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Old 09-04-2009, 01:06 PM   #21
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I'm curious how people on here feel about budgets. Do you keep a budget for everything in general or do you break it down to specific categories like food, travel, hobbies, etc? Does anyone use a budget not for cutting back on spending, but to know when to pull the trigger on desired items? For example, "I'm $1,000 under budget this month so I can buy that new computer I've been wanting"

If you don't keep a budget, do you LBYM and simply try to minimize all expenses?
On occasion in the past I've done a line item budget, but the past few years I just make a few monthly entries in a spreadsheet to track how much we've spent (cc bills, plus outgoings from bank statement).

We try to minimize expenses to LBYM and save towards items we want to buy such as vacations, a car etc. (always had a car savings account and treat it as if we were paying a car note by auto-transferring money every month, and paying maintenance costs out of it, and then using it to replace the car when the mood takes us)
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Old 09-04-2009, 01:21 PM   #22
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We don't keep a budget per se, but we track expenses in MS Money. The categories CreditCard, the 5 or 6 online-bill-pay utilities and once-a-year things that we write checks for like property taxes. Almost all expenses go through CreditCard which is rather nebulous. We have gotten away from spending