Blonde Granny
Junior Associate
Joined: Jan 15, 2013 8:27:13 GMT -5
Posts: 6,919
Today's Mood: Alone in the world
Location: Wandering Aimlessly
Mini-Profile Name Color: 28e619
Mini-Profile Text Color: 3a9900
|
Post by Blonde Granny on Jul 17, 2019 14:15:47 GMT -5
I use YNAB, but not in the way that software wants it done. I list 2 things as income: VA disability and SS. My budget is based on that monthly income and my monthly expenses are normally always the same. On the chance I see a large interest payment or a couple of dividend payments in my TD Ameritrade account, I will scoop them up in a hurry and transfer them to my checking account. That does NOT count as income, all it does is go into the checking account.
|
|
happyhoix
Distinguished Associate
Joined: Oct 7, 2011 7:22:42 GMT -5
Posts: 20,779
|
Post by happyhoix on Jul 17, 2019 14:54:04 GMT -5
We don't budget. I used to play at it now and then, but neither DH or I like excel sheets or budget planning.
Instead, our strategy has always been to funnel as much money as possible into savings vehicles, paying cash for nearly everything, and to live on what's left over. It helps that we're both fairly low maintenance people, without expensive hobbies or sports. We always tried to live so that if one of us got let go, we could live for a while on just the one salary, so that left money over to pay off our house in 15 years - only debt we have right now is about $2000 on a car payment.
I wouldn't cause it a 'budget' as much as a 'life strategy.'
|
|
Tiny
Senior Associate
Joined: Dec 29, 2010 21:22:34 GMT -5
Posts: 13,357
|
Post by Tiny on Jul 17, 2019 14:56:54 GMT -5
So for the people that do real budgets, how do you handle extra money that you can't count on continuing to receive? My husband has been working a ton of overtime, which I hope won't continue, so it's not accounted for anywhere. Reality doesn't ever match the budget, and I end up either spending it or investing it. In the past I would have categorized this money as "windfall" money. Since my paycheck would cover all my regular/expected expenses and savings - I felt I had alot of choices with what to do with it - and wouldn't want to fritter it away. I had some general rules for how to allocate it. Usually it was 10% for "Fun Money" and then I'd apply the remaining to whatever pressing goal I had at the time (debt down payment, saving to spend on some big house fix up (or next investment property), saving to spend on Vacation (you can never have too much $$ for vacation fun!) or whatever "Holy Grail" item I was saving up for (usually a thing that would go with a hobby I partake in - cause you can go broke having ALL the stuff that goes with any hobby)). Again, since my every day paycheck would keep my Financial Boat afloat - a windfall wouldn't effect the over all plan. It MIGHT affect some "it's gonna take time" kind of line item though. Currently, any windfall $$ would be 20% to Fun Money (spend any way I want) and the rest would go to my "After Tax Personal Retirement Fund" - I'm very light on "cash" (the vast majority of my wealth is Tax Advantaged Retirement accounts and real estate) I want to build up a Medium Pile o' Cash that I can use as 'income' if/when I retire 'early'. I would actually probably figure out how many days or hours of NOT working the amount of $$ would buy me. and tick it off my Days to FI/RE Schedule. I'm very fixated on "Financial Independence" right now.
|
|
haapai
Junior Associate
Character
Joined: Dec 20, 2010 20:40:06 GMT -5
Posts: 5,871
|
Post by haapai on Jul 17, 2019 15:36:57 GMT -5
FWIW, I'm single and I get paid weekly, which results in four five-paycheck months a year. I also have weird overtime patterns. Sometimes I'll get 10 hours of overtime a week for six months at a time followed by six months of absolutely no overtime and while overtime is more common during certain times of the year, it may not materialize during the same months in the following year.
I know enough not to ever rely on OT for anything, but I'm still a bit confused as to why we still speak of monthly budgets as if they were the standard. I see the value of knowing what one's average monthly outgoes are, but I'm confused as to why we are pretending that monthly income is a static number. For many of us, quite possibly the majority of us, monthly income swings around a lot. Every third month, and during periods of high overtime, I am swimming in excess cash that I don't really know what to do with and cannot get used to receiving.
