Budget recommendations

[lexus]

We have problems saving money. If it's in the account, it gets spent. We have also racked up some credit card debt that we would would like to pay off. We are looking into a loan that is a lower interest than the credit card to transfer the balance to and pay off. I need some recommendations for theories or strategies to get our finances under control. We aren't church going people so no need to include authors who are focused on tithing and such. We tried Dave Ramsey, the envelopes were a pain and I was always nervous I would lose the money. Any ideas?

[penguingrrl]

Okay, so Inhave a few thoughts:

1) I hate the Dave Ramsey approach. It seems to me like suggesting to people who are already tight that they should have untraceable cash that could be lost or stolen is insane in the current world of traceable digital spending. Totally irresponsible advice IMO.

2) You need to keep tight control. Sit down and create a budget. Base it on previous spending for needs, but not wants. Be realistic.

3) plan ahead, especially for food. Extra unplanned take out for dinner is a killer for my budget, so I keep things on hand to prevent that (grill extra chicken and keep salad to put it on, nuggets for the kids).

4( each and every pay day keep exactly what you're budgeted to spend that pay cycle and put every other penny towards CC debt then savings. I keep a certain number in savings for emergencies, but otherwise my checking account goes down to $100 by the night before pay day (under $100 and I'm charged). Every spare penny went to CC debt when we were paying it off. An extra $5 here and $10 there seemed inconsequential but it helped.

[lexus]

Apr 29, 2017 20:13:35 GMT -5 penguingrrl said:

Okay, so Inhave a few thoughts:

1) I hate the Dave Ramsey approach. It seems to me like suggesting to people who are already tight that they should have untraceable cash that could be lost or stolen is insane in the current world of traceable digital spending. Totally irresponsible advice IMO.

2) You need to keep tight control. Sit down and create a budget. Base it on previous spending for needs, but not wants. Be realistic.

3) plan ahead, especially for food. Extra unplanned take out for dinner is a killer for my budget, so I keep things on hand to prevent that (grill extra chicken and keep salad to put it on, nuggets for the kids).

4( each and every pay day keep exactly what you're budgeted to spend that pay cycle and put every other penny towards CC debt then savings. I keep a certain number in savings for emergencies, but otherwise my checking account goes down to $100 by the night before pay day (under $100 and I'm charged). Every spare penny went to CC debt when we were paying it off. An extra $5 here and $10 there seemed inconsequential but it helped.

So it's the unexpected stuff that kills us. Today it was finding out that my car needs new shocks and struts. Dh he decided to do it himself so that saves us $600 but he's off to spend $600 on parts. Things like birthday parties, and celebrations pop up and then those expenses get added to the credit card. Do you save a certain amount of money to pay for that kind of stuff? What about Christmas? Do you save money for car and home repairs? We are both salary employees so there isn't really a way to make more money (other than getting my masters which I'm about to start).

[lala]

We do it very basically. X amount every 2 weeks for spending, period. That covers all food, clothes, gifts (not Christmas), smaller house purchases, etc. It doesn't include monthly bills (mortgage, utilities, student loans, insurance, car, phones, etc). We save automatically every month for retirement and aim to put the leftover money in savings for those "unexpected," items, travel, long term savings towards big house projects, etc. Things are really unexpected b/c well, something is always bound to happen. Cars & houses need fixing. Teeth need cavities, etc.

I think you have to budget your money so that some is automatically saved every month for these things.

We do put everything on credit cards & pay monthly (or more) to pay it all off. We love that b/c it's easy to tracking we reap the benefits of points. But, we've also never carried debt or gotten into any trouble. If you need to get yourselves disciplined and back on track, it's probably best not to use credit cards at all.

RE: Christmas - that is separate, we talk about it a few months in advance and decide how much we will spend total - then if needed less money goes towards on regular savings.

I know it sounds basic, but you really just have to spend less than you make. Dh is salaried and does usually get a bonus but we don't count on that for regular expenses. (usually goes towards vacation or big projects). I don't work, so the one thing that helps is I have time to shop/research so we don't have to pay for convenience as much. We are pretty cheap in general, each in different ways.

[polarbearfans]

What got us out of credit card debt and in a place to save money was going cash only. We each got $100 personal cash every paycheck(2 weeks). $200 every paycheck for food. Any food treats came from personal money not the grocery budget; cookies/ice cream/something only one person would eat was personal money. Any meals out personal money. Coffees/energy drinks personal money. It really made us think before spending money, made it easier to pack economical lunches for work because once the grocery and personal money was gone then there was no more money.

