What "kind" of budget do you use?

[MisaLady]

I'm curious... what kind of budgets do you all use, if you use a "budget" at all? By that I mean do you have a "zero-based" budget (where you determine where every last penny is spent up front, even if you've got some sort of "misc" category), do you do something expense based (where you list your expenses, possibly including saving, and then the rest is spent however), some sort of hybrid or something I haven't even mentioned?

[Lindsey]

To get out of debt we used Dave Ramsey's zero based budget. Now, I know "roughly" what should be spent each month and just have savings/retirement come straight out of his checks and the rest I can spend however (food, gas, blow etc). Sometimes I slip up and we will eat "beans and rice" way at the end of a pay period if say I decided to have a road trip and use to much gas that month.

[Greebo]

We're pretty much zero based now. We used to send the snowball at the end of the month, but that left us too much latitude and the snowball ended up being the "misc. whatever" fund. So now, pay comes in, money gets allocated, including the snowball up front.

[wwe11]

We use the zero based method also. I know where every penny goes.

[nuisance26]

~I use a "How low can we go" system. I determine how little we can spend in each category without feeling insanely deprived(a little deprivation is a good thing, IMO).
Previously, anything left over was used to pay off car loans and to put into savings. This year we split the extra between savings and home improvements.
I do always know in advance how much extra we should have(and usually there's more since we generally come in under budget)so I guess my system is also 'zero based'. ~

[Maine Girl]

i guess i use the expense based budget. I list all my expenses for the month, including my snowball. My savings is automatically taken out of my check. What is left over gets split between fun money, and now christmas gifts and extra to put in the snowball.

[omalleyc]

We're using a zero based budget. We know where every dollar is going.

[hotprincesscm]

I guess mine is kinda a zero based budget. I use the envelope system and rotate through. As money comes in I put some in the envelope on the top of the pile, and then put it on the bottom of the pile. Each bill has an envelope, savings has an envelope, xmas, and I have a misc envelope for all those little unexpected expenses that seem to pop up. I usually leave out 25-40 a week for gas in the car and things like toilet paper, paper towels etc. Some weeks I'll use all the "extra" money and others I'll have some left over and put it in one of my envelopes. It really works for me. I also write down on paper, every penny, and where it's put. SO I keep track of everything!

[Kerjack]

I am trying to use a zero based budget, but its a huge change for me. I think I need to try the envelope system or some other form.

I used to be an impulse spender, so this whole budget thing is hard for me. But I am learning.

[Holding Pattern]

Both. We have a zero-based so we know where every penny goes. We also have an expense based budget where every penny is logged (ie the zero based allows $25 for entertainment but the expense budget shows where those pennies went, broken down into Festival or Splurge Dinner, whatever, Home Improvement shows what was bought and so on and so forth)
If we don't spend the allotted amount one month then one of two things happen...it is funneled into savings/EF/investments or we will squirrel it back for something else...we want to go see Black Crowes in Nov, so this month's entertainment budget is being funneled to Nov)

Long explanation to say, we do both.

[Grainlady]

We have 1/3 of hubby's take-home pay automatically placed in savings and base our household budget on the remainder and use a zero based budget for that amount. The only debt we have now is the house, which we are attacking. When we're done paying for the house, we'll reverse it, we'll live off 1/3 and bank 2/3.

Years ago when we started this system (long before we heard of Dave Ramsey), the automatic savings account was there to pay for semi-annual car insurance, car tags/taxes, and big ticket household expenses, etc. Those bigger items that aren't in the monthly budget.

Prior to the 1/3 into savings, I would divide the payments into the number of months, and would put that amount into an envelope each month and would be able to cover the bill when it came every 6-12 months. One year I figured out how much of the budget was monthly stuff, and how much was not, and that's how I came up with 1/3 savings and 2/3 monthly budget. It was just simpler for me than envelopes.