I've pretty much done what Ti4ny did prior to getting FIREd up. I always had a nut and a goal and I swept most of the extra cash into the goal.
|
|
haapai
Junior Associate
Character
Joined: Dec 20, 2010 20:40:06 GMT -5
Posts: 5,871
|
Post by haapai on Jul 17, 2019 15:37:16 GMT -5
double post deleted by author
|
|
Deleted
Joined: Mar 28, 2024 15:37:28 GMT -5
Posts: 0
|
Post by Deleted on Jul 17, 2019 16:07:53 GMT -5
FWIW, I'm single and I get paid weekly, which results in four five-paycheck months a year. I also have weird overtime patterns. Sometimes I'll get 10 hours of overtime a week for six months at a time followed by six months of absolutely no overtime and while overtime is more common during certain times of the year, it may not materialize during the same months in the following year.
I know enough not to ever rely on OT for anything, but I'm still a bit confused as to why we still speak of monthly budgets as if they were the standard. I see the value of knowing what one's average monthly outgoes are, but I'm confused as to why we are pretending that monthly income is a static number. For many of us, quite possibly the majority of us, monthly income swings around a lot. Every third month, and during periods of high overtime, I am swimming in excess cash that I don't really know what to do with and cannot get used to receiving.
I've pretty much done what Ti4ny did prior to getting FIREd up. I always had a nut and a goal and I swept most of the extra cash into the goal.
I use YNAB to budget and with that you work with last month's income. So right now all the money I'm bringing in in July is unavailable until August 1st. At that point, I have my entire month's budget income and I know exactly how much there is to work with. Most of my bills and my auto transfers to things like IRA and 529s all come out on the first day. Then all the money I make in August goes to September.
|
|
Gardening Grandma
Senior Associate
Joined: Dec 20, 2010 13:39:46 GMT -5
Posts: 17,962
|
Post by Gardening Grandma on Jul 17, 2019 16:38:49 GMT -5
FWIW, I'm single and I get paid weekly, which results in four five-paycheck months a year. I also have weird overtime patterns. Sometimes I'll get 10 hours of overtime a week for six months at a time followed by six months of absolutely no overtime and while overtime is more common during certain times of the year, it may not materialize during the same months in the following year.
I know enough not to ever rely on OT for anything, but I'm still a bit confused as to why we still speak of monthly budgets as if they were the standard. I see the value of knowing what one's average monthly outgoes are, but I'm confused as to why we are pretending that monthly income is a static number. For many of us, quite possibly the majority of us, monthly income swings around a lot. Every third month, and during periods of high overtime, I am swimming in excess cash that I don't really know what to do with and cannot get used to receiving.
I've pretty much done what Ti4ny did prior to getting FIREd up. I always had a nut and a goal and I swept most of the extra cash into the goal.
I use YNAB to budget and with that you work with last month's income. So right now all the money I'm bringing in in July is unavailable until August 1st. At that point, I have my entire month's budget income and I know exactly how much there is to work with. Most of my bills and my auto transfers to things like IRA and 529s all come out on the first day. Then all the money I make in August goes to September. On the 3rd Wed of July, we will get our SS deposited into the bank. That money is not available for July - it is entered as "income for August". Then on Aug 1, we will have our pension checks deposited. That will get entered as "income for August". That gives me the total amount to budget for August. Any money that comes in during August will be available for Sept. That's why YNAB can be so helpful for people who have varying amounts coming in each month.
