Planning pictures and budgets
Above is a picture of the budget I set out for myself every month. The basis is that I write down what I spent money on by keeping receipts and dropping them off on this table. The actual budget is written on construction paper and the rows represent: budget amount, spent amount, over- or under-spent, and special notes. Once I enter the amount into the appropriate column, based on categories, I can throw the receipt away. At the end of the month, I tally all the expenses, see where I went over and under...
My favorite categories are "gifts/charity" and "incidentals" because I feel free to spend on those as opposed to feeling constrained in other areas... Example being that my least favorite categories are "eat out/entertainment" and "travel" because I always fill those up.
Still, by keeping the categories separate and tracking everything I spend, I can tell when I go overboard, in what area and by how much. I sometimes look a couple months ahead of time and say, "I'll budget less this month to have more that month." That's especially important for travel, an area where you can easily spend a few hundred bucks on a single plane ticket and exceed one month's budgeted amount.
I remember posting about the cons of living in LA, namely that I couldn't afford to. And I wondered how I could go on a budget date and other things... well those tough economic days are still here in a sense. The only differences for me personally are: a) i actually keep track, thanks to this construction paper budget, and b) that I can afford to have a column in my budget for savings. Ed kindly responded here about the whole ballin on a budget broke issue.
I know talking about specifics in personal budgets (income, debt, etc) is taboo, but I'd be interested in getting a rough idea of how my friends manage money. [Sarcasm:] I know the above budget is the most high-tech thing you have ever seen, so feel free to praise the novel system I've come up with... No really, do you have any best practices to suggest?
2 comments:
I use an Excel sheet for my budgeting. Using Excel and the cell referencing/coding makes it easier to see your total spending and left over money as you go - versus doing it on paper and having to add everything up by hand each time you spend more money.. but hey, to each his own. :) Excel does the math for you.
I actually have something set up to where it has multiple months in view at once. That way if I know I have something coming up next month that will cost a lot (like your plane tickets) I budget some money out for it during the month or months prior... and use the cell referencing to keep track of the total money I've put aside for it. (Does that make sense?)
Anyways, longer story short, I use Excel and each time I spend money, I keep my receipt and don't throw it away until it's been updated in my Excel file (similar to what you do). Some of my categories are: Rent, Utilities, Groceries, Eating Out/Entertainment, Gas, School, Free (which is just a little extra money in case something comes up I wasn't expecting), Phone Bill, and then I will add a category if there is something like a trip coming up.
I use Quicken. I started using Microsoft Money when I was in college because it came with my computer. I only recently got the new version of Quicken. So even though I had to pay for the software, I consider it well spent if I use if for a few years.
Otherwise, I essentially do the same thing you do. Receipts go in an envelope in the kitchen and I total them up once a month. I'm not so good about cash receipts, but the ones on plastic I download directly from the bank.
When I was working, I paid off my car and then put what I was making in car payments into savings each month. Now that I'm a student again, it's all semester to semester.
I also separate my grocery and eating out bills. It's easy to see (for me) that eating at home and bringing my lunch to school is about 3x less expensive than dining out for lunch and dinner (esp. in DC).
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