Zero-based budgeting?

[Bernadine]

Does anyone do this and want to talk about it? I'm thinking it might be helpful for us, so tell me all about it.

Are there any good apps to use? 

[illgetthere]

Yes and no. I have a zero based budget, but I go over in "general merchandise" pretty much every month because of a sale and pull it from my savings category. I guess I just need more realistic budgets 🤷
My bank lets me categorize every transaction through the online banking, and I tend to generalize a little bit. For example, everything at the grocery store is groceries.

Edit: tracking spending is still super helpful though. I figure as long as I hit my retirement savings goal and have my emergency fund in place, I'm ok.

Edit 2: my general merch line is typically budgeted at 50-75, but then there will be a good price on a ring doorbell or robot vacuum I've wanted to upgrade to, or I'll find the perfect end table/duvet/random target item to replace the one I've been tired of for awhile so I end up spending $150 or 300. Or stock-up sales. Planned expenses don't go to general merch

[madringal]

We do the DR plan, and use his app "Every Dollar" for our zero based budget. We have gotten really good at having a "Misc" fund of less then $50 a month. Every other dollar is planned for.

[isabel]

Looking over an article from Dave Ramsey, this feels like the YNAB method to me. You only budget what's available to you and you have to "give every dollar a job" so that it is earmarked for something in advance.

[simpsongal]

Just for FYI - someone posted on CEP a week or so ago requesting a budget tracking system and the overwhelming suggestion was YNAB.

I'm too scared to figure out what I actually spend eating out to do this....

[pugz]

Yeah I use YNAB. It is great

[Deleted]

Sort of? I mean, I have a spreadsheet and I budget out 1 year at a time for bills, groceries, entertainment, dinners out, etc, but not to $0, there's always a buffer for incidentals. I budget a year out, but then every week I "balance" the spreadsheet. It's Dave Ramsey-ish and works for us. I would love for the incidentals to be less of a hit every month, but I don't know how to do that well and I'm the biggest offender, at least my H asks before he spends money, I just spend it. It's something I need to work on for sure.

[madringal]

So I will elaborate on my response. We love it. I have a degree in finance, have worked in banking for 20 years, and truly thought I knew everything there was to know about debt repayment and budgeting. The ZBB was mind blowing to me. Especially the part where you basically create a different budget for each month. We always had a "budget" in theory. But our Misc category was always like $1000, because we just allotted all car repairs, school registration fees, etc, to that category. You know, the stuff that's always $500+ but only comes up once a year and some months you don't have any of it and some months you have a lot. So it made it so hard to truly stay on a budget. But then the concept of planning a budget for each month was so eye opening. Like, "Yes, I know this month I have a large medical bill to pay and gymnastics lessons, so I will allocate less to home repairs, and clothing to cover it." But then I can plan for it all, so it doesn't totally wipe out my account when it comes up. Seriously, such a simple fix.

[isabel]

Jul 10, 2019 15:30:18 GMT -5 simpsongal said:

Just for FYI - someone posted on CEP a week or so ago requesting a budget tracking system and the overwhelming suggestion was YNAB.

I'm too scared to figure out what I actually spend eating out to do this....

It's kind of terrifying, but also gratifying. It feels good to take control.

[suzubell]

We also use YNAB for ZBB and love it. Our net worth has increased at a much faster rate since starting with YNAB.

[steph96]

I recently signed up for YNAB. So far it’s working a lot better than Mint did for me. My only problem is that I don’t like what it’s showing me (aka I need more income to do everything I’d like to do).

[Aquatica]

I'm in the middle of a DR class and the forms he gives to do it on paper and with cash at first has been helping. H will just swipe his card and not even know how much he swiped it for so "feeling the cash" like Dave says has been hitting my H and making him realizing how much he really spends.

I don't use an app at the moment and am starting the envelope system at home. I use Excel right now and plan to use a spreadsheet to itemize my savings account to know what's in there/help us.

I really hated doing the zero-based budget but an warming up to it since it works to get H's spending under control. I have all his forms in a PDF, let me know if you need them. I got them from DR Facebook group.

[jlt19]

Jul 10, 2019 15:47:29 GMT -5 @sameoldstory said:

Sort of? I mean, I have a spreadsheet and I budget out 1 year at a time for bills, groceries, entertainment, dinners out, etc, but not to $0, there's always a buffer for incidentals. I budget a year out, but then every week I "balance" the spreadsheet. It's Dave Ramsey-ish and works for us. I would love for the incidentals to be less of a hit every month, but I don't know how to do that well and I'm the biggest offender, at least my H asks before he spends money, I just spend it. It's something I need to work on for sure.

This is almost exactly what I do but I do budget to the penny. Lucky (?) for me we have some line items that tend to grow a lot faster and that helps all the ones I overspend on still keep us in the black overall.

Plus I put everything on credit cards and while I pay them off monthly, it still allows us a buffer since I'm paid weekly.

[Bernadine]

Does anyone use YNAB with PNC? It’s not letting me connect my bank account.

[isabel]

Jul 10, 2019 21:05:47 GMT -5 Bernadine said:

Does anyone use YNAB with PNC? It’s not letting me connect my bank account.

Someone in a fb group I'm part of posted about PCN not working about 6 weeks ago. Sounds like they had some sort of security issue and stopped allowing third-party access or something like that. You may want to check in with YNAB customer service and see if they have a fix.


This may work if you haven't tried it: "You need to go set up two-factor authentication on PNC and then re-sign-in in YNAB. It will then send you a text, and you'll be able to get in."

[dragon's breath]

I use old version YNAB. I have to manually input the info, but it was a one time software purchase, not a subscription. I'm anti-subscription software, so if it dies, I'll go back to excel. However, it has been amazing for helping me achieve a savings goal (purchase property and build a house).

I have managed to save 36% of my take home income to put toward a large goal (buy and pay off a parcel of land). This is after a paycut, loss of child support, putting my son through two years of community college, and having to replace my car (took a loan, but paid it off after two years). My take home income is 38% of gross pay, because I put so much toward retirement, plus I have an allotment taken out to cover the property payment. So, for the last three years, I've been living off of less than 25% of my gross pay (that includes mortgage, bills, groceries, "slush funds" (for stuff like car maintenance, home maintenance, etc), vacation money, even what I spent on the car and college).

I'll be able to ease up a little soon, but will still be saving for the next part of my goal (have to do it in stages...land first, then save to build house)

Anyway, this would not have been possible for me without truly dedicating myself to this way of budgeting-- tracking every penny and carefully considering every single purchase I make. I didn't sacrifice everything-- I still put a little to fun stuff.

As useful as it has been in helping me reach my goal, and will continue to be in helping me reach my goal, I can't wait until I can stop doing it! After going through this, it will be nice to be debt free and go back to just "as long as I save x amount, I can do anything I want with the rest". I'll probably keep a dedicated travel fund though, because I never want to feel guilty about paying for travel.

[pugz]

I enter everything manually in YNAB. Our income is the same every month so I put that in on the 1st and then budget all that money and then I manually input all of the transactions. Helps me stay on top of things that way. I got 4 months free to start, google the YHL YNAB code

[lust2hart]

We have used month-to-month zero-based budgeting for about 5 years now. It changed our lives and I'm a huge cheerleader of it. We use an Excel spreadsheet.

A key component for us is to make a new budget each month, because each month is different. An unanticipated benefit for us has been that it's made us a lot more intentional with our time as well as our money - every month, we're pulling out our calendars to remind us of what's going on and what we want to do with our time (which a lot of times has a money aspect to it as well). This really helps us cut down on surprises.