|
|
Apple
Junior Associate
Always travel with a sense of humor
Joined: Dec 17, 2010 15:51:04 GMT -5
Posts: 9,931
Mini-Profile Name Color: dc0e29
|
Post by Apple on Jul 17, 2019 16:58:29 GMT -5
So for the people that do real budgets, how do you handle extra money that you can't count on continuing to receive? My husband has been working a ton of overtime, which I hope won't continue, so it's not accounted for anywhere. Reality doesn't ever match the budget, and I end up either spending it or investing it. I'm another YNAB user (I wish they had not gone to a subscription model, because I "don't do" software subscriptions, so no longer recommend it as highly). Anyway... I get OT randomly. If we have a full crew and no special projects, OT is somewhat rare. If we are down a person, OT can rack up fast. I have some big $$ goals, and OT money helps me achieve those faster. My budget is based on my base income and two paychecks/month (I get paid bi-weekly). When I get OT or the "extra paycheck", I put 50% into my biggest money goal (pay off property). Then I fill in any holes and pad the slush funds (I know furnace replacement will have to happen soon-ish, so I'm padding extra there right now). Once I'm happy with how everything looks, anything leftover also goes into the "pay off property" fund. While I have my basic budget, it is not set in stone, so if I go a little over in groceries, I pull from something else. My goal is to never have to pull from the property fund though, so any time I go over, I feel it in the loss of something else I want (fun money, quilting/yarn fund, vacation, etc).
|
|
justme
Senior Associate
Joined: Feb 10, 2012 13:12:47 GMT -5
Posts: 14,618
|
Post by justme on Jul 17, 2019 18:40:07 GMT -5
I broke down and upgraded to the new YNAB this year. I like it. For one since I connected all my accounts it's way easier to check my credit cards and bank accounts to see if anything fishy is going on. And since I spread n.y spending across 5 credit cards it aggregates my spending so that's nice. I budget, but it's flexible and more of a guideline. If I go over I usually just adjust the budget and go on. Gives me a better idea where my money is going though.
|
|
Lizard Queen
Senior Associate
103/2024
Joined: Jan 17, 2011 22:19:13 GMT -5
Posts: 14,659
|
Post by Lizard Queen on Jul 17, 2019 19:51:00 GMT -5
I tried, and tried and tried to budget. Not to save more, because I was already saving without trying, but to feel free to spend more. I'd probably do better at both if I could stick with it, but it's not my personality. I just get a feel for spending, and know when it's time to quit. Just like when you eat until you're full and stop. Plus, putting most things on CC's, I get a review every month.
You definitely need a healthy slush fund to go this route.
|
|
Deleted
Joined: Mar 28, 2024 15:37:28 GMT -5
Posts: 0
|
Post by Deleted on Jul 17, 2019 20:05:21 GMT -5
So for the people that do real budgets, how do you handle extra money that you can't count on continuing to receive? My husband has been working a ton of overtime, which I hope won't continue, so it's not accounted for anywhere. Reality doesn't ever match the budget, and I end up either spending it or investing it. For me it goes into a miscellaneous income bucket and goes to taxable investing. Back when I had a loan it went to that.
|
|
teen persuasion
Senior Member
Joined: Dec 20, 2010 21:58:49 GMT -5
Posts: 4,026
|
Post by teen persuasion on Jul 17, 2019 20:48:44 GMT -5
FWIW, I'm single and I get paid weekly, which results in four five-paycheck months a year. I also have weird overtime patterns. Sometimes I'll get 10 hours of overtime a week for six months at a time followed by six months of absolutely no overtime and while overtime is more common during certain times of the year, it may not materialize during the same months in the following year.
I know enough not to ever rely on OT for anything, but I'm still a bit confused as to why we still speak of monthly budgets as if they were the standard. I see the value of knowing what one's average monthly outgoes are, but I'm confused as to why we are pretending that monthly income is a static number. For many of us, quite possibly the majority of us, monthly income swings around a lot. Every third month, and during periods of high overtime, I am swimming in excess cash that I don't really know what to do with and cannot get used to receiving.
I've pretty much done what Ti4ny did prior to getting FIREd up. I always had a nut and a goal and I swept most of the extra cash into the goal.