[penguingrrl]

Apr 29, 2017 20:32:43 GMT -5 lexus said:

Apr 29, 2017 20:13:35 GMT -5 penguingrrl said:

Okay, so Inhave a few thoughts:

1) I hate the Dave Ramsey approach. It seems to me like suggesting to people who are already tight that they should have untraceable cash that could be lost or stolen is insane in the current world of traceable digital spending. Totally irresponsible advice IMO.

2) You need to keep tight control. Sit down and create a budget. Base it on previous spending for needs, but not wants. Be realistic.

3) plan ahead, especially for food. Extra unplanned take out for dinner is a killer for my budget, so I keep things on hand to prevent that (grill extra chicken and keep salad to put it on, nuggets for the kids).

4( each and every pay day keep exactly what you're budgeted to spend that pay cycle and put every other penny towards CC debt then savings. I keep a certain number in savings for emergencies, but otherwise my checking account goes down to $100 by the night before pay day (under $100 and I'm charged). Every spare penny went to CC debt when we were paying it off. An extra $5 here and $10 there seemed inconsequential but it helped.

So it's the unexpected stuff that kills us. Today it was finding out that my car needs new shocks and struts. Dh he decided to do it himself so that saves us $600 but he's off to spend $600 on parts. Things like birthday parties, and celebrations pop up and then those expenses get added to the credit card. Do you save a certain amount of money to pay for that kind of stuff? What about Christmas? Do you save money for car and home repairs? We are both salary employees so there isn't really a way to make more money (other than getting my masters which I'm about to start).

So, unplanned big expenses like car repairs come out of our emergency fund. I consider incedentals like gifts for birthday parties part of the general spending. It's rare to go a full month without one kid or another having a birthday party, but 1-2 a month is average, so that's built in.

Christmas kind of depends on where our emergency fund and general cash are. When we were paying of CC debt we kept it lower, and this year it will be lower due to having exhausted savings to buy ohrnhouse and having a mortgage.

It really comes down to spending less than you bring in, and adjusting as necessary. I would track your spending for a few months and see where you are. That makes it easier to see where cuts can happen.

[lexus]

I was really hoping you had some magic solution!!

A few years ago we were really doing well with our spending (saving, paying down credit cards, etc) but it's been difficult to get back there. I decided to go back to grad school and I'm doing the Summer Only program for the next three years. So I think we will look at what we can cut now to avoid adding to the credit cards and then adjust down again in July when the first year of grad school is over. We will have some extra expenses for grad school (an extra set of car seats for someone to pick the kids up, paying someone to pick the kids up) but after that we have some savings coming up. Thanks for the advice on gifts and such.

[dragon's breath]

I use YNAB (older version, not the subscription one) to track my savings for different categories. I have a line item for everything, and save a little each month into each category. That way, even the "unexpected" bills have already been somewhat planned for.

I can go into more detail later, if you want, but I really do mean everything. I know my car insurance should be $x/year (I pay every 6 months), so I put $x/12 away every month, so that when the bill comes, the money is there. Things that fluctuate (electricity-- more in summer when I use the AC, less in winter), I look at past spending, take an average, and put that average away each month. In the winter, the "extra" builds up, adding to the total, and in the summer I start to spend it down.

If it's partly a "we see it in the account, so we spend it" issue, one way to get that under control is to move all these little "save for bills/emergency fund/etc" amounts into a separate account that you don't see every day. Also save a little off the top and move this into something you don't see all the time either. Treat that money as if it is not to be spent on anything except what you have allocated it to. Track the amounts in YNAB or on a spreadsheet, so that you don't have to have 20 little accounts, but you know where every dollar in that larger account is supposed to go.

I save monthly for gifts, hobbies, future car replacement, future house build, vacation, Christmas, bills, memberships (amazon prime, Costco, etc). Even those "little" bills that only come up once a year-- post office box, photography club ($25/year) has its own line. I try to leave nothing unaccounted for.

It has really helped make sure that I am making my goals (saving for DS's college, future house build, eventual car replacement). It has also cut down mindless spending. I might be able to afford that new fun thing, but if I've spent my "fun money" for the month, I have to wait until next month. If it's more than I have allowed for myself, I have to reduce other fun spending until I have the right amount saved in the budget.