We live such a simple life that we no longer require the envelopes. I get a certain amount of cash each payday (every 2-weeks). I put two $50 bills in the grocery Price Book for two weeks worth of groceries. We each get "walking-around" money that is used for all non-grocery items.

I've kept an Emergency/Christmas account for eons that is funded with $1 bills and "found" money (rebates, garage sale, aluminum cans...).

The thing to remember, a budget is never static.... It's always changing to accommodate things. So the system I used when we had two kids at home, isn't the same thing as it is now.

[shoiji]

Mine is basically expense based. Every month I have my regular bills, monthly amount for food and home, amount for saving. Any purchases are put in the food and home category or miscellaneous. A running tally is made to make sure I don't go over for the month. I also check my spreadsheet total with the bank total periodically over the month to make sure I am on track. This has really helped and I am glad to say I no longer have to worry about over the limit fees.

[acabin42]

We have 2 banks we use. Bank #1 has a checking and a savings acct. DH's check is direct deposited into savings account. I figure up the total of bills for the month, add $50, and transfer that amount into the checking. I pay the bills out of checking and "lose" the $50 into the account. Each month there is an extra $50 that never shows in my bank book. (that is 1 way we save money).
Then, we take the balance of his check, leave a portion in savings account, and bring the rest home in cash. This cash is divided into to ongoing envelopes. (one for repairs, the other for emergencies).

Bank #2 has a checking account and a savings account. My check is direct deposited every 2 weeks. $50 goes into savings, the rest goes to checking. DH gets his allowance out of this account, and groceries and just everyday living things comes out. If I'm lucky, the $50 is still in the savings at the end of the month. Sometimes, it's not, but it is always there to start the month. We have no
credit cards, or loans, or mortages, etc. We only have the monthly expenses, such as utilities, insurances, etc.
We sometimes spend more than we should, but then we save some also.

It may seem complicated, but it is simple to me and works for me. Also, I wanted to make sure that the monthly bills will never have a bounced check on them, which is why I have a separate checking account just for bills. That way, I can also look at it at the end of every year and know exactly what I spent on any given bill that year.

[dcompton]

I feel out of place here with you super organized villagers. I don't really budget anymore, not in any strenuous way. I'm paid once a month and only have 4 bills a month, so it's very simple. What I use is really more of a projection of cash flow than a prescriptive budget.

I do it all through my checking account on the computer, for a minimum of six months out. For example, for my October "budget", I show the paycheck, and enter all the bills for the month on the dates they (automatically) are paid. It looks like this:

Paycheck
490 Rent-water
45 Electric
25 Phone
600 CC (all daily, ordinary expenses charged in September)
? Savings (everything left)

The CC amount is a generic amount I plug in. As it varies, I make adjustments for that month, or "downstream" in the cash flow. For Example, in September, I put the 6-month car insurance on it, and also did a lot of stocking up on meats for the freezer, so it's a little over $1000. I have changed the $600 to the actual September charged amount that will be paid on Oct 2 or 3, and adjusted savings for the month down to accomodate it. I find this is just a lot simpler for me than keeping, for example, insurance money in a savings account and taking it out and putting it in. If if exceeds what could be covered by the savings for the month - a really big occasional expense - then I will, of course, pull money out of savings to cover it.

Having this set up months ahead allows me to easily adjust for fluctuations in expenses without a lot of bookkeeping.

I will occasionally track actual expenses by category for a time just to keep tabs on it, but more in the spirit of seeing what's going on than setting a framework for what I should be spending. I tried the more formal methods of budgeting, but they made me crazy. When I was paying off debt, I budgeted more strenuously, but this is working for me now. It has been one of the best side effects of being debt free -- there is more freedom all around. Also, since I live alone, it is simpler since there is only one pot of money and one spender spending it.

[Cricketlegs]

I do an expense method.

I write down all the bills, snowball amounts, grocery, misc, savings and allowances and pay them.

Money left can be used for whatever or basicly it just rolls over to next month.

I like a cushion in the bank so I don't have to get into my savings.