I'm with you on the monthly income isn't regular. DH used to get 21 biweekly paychecks, none during summer break (no choice). For that matter, monthly bills aren't regular, either. We've got high months, and low months. January is a high month: property tax + HO insurance + CC bills from Xmas, easily $4k+. But then February usually has no extra bills, just the regular consumption CC bill (groceries, gas, electric, phone, internet): might be $800. We swing high, medium, low, all over in a year's span, there is no "regular" monthly amount of expenses. I just take a longer view: annual income vs spending. The checking account was down to $2k a while ago (but that was also strategic - I was engineering low assets for FAFSA purposes); now it's at $17k. But I'm going to begin pumping 100% of my paycheck (after payroll taxes) to my new SIMPLE IRA for the rest of the year.
|
|
Tiny
Senior Associate
Joined: Dec 29, 2010 21:22:34 GMT -5
Posts: 13,357
|
Post by Tiny on Jul 17, 2019 22:10:24 GMT -5
FWIW, I'm single and I get paid weekly, which results in four five-paycheck months a year. I also have weird overtime patterns. Sometimes I'll get 10 hours of overtime a week for six months at a time followed by six months of absolutely no overtime and while overtime is more common during certain times of the year, it may not materialize during the same months in the following year.
I know enough not to ever rely on OT for anything, but I'm still a bit confused as to why we still speak of monthly budgets as if they were the standard. I see the value of knowing what one's average monthly outgoes are, but I'm confused as to why we are pretending that monthly income is a static number. For many of us, quite possibly the majority of us, monthly income swings around a lot. Every third month, and during periods of high overtime, I am swimming in excess cash that I don't really know what to do with and cannot get used to receiving.
I've pretty much done what Ti4ny did prior to getting FIREd up. I always had a nut and a goal and I swept most of the extra cash into the goal.
I have no idea, either, about a monthly budget. I tried to think monthly... but it failed. Back in the day, I had a "two path" budget. The first "path" was all the stuff that literally spent daily, weekly or was paid monthly. I split the month into 1st paycheck and 2nd paycheck and arranged my "due dates" so some were "1st paycheck" and others were "2nd paycheck". The second "path" was the stuff I needed to save for but paid only a couple of times a year (xmas gifts, other gifts, vacation, season tix, car stuff, vet visit, clothes, etc) Some of the things I knew how much I would need (season tix) other stuff I just pulled a number out of my ear (vet visits? $100 sounds good, clothes? $1000 sounds good- it was the 80s). I totalled up those "bills" rounded up and divided the total by 24. I then rounded up that amount and that became an "amount" I needed to take off the top (and save) of each paycheck. When I needed to spend the $ I saved, I did and marked down the total spent and what line item it was against. Yeah, sometimes I spent more than I had "saved" - so then when my fiscal year started again, I'd up the amount I saved for the "second path". I generally treated the two extra checks each year like the "first path" (since I still needed to buy groceries and put gas in my car. ) . The extra $ from these checks I saved - it was part of the plan to use "yesterday" dollars for today's bills. I wanted to somehow get enough money into checking so that when I wrote out a check for a bill - I was using money that was already there AND not freshly flowing in from the current paycheck. Once I had enough money in checking consistently to be using yesterday dollars for this month's expenses - that's really when my finances even out and I could really focus on future spending/planning. That and continually adding things and $$ to the "2nd path" fund and budget (I found out that it was called a Sinking Fund(s) .) I wasn't worrying about paying this months bills - and I could make money decisions for the next month without worrying about 'not having enough money to pay the bills'... The amount I was leaving in checking for the First Path AND the amount I was dumping in the savings (to spend later) was close to what I was actually spending. Waaa lah! A budget!
