Sticking to a budget

[DonnaP]

I've pretty much always managed my spending the old fashioned way -- I buy what I want and worry about it later. Not so great when you are trying to stick to a budget! I want to be more fiscally responsible, and get a handle on my debt, which has been growing, rather than shrinking. I've consolidated all the debt into a home equity loan, so now I just need to chink away at that...

 

Anyone have helpful suggestions or ideas on sticking to a budget?

 

 

[Captains wife]

First of all, you need to track how much you have been spending vs. income so you have an idea of what you need or just are spending each month. You can put together an example in Excel, using your bank statements and your pay stubs/other income. (Try to use a more typical month, and seperate essentials vs. non essentials - ie. mtg, bills, food vs. entertainment). You'd be surprised how much you are spending on things you may not really need !

 

Then look at the list and try and figure out where to make cutbacks, even small ones so you can put aside money to pay down your home equity loan. (For example, I cut my lawn mowing service to every other week, I cut my DISH services, I make my lunch and am more careful with my weekly grocery shopping). Some people like taking out a certain cash amount for non-essential spending and only spending that (no credit cards) which is a great way to rein in spending but I personally have trouble with that as my personal expenses ebb and flow. I would also keep a close eye on using your credit card - if you have multiple, get rid of one and keep following your statements on the one you are using so you can see what you are spending money on (thats non essential).

 

Another option to to have money debited from the account where your pay is deposited on an automatic basis each month so that can go towards paying down the home equity loan faster.

 

Hope this helps !

[MissinGrizz]

1. Do not buy coffee outside of the home. That adds up to hundreds.

2. Cut cable and just go to the sites online. For example, ABC has all of its shows a few days after it airs.

3. Ebates.com and other such sites have great discounts and money back opportunities.

4. Do not buy anything you don't have the cash for.

5. Carpool

6. Pack lunches

7. Use a budget app

8. Shop thrift

9. Check out free cycle and free swap sites. You'd be surprised what you can get for free.

10. Every time you have extra money, put it on that home equity line to get it paid off ASAP.

 

Good luck.

[lcoxwell]

There are any number of apps for smart phones, iPads, and tablets that are designed to help one set up a budget and track spending. Some are easier to use than others, and each one has its own pluses and minuses. Personally, I like the mvelopes app. It may not have as smooth of an interface as some of the others, but it is one of the absolute best for tracking spending. From my experience, it is much easier to stick to a budget, when I can clearly see how my money is being used, and when I can easily look to see if my money is going for necessary, or unnecessary, expenses.

[Justin]

I have budgeted for years using a Google Docs spreadsheet. I usually plan 4-6 weeks out, and plan paying bills to coincide with paydays.

 

I now have a Capital One Venture credit card that earns 2% towards travel, which helps when your girlfriend lives 1,800 miles away! I pay everything I can on that card and stay on top of bi-weekly payments to prevent interest accrual.

[Eddienhp]

I do keep a budget on my computer so I can see where we are spending money. I always bring lunch and rarely eat dinner out. I prefer a home cooked meal so I don't mind it. It saves a ton of money. Also I don't buy coffee out either. I gave up cable. I have Amazon prime and Netflix. That alone saved $150 per month. I have started thrifting. Some of the clothes are brand new. It's amazing how much that saves. I find the thrift store shoppers are mostly middle class. I do not go shopping until I need something and I always have a list. That helps to avoid impulse shopping. We have movie night and invite friends over. Movies at theaters are expensive for the three of us. I guess you could say we live an old fashioned lifestyle. It works for us!

eileen

[DonnaP]

Great suggestions!! Thanks!

 

Right now, I am putting together an Excel spreadsheet tracking my spending for the year, month by month. That should give me an idea of where my money has been going...

 

In consolidating student loan and other debt in one place, I feel like I got a handle on some of it. But it is the day to day spending where things go awry.

 

It's amazing how much $$ can go out the door on things you did not plan ...

 

For me, the category that is the hardest to control is travel/entertainment. I like to do fun things, like go into NYC on a whim and see my son. I think in my new budget, I'm going to set some money aside for "fun stuff," but let it accumulate before indulging on a whim. We'll see how it goes.