The key is to know your priorities and save/spend purposefully.

[cjcouple]

Ugh, we have the same stuff happening over here. The unexpected expenses have been trips to the hospital for my dad (gas, tolls, lunch, coffee/drinks) plus the usual extras (sports equipment, pics, and concession stand). Plus our meal planning has not been the best so we have a lot of extra stops "just grab wraps and tomatoes, oh we need milk, can you grab some cole slaw?" All of these add up for us. I need to buckle down too.

Anyway, one thing that has worked for us:
1. If you haven't checked in a while, look over your monthly bills and make some calls to see if any money can be saved. Cable/satellite, cell phones, internet all tends to have new plans and bundles all the time. Double check your insurance premiums too. Ask your agent to do new estimates. A year ago, I dropped those by over $200 a month collectively.

2. We opened a bill pay account. Bbasically, all direct deposits drop into checking, I am paid twice a month so we transfer half of the monthly bills into bill pay each deposit. Along with a small savings transfer at the same time.
My husband gets a weekly deposit. We use that for groceries, gas and our weekly allowance.

3. Our allowance is $30ea/wk and we pull that out in cash. That pays for coffee, fast food lunches, treats, etc.

4. Anything left in our checking the night before my deposit also gets moved to savings. So if there is 32.81 before my deposit...we move an extra 32.81 with our biweekly savings transfer. Sometimes its just a few bucks and other times its over $100! Depends on DH overtime and extra expenses not accounted for.

Cost saving tips: meal plan, shop sales, pack lunches (I buy one lunch per week as reward for packing every other day-comes out of my allowance).

Gl

[cjcouple]

Oh for Christmas, we start buying gift cards months in advance to start chipping away. We also use savings. We are lucky because I get a Christmas bonus every year so we just replenish savings with that. And my dh gets 6 weeks of PTO every year and whatever is not used, he is paid out so we use that too.

[court26]

I finally had to set a goal for our savings. I pay all of the bills, but DH does the taxes. It comes up every year that we aren't saving as much as we should. I now have a goal I want in the savings, and also set a checking account number that I transfer over to savings when it gets to that amount. Very small things, mostly mental, but they have helped me to see progress.

[cabbagecabbage]

It sounds like a couple new savings accounts might help. We also fall into the trap of anything on the checking account is free game and gets spent. It's like a black hole. I really hate taking from savings so I'll try hard not to.

I keep my slush fund in cash but it's usually a couple hundred dollars tops. My mom gives me cash or I sell things online or whatever. That's an emergency/fun money.

We don't do credit cards. I know we could earn points but I am not the best at remembering and if we pay interest a couple times a year, that's a loss.

[melew]

I echo a lot of what has previously been said regarding meal planning, being realistic about your budget, etc. A couple of things that come to mind that I have not seen mentioned.

1. Is it possible to transfer your cc debt to a 0% interest card? This would only work as long as it is opened strictly for the transfer and not for additional purchases. Hide the cards or cut them up, but this way you are not paying interest like with a loan and you can apply that savings to the balance to pay off faster. Double check what the terms are though - annual fee, has to be paid off in a certain amount of time, and whether you would feasibly be able to pay off the amount within those time frames.

2. I know the checking account can seem like the black hole when you are using cards for some things and cash/checks/debit for others. We opened a secondary checking account and I transfer the amount spent on the cards at the end of the week from our primary checking to the secondary and pay our card balance from there. That way it is moved from the account like it has been spent (because it has). It helps for me to have a better visual of what we really have left in our checking account.

[Kcthepouchh8r]

All necessary bills come out of auto bill pay. I don't touch a debit card and pay with everything on a credit card that we get 2% cash back on. I have a budget of $200/week to cover groceries/toiletries/dinner out on Friday night. Every Sunday we pay the credit card off in full and dh sends me reminders on tuesday/Friday about what I've spent so far to keep me on track. We both get $120 a month in cash for extras to be spent however we want. Birthday gifts I usually can cover in the $200/week. Any big expenses come out of an emergency fund we contribute money to every month. We save the credit card cash back for fun stuff, like right now we have $1,000 built up That will go towards an anniversary vacation.

[Kcthepouchh8r]

Also, if your credit is decent you're better off transferring any credit card balances to a different credit card. Lots of offers for 0% interest for 18 months and a 2% balance transfer. You cancel when 18 months is up and transferring again.