|
|
hurricanegirl
Junior Member
Joined: Dec 21, 2010 16:28:17 GMT -5
Posts: 231
|
Post by hurricanegirl on Jul 18, 2019 9:07:03 GMT -5
My personal opinion is that you need a budget as you get close to retirement I started "playing around" with numbers when I was 55, and thank God for that, because the company I worked for closed 3 years later in the great recession of 2008 Career type Jobs were non existent, and I decided that if I could retire at 62, I could also retire at 58, just had to cut an extra hole on the belt and cinch a little tighter fast forward to 11 years later. I did fine, managing to remain debt free, paying all the bills, and self financing my health insurance, while living well Every December I create my new black book for the following year, listing all expenses separately with a guestimated expenditure (based on historic info for utilities and the like), as well as sinking funds, and allowances for the month. I also 'log each actual bill amount monthly. My EOM actual totals are generally within 40-50 dollars, plus or minus. I know what I will get from SS and pensions, so I know how much "Cash Supplement" I need each year and thankfully I did plan well enough that I simply withdraw / transfer that amount from taxable accounts to my checking. so, theoretically each January 1, all my bills for the year are paid. and yes my cash transfers are well under the 4 percent rule I feel I am well posed for (at least) 25 -30 years, I do not anticipate being here at 100 yo
|
|
Deleted
Joined: Mar 28, 2024 15:37:28 GMT -5
Posts: 0
|
Post by Deleted on Jul 18, 2019 9:38:54 GMT -5
I always start with an annual budget and break it down to monthly. Ideally, I'd be paid once a year.
|
|
azucena
Junior Associate
Joined: Jan 17, 2011 13:23:14 GMT -5
Posts: 5,113
|
Post by azucena on Jul 18, 2019 10:00:34 GMT -5
FWIW, I'm single and I get paid weekly, which results in four five-paycheck months a year. I also have weird overtime patterns. Sometimes I'll get 10 hours of overtime a week for six months at a time followed by six months of absolutely no overtime and while overtime is more common during certain times of the year, it may not materialize during the same months in the following year.
I know enough not to ever rely on OT for anything, but I'm still a bit confused as to why we still speak of monthly budgets as if they were the standard. I see the value of knowing what one's average monthly outgoes are, but I'm confused as to why we are pretending that monthly income is a static number. For many of us, quite possibly the majority of us, monthly income swings around a lot. Every third month, and during periods of high overtime, I am swimming in excess cash that I don't really know what to do with and cannot get used to receiving.
I've pretty much done what Ti4ny did prior to getting FIREd up. I always had a nut and a goal and I swept most of the extra cash into the goal.
I'm with you on the monthly income isn't regular. DH used to get 21 biweekly paychecks, none during summer break (no choice). For that matter, monthly bills aren't regular, either. We've got high months, and low months. January is a high month: property tax + HO insurance + CC bills from Xmas, easily $4k+. But then February usually has no extra bills, just the regular consumption CC bill (groceries, gas, electric, phone, internet): might be $800. We swing high, medium, low, all over in a year's span, there is no "regular" monthly amount of expenses. I just take a longer view: annual income vs spending. The checking account was down to $2k a while ago (but that was also strategic - I was engineering low assets for FAFSA purposes); now it's at $17k. But I'm going to begin pumping 100% of my paycheck (after payroll taxes) to my new SIMPLE IRA for the rest of the year. My paychecks are every other week on Friday and DH's are 15th and last day of month. I've been able to save so much more since I started budgeting weekly on Fridays. Each Friday, I project out the bills due for the week, grocery, gas, and spending money (up/down depending on events). Then, I also project the following week. Taking special care if there are no paychecks coming that week, then I set aside enough money in a separate checking account to wait for that week. If I leave it in the regular account, I've learned it won't be there by week two. The next Friday, it's like I pay myself and move the money from one checking account to the other and go about my business. In each weekly projection, I move the excess that we don't need to savings and watch that account grow. Our only debt is the mortgage. If I had other debt, I'd use the extra to pay it off.