 

It's very hard to rein in behaviors that have been around for a while

[Justin]

For me, the category that is the hardest to control is travel/entertainment. I like to do fun things, like go into NYC on a whim and see my son. I think in my new budget, I'm going to set some money aside for "fun stuff," but let it accumulate before indulging on a whim. We'll see how it goes.

 

Donna,

 

Absolutely nothing wrong with that! I am now much more focused on spending money on experiences than on stuff: no one can take those memories from me, and I hate being a slave to possessions, whether it be debt or just maintenance of them.

 

[mmg19]

Good topic for many of us facing debt, budgeting, and a change in lifestyle.  Have you set a goal or timeframe to pay off your home equity loan?  It sounds as if you are not facing the same scenario I was when the debt incurred while DH was ill and I was left to pay it.

 

Sticking to a budget can be challenging unless you have tracked all your expenses and spending for at least a month.  If you are trying to pay off debt it is imperative that you hold yourself accountable to every expenditure.  Dave Ramsey's website and tools helped me immensely.  Accepting that expenses must be less than income forced me to slash expenses and held me accountable.    Some things that have worked for me were drastic in eliminating credit card debt but also enabled me to fund an emergency fund and fund a ROTH IRA.

 

1.One credit card used for gas only and paid in full each month.

2.No coffee, tea, water, or fast food purchased on the run. 

3.Keep small cooler in car and use it.  Buy a thermos for coffee.

4.Pack lunch.

5.Plan weekly menus and stick to grocery list.

6.Use cash envelope for groceries.  If I run short on cash, it's time for creative meals of leftovers.

7.Emergency Fund is a line item along with ROTH IRA. Start small and adjust after debt is paid.

8.Wants are not part of budget.  If important save for said want.

9.Cable, utilities, and entertainment can be reduced with no effect on health and happiness.

10.Check bank statement, credit card statement, and utility usage monthly.  Waste, negligence, and errors are found immediately.

11.No impulse purchases.  Nothing is a good deal if you don't have the money.

12.Don't wait to see if you have extra to pay on debt.  Put it in budget and commit to the goal.

 

The eye opener in making a budget work is tracking what and where you are spending for one month.  I was shocked to find I had nothing to show for all the times I broke a $20 and 2 days later cashed another for coffee.  It took 14 months to pay off $11,000 credit card debt.  But when I see how much was saved on what I was paying in interest it made be a believer of specific budgeting.  Our family dynamics are all different and for my family I have 2 boys who have learned the basics of money and hopefully financially responsibility.

 

[imissdow]

I use what I have come to call the index card system.  I have index cards that I write down my month bills/ budget on separated by paychecks. So every week I pull out the correct week and pay the bills noted on the card.  This works really well for the most part. I also have a spot on for savings and for things that don't come up every month. I actually write a check and deposit this money in a separate account at a different bank.  That way if for some reason I need this money I actually need to plan on getting it. I do have a check book for this account but I never carry it with me. I also take out a set amount of money every week. For the longest time I would give myself a allowance and if I stuck to it I would have enough to buy myself what ever I wanted for lunch on Friday. It worked really well for a long time. In part because I knew if I really wanted a treat to eat I knew I could get it Friday.  I really need to get back to this, My hours changed at work and it has been hard to adjust.

[soloact]

I have budgeted for years using a Google Docs spreadsheet. I usually plan 4-6 weeks out, and plan paying bills to coincide with paydays.

 

I now have a Capital One Venture credit card that earns 2% towards travel, which helps when your girlfriend lives 1,800 miles away! I pay everything I can on that card and stay on top of bi-weekly payments to prevent interest accrual.

 

 

Justin makes an excellent suggestion to use reward credit cards for regular spend. Card issuers are courting us with points, cash back and sign up bonuses. Most card issuers will do a product change if your current card is not the best reward structure for your spend. I did this earlier this year. The only issuer requiring  me to do a new application for a second revolver was American Express.  The new card gives 6% cash back for groceries, 3% gas/department stores and 1% regular spend. One percent for non-category spend is tiny. Many better cash back cards are available.  Citi Double Cash comes to mind.