Budgeting and Spending Question

RHNewfie · 02-06-2009, 08:19 AM

I am sure there are some budgeting fiends here in this forum!! I have a nice budgetary sheet set up for the year that tracks all spending and payments etc, calculates monthly remainders and then projects an amount to move into savings and the like.

However, this to me seems more like cashflow tracking as opposed to budgeting. Do some of you manage to successfully forecast your expenses for the next month, if you do, then what do you do? Adjust numbers, move more to savings etc?

Also, I don't want this to feel like running a business, so I think there should be an allowance for us so to speak... if we do our chores of course!! Do others do this? If so, do you calculate an amount based on a percentage of income or just set a figure etc?

Thanks for any insight!!

Prospector · 02-06-2009, 10:19 AM

I do something like that for our household budget. My wife and I have setup 25 different categories of expenses (mortgage, utilities, groceries, medical, etc) and each category gets a monthly allocation based on historical or anticipated needs. The total of all allocations equals our combined household income. I try to keep the allocations fixed from one month to the next, with occasional adjustments as necessary. My income is pretty much fixed so that forms the basis of all the allocations, whereas my wife's income varies so we use it as "infill".

Bookkeeping is done with MS Money - every expense incurred is charged to one of the categories and a running tabulation of all categories is accomplished using the software. Each category is a separate running total so you can see how you are doing by studying the numbers. It does take some discipline to maintain but has worked well for us going on 20 years now.

Data entry is done by me on a weekly basis, and monthly allocations are adjusted as necessary. Also funds can be transferred from one category to another as need arises.

Yes, the budget does indeed include personal allocations for both my wife and I (and I highly recommend that your wife's allocation is at least 30% greater than yours - it makes for much better relations). There is also a category for savings (which makes it pretty clear to us just how little we actually have). We also have included a few special savings categories that I call 'Funds'. Saving for a new car? Check the balance in the Car Fund. Vacation? - Vacation Fund. In laws coming to visit? How's that Getaway Fund doing.

The greatest benefit we have found is the ability to see exactly where our income is going which greatly assists us in making financial decisions.

RHNewfie · 02-06-2009, 10:23 AM

Great response! Thanks! Is your personal allocation a fixed figure? How did you figure it out?

Prospector · 02-06-2009, 10:32 AM

Quote:

Originally Posted by RHNewfie

Great response! Thanks! Is your personal allocation a fixed figure? How did you figure it out?

When we first started doing this some 20 years ago they were indeed a percentage of income, but over the years with regularly changing incomes, costs, and needs they settled out as fixed monthly dollar amounts. Changes to these amounts are now infrequent, on an 'as really needed' basis, and carefully negotiated.

acarr · 02-06-2009, 10:42 AM

What you can do is separate out the expenses as to fixed...your monthly mortgage, car payment, health insurance ect...your yearly or semi yearly fixed costs like auto insurance, home insurance, property taxes unless this is included in your escrow of your home and monthly and yearly variable costs such as utilities, telephone, ect. The variable costs and semi yearly and yearly fixed costs are the only things you need to be concerned about as to changes. Look at your utility bills, telephone for the specific months in the past and budget those numbers based on the month. Same thing with the yearly/semiyearly fixed costs.

karmaz00 · 02-06-2009, 12:48 PM

wow some good info thanks

02-06-2009, 08:19 AM	#1
RHNewfie Have My Own Room Join Date: Oct 2008 First Name: Jeff Location: Oooooh Canadaaaaa Posts: 2,007 Trading: (15)	Budgeting and Spending Question I am sure there are some budgeting fiends here in this forum!! I have a nice budgetary sheet set up for the year that tracks all spending and payments etc, calculates monthly remainders and then projects an amount to move into savings and the like. However, this to me seems more like cashflow tracking as opposed to budgeting. Do some of you manage to successfully forecast your expenses for the next month, if you do, then what do you do? Adjust numbers, move more to savings etc? Also, I don't want this to feel like running a business, so I think there should be an allowance for us so to speak... if we do our chores of course!! Do others do this? If so, do you calculate an amount based on a percentage of income or just set a figure etc? Thanks for any insight!! __________________ σπένδομαι

02-06-2009, 10:19 AM	#2
Prospector I'm nuts for the place Join Date: Jan 2009 First Name: Mike Location: Arizona's beautiful Verde Valley Posts: 2,500 Trading: (11)	Re: Budgeting and Spending Question I do something like that for our household budget. My wife and I have setup 25 different categories of expenses (mortgage, utilities, groceries, medical, etc) and each category gets a monthly allocation based on historical or anticipated needs. The total of all allocations equals our combined household income. I try to keep the allocations fixed from one month to the next, with occasional adjustments as necessary. My income is pretty much fixed so that forms the basis of all the allocations, whereas my wife's income varies so we use it as "infill". Bookkeeping is done with MS Money - every expense incurred is charged to one of the categories and a running tabulation of all categories is accomplished using the software. Each category is a separate running total so you can see how you are doing by studying the numbers. It does take some discipline to maintain but has worked well for us going on 20 years now. Data entry is done by me on a weekly basis, and monthly allocations are adjusted as necessary. Also funds can be transferred from one category to another as need arises. Yes, the budget does indeed include personal allocations for both my wife and I (and I highly recommend that your wife's allocation is at least 30% greater than yours - it makes for much better relations). There is also a category for savings (which makes it pretty clear to us just how little we actually have). We also have included a few special savings categories that I call 'Funds'. Saving for a new car? Check the balance in the Car Fund. Vacation? - Vacation Fund. In laws coming to visit? How's that Getaway Fund doing. The greatest benefit we have found is the ability to see exactly where our income is going which greatly assists us in making financial decisions.

02-06-2009, 10:23 AM	#3
RHNewfie Have My Own Room Join Date: Oct 2008 First Name: Jeff Location: Oooooh Canadaaaaa Posts: 2,007 Trading: (15)	Re: Budgeting and Spending Question Great response! Thanks! Is your personal allocation a fixed figure? How did you figure it out? __________________ σπένδομαι

02-06-2009, 10:42 AM	#5
acarr Have My Own Room Join Date: Oct 2008 Posts: 1,307 Trading: (34)	Re: Budgeting and Spending Question What you can do is separate out the expenses as to fixed...your monthly mortgage, car payment, health insurance ect...your yearly or semi yearly fixed costs like auto insurance, home insurance, property taxes unless this is included in your escrow of your home and monthly and yearly variable costs such as utilities, telephone, ect. The variable costs and semi yearly and yearly fixed costs are the only things you need to be concerned about as to changes. Look at your utility bills, telephone for the specific months in the past and budget those numbers based on the month. Same thing with the yearly/semiyearly fixed costs.

02-06-2009, 12:48 PM	#6
karmaz00 Habanos Join Date: Dec 2008 First Name: Jason Location: victoria Posts: 1,855 Trading: (1)	Re: Budgeting and Spending Question wow some good info thanks __________________ Habanos Collector Since 2003