|
|
Deleted
Joined: Mar 28, 2024 15:37:28 GMT -5
Posts: 0
|
Post by Deleted on Jul 18, 2019 10:27:58 GMT -5
My paychecks are every other week on Friday and DH's are 15th and last day of month. I've been able to save so much more since I started budgeting weekly on Fridays. Each Friday, I project out the bills due for the week, grocery, gas, and spending money (up/down depending on events). Then, I also project the following week. Taking special care if there are no paychecks coming that week, then I set aside enough money in a separate checking account to wait for that week. If I leave it in the regular account, I've learned it won't be there by week two. The next Friday, it's like I pay myself and move the money from one checking account to the other and go about my business. In each weekly projection, I move the excess that we don't need to savings and watch that account grow. Our only debt is the mortgage. If I had other debt, I'd use the extra to pay it off. I'm currently getting two "paychecks" for June, July, and August. One is my regular paycheck earned last year, and the other one is retirement beginning June 1. I'm transferring the retirement check into savings even though I will have to transfer some of it back since my first SS check won't come until the end of October. I get a false sense of how much money I have if I just leave it there. What I am hearing, though, is that a lot of you used to budget but don't now. Some of you are tracking your spending, but after you have spent it rather than before. Maybe Edelman is right.
|
|
laterbloomer
Senior Member
Joined: Dec 26, 2018 0:50:42 GMT -5
Posts: 4,347
|
Post by laterbloomer on Jul 18, 2019 10:28:10 GMT -5
I make a budget, but it's not all written in stone. I have my goal of what my miscellaneous spending will be each month but I seem to always exceed that. The good part is that I don't go over the maximum of what it can be. All the bills get paid with some savings thrown in.
ETA - Odd income gets put into miscellaneous revenue and usually ends up in savings.
|
|
lynnerself
Senior Member
Joined: Jan 3, 2011 11:42:29 GMT -5
Posts: 4,166
|
Post by lynnerself on Jul 18, 2019 10:51:56 GMT -5
We never had a real budget. We seem to instinctively spend less than we earned and liked to save. Later in life we just made sure all the savings was done first and spent everything else. Made enough money to cash flow most things like insurance and emergency repairs. Before we retired we thought we needed to track spending to figure out
how much money we needed monthly. That project lasted about 3 months before we gave up. We ended up just doing some generalizations. Retired 4 years, still no budget, and things are working out fine.
|
|
Knee Deep in Water Chloe
Senior Associate
Joined: Dec 27, 2010 21:04:44 GMT -5
Posts: 13,703
Mini-Profile Name Color: 1980e6
|
Post by Knee Deep in Water Chloe on Jul 18, 2019 11:07:42 GMT -5
I always start with an annual budget and break it down to monthly. Ideally, I'd be paid once a year. Ideally, I'd be paid without having to work.
|
|
movingforward
Junior Associate
Joined: Sept 15, 2011 12:48:31 GMT -5
Posts: 8,358
|
Post by movingforward on Jul 18, 2019 12:12:57 GMT -5
I have never budgeted. I know what my monthly expenses are, everything is on auto pay, and I also automatically contribute to my IRA and taxable account every month. There is no standard budget for things like clothing, vet bills, car repairs, etc. In general, I just live below my means and most everything gets cash flowed. On rare occasion I have stopped an automatic monthly contribution to my IRA or taxable account in order to cash flow a very large expenditure (this has happened 2 times in the last 8 years).
|
|
Tiny
Senior Associate
Joined: Dec 29, 2010 21:22:34 GMT -5
Posts: 13,357
|
Post by Tiny on Jul 18, 2019 12:56:44 GMT -5
For those of you with no budget - if you had an unexpected expenses with something like say your car. What if you had a $3,000 bill to fix it? Sure, you'd put that on your credit card to buy some time (and it's convenient) but when the CC bill comes due - where does the money come from to pay your bill in full? I would assume the CC balance due will also have your regularly scheduled spending with the 3K on top of that.
Do you just cash flow it from your next paycheck/income (which then begs the question how do you pay for all the things your paycheck was suppose to pay for)? Do you pull money out of savings? (would this money come from a sinking fund? that you expected to use? Would it come from your "savings" in general? )
If you do take money from "savings" do you adjust your future spending to replace it?
