick with the budget. Make sure you budget some money for entertainment purposes, as well as for some "blow" money that you and your family are free to spend as they wish. It doesn't need to be much, but it will make a difference by not making you feel like you are denying yourself everything.
~ Start with baby steps. Don't try to do everything at once. For example, even if you would like to eventually cut your grocery budget in half, you probably won't be able to do it the first month, since it will take time for you to adjust. So, cut it by 10% the first month, then once you meet that goal, cut it by another 10%... That way, you'll be able to feel that you're making real progress while you're learning these new behaviors.
~ Finally, don't be too hard on yourself if you go over budget! The first step is to start one, and you'll get much better at it as you go through it.

The bottom line is, make it work for you! There are as many budgeting systems as there are people doing it... And you'll see lots of good ideas on these boards, but don't try to do them all at once. Even if you just change one thing each month, your life will be transformed! Good luck

[motivated]

Hello Frugalfanny,

I never wait for my cc bill to arrive but send the payment as soon as I get paid - this is usually four days before the bill arrives.
Also I have a direct debit set up for the minimum payment in case the worst happens and I cannot phsically pay the bill myself. They only collect this if my payment does not arrive before the due date ie. I pay on the 15th and the due date is the following month on the 7th. I had to write to the cc company to arrange this - peace of mind is all - hope this helps.

[homesteadmamma]

There are so many great tips already posted in this thread. One thing I would like to suggest though is take baby steps. It can become very overwhelming if y ou try to do it all at once.

Track your spending for a full 3 months and then work from there. Then you can set a budget that meets your needs. Be flexible because invariably you will have an unexpected expense or even fall off the frugal wagon. It happens to the best of us.

Good luck in working it all out.

[forestdale]

Yep, some great tips here. UK, don't expect an instant solution to this budgeting thing. It will be a work in progress for a while. It's important to get yourself a little note book and write down EVERYTHING you spend. Then you'll know where your leaks are and what you're spending most of your money on. don't guess this, it's important to track it.

From then on it will depend on how you spend your money. There are lots of methods - I personally use the envelope method and that works for me. Others use different ways. First things first though - track your spending and then work out which way you'll go.

[zakity]

The missing bill thing happened way before they were putting them online (like 8 or 9 years ago). But, I have had a bill arrive late (really really late, one of the "joys" of rural living) and if I didn't track when it should arrived, by the time I got the bill and sent in the payment, it would have been late.

[AmyBoz]

Best of luck to you! I have no advice, as I don't really budget, per se, but it sounds like you've gotten some great advice, the most important of which, I would have to say, is BABY STEPS.