How does that effect what your short term plans (if you suddenly don't have as much spending money as you thought you would) ?
Maybe my life is just complicated - I can't "cash flow" more than a 1K expense... without it effecting my future day to day life (and cash outgoes). In my example, I would put the expense on a CC, and then pull 3K out of my "sinking fund" account and the rest of the amount due would come from my checking account (as it's expected and part of the "budget"). Since I allocate a fixed amount from each paycheck to go to the sinking fund AND if the expense was for one of the things I use the sinking fund to pay... I might not have to change anything - my current and future life/plans stay the same. I don't have to belt tighten or change outing plans and if an opportunity comes along I don't have to take into consideration that I just hemorrhaged 3K. The "budgeted" amount I send every month to the "sinking fund" smoothed it out. Of course, if I have a string of big somewhat unexpected expenses.... I would probably have to sit down and review how much was in the "sinking fund" (I NEED to be able to pay my property taxes)... and I might have to up the amount I send to it every month to "replenish" it...
Just wondering... if you don't have a "budget" of sorts and you DO have a big expense how do you know how much you should cut back - and what happens to future things you were planning to use future cash flow money on? What is the effect if you have a string of big expenses?
|
|
weltschmerz
Community Leader
Joined: Jul 25, 2011 13:37:39 GMT -5
Posts: 38,962
|
Post by weltschmerz on Jul 18, 2019 13:13:34 GMT -5
For those of you with no budget - if you had an unexpected expenses with something like say your car. What if you had a $3,000 bill to fix it? Sure, you'd put that on your credit card to buy some time (and it's convenient) but when the CC bill comes due - where does the money come from to pay your bill in full? I would assume the CC balance due will also have your regularly scheduled spending with the 3K on top of that.
I don't have a budget. I get three pensions, and don't have to worry about roof repairs, mortgage, property taxes, broken water heaters, etc., because I rent. If the stove or fridge stop working, building management replaces them. I don't have to worry about paying for healthcare. I have zero credit card debt, and no debt at all, really. The pensions are more than enough to live comfortably if I don't go crazy. I can go out to eat twice a week or go to the movies or a show. I also have a small savings account for emergencies, like car repairs.
|
|
weltschmerz
Community Leader
Joined: Jul 25, 2011 13:37:39 GMT -5
Posts: 38,962
|
Post by weltschmerz on Jul 18, 2019 13:15:21 GMT -5
The bank keeps offering money. "You have great credit! Would you like a hefty line of credit from our bank?"
No, thank you. I don't need it, and I hate being in debt.
|
|
TheHaitian
Senior Associate
Joined: Jul 27, 2014 19:39:10 GMT -5
Posts: 10,144
|
Post by TheHaitian on Jul 18, 2019 13:31:32 GMT -5
We don’t budget per say, we max retirement accounts, HSA and FSA... and make it work with what is left!
|
|
Deleted
Joined: Mar 28, 2024 15:37:28 GMT -5
Posts: 0
|
Post by Deleted on Jul 18, 2019 13:59:10 GMT -5
For those of you with no budget - if you had an unexpected expenses with something like say your car. What if you had a $3,000 bill to fix it? Sure, you'd put that on your credit card to buy some time (and it's convenient) but when the CC bill comes due - where does the money come from to pay your bill in full? I would assume the CC balance due will also have your regularly scheduled spending with the 3K on top of that. I'm assuming most people that don't budget (on YM, not in the world in general), still have savings and contribute to it regularly. It's just not broken down into categories.
|
|
Gardening Grandma
Senior Associate
Joined: Dec 20, 2010 13:39:46 GMT -5
Posts: 17,962
|
Post by Gardening Grandma on Jul 18, 2019 14:03:58 GMT -5
My personal opinion is that you need a budget as you get close to retirement I started "playing around" with numbers when I was 55, and thank God for that, because the company I worked for closed 3 years later in the great recession of 2008 Career type Jobs were non existent, and I decided that if I could retire at 62, I could also retire at 58, just had to cut an extra hole on the belt and cinch a little tighter fast forward to 11 years later. I did fine, managing to remain debt free, paying all the bills, and self financing my health insurance, while living well Every December I create my new black book for the following year, listing all expenses separately with a guestimated expenditure (based on historic info for utilities and the like), as well as sinking funds, and allowances for the month. I also 'log each actual bill amount monthly. My EOM actual totals are generally within 40-50 dollars, plus or minus. I know what I will get from SS and pensions, so I know how much "Cash Supplement" I need each year and thankfully I did plan well enough that I simply withdraw / transfer that amount from taxable accounts to my checking. so, theoretically each January 1, all my bills for the year are paid. and yes my cash transfers are well under the 4 percent rule I feel I am well posed for (at least) 25 -30 years, I do not anticipate being here at 100 yo My personal opinion is that you need a budget as you get close to retirement
This. When we were both working, we did what a lot of posters here do. Our savings and retirement contributions came out of our checks and we deposited and spent the rest. We were paid bi-weekly so had a bi-weekly mindset. If we were caught by a large unexpected expense we'd either pull the money out of savings to cover it or put it on a CC and pay it off as fast as possible. If we pulled it out of savings, we'd work on putting it back. But when we started to think about retirement, that was another whole ball of wax. We went to a financial planner who asked "Do you have a budget?" Answer was "no". "How much money do you need to live on?" Answer was "Honestly don't know". I suppose what we net since that's what we are living on now. Bottom line is he got me to budgeting and planning. By the time DH retired in 2008 (about the same time I found this board) I had a pretty good handle on budgeting and forecasting. We had to get used to a monthly income and making that money last for a month instead of just two weeks. When we have a large unexpected expense (doesn't happen very often anymore) we can't just "pull it out of savings" - we have to make our retirement savings last the rest of our lives, so we have to figure out just how much we can afford to take out each year. (A bit tricky since we don't know how long we will live or what large healthcare expenses we might incur). Our annual income now is higher than it was when we were working; budgeting is simply a habit that helps me sleep better at night.
|
|
laterbloomer
Senior Member
Joined: Dec 26, 2018 0:50:42 GMT -5
Posts: 4,347
|
Post by laterbloomer on Jul 18, 2019 14:16:17 GMT -5
Tiny Cronewitch did a post one time that changed my life. She said as far as she was concerned if she had to save up for something she couldn't afford it. The idea is to have enough extra cash (unrestricted savings if you prefer) that if she saw something that cost say $5000 she had the money, she just had to decide if that was what she wanted to spend it on. It has completely changed how I function with money.
|
|
azucena
Junior Associate
Joined: Jan 17, 2011 13:23:14 GMT -5
Posts: 5,113
|
Post by azucena on Jul 18, 2019 15:12:31 GMT -5
My budgeting method of siphoning off the excess paychecks before they get spent has built up $50k in savings. I don't see a need to split it between emergency fund and sinking fund since it's big enough to cover both. If I needed to pull $3k, I'd save to replace it. It's taken me a while to get here, but now it's mostly on autopilot.
|
|
haapai
Junior Associate
Character
Joined: Dec 20, 2010 20:40:06 GMT -5
Posts: 5,871
|
Post by haapai on Jul 18, 2019 16:18:39 GMT -5
What I am hearing, though, is that a lot of you used to budget but don't now. Some of you are tracking your spending, but after you have spent it rather than before. Maybe Edelman is right. Discouragingly, I think that he's right. That is, actual wealth-building and financial security are achieved mostly by folks who have substantial discretionary income and have pretty much automated much of their finances. At least that's what I've experienced. If you look at my net worth, it only started taking off after I had achieved those two goals (in my case, there was almost no income growth).
But getting to the point where you have a decent amount of discretionary income and the confidence to automate it is hard. I never would have gotten to that point without first doing some heavy-duty study of where my money was going.
Edelman seems a tad uninterested in the folks that aren't already positioned for launch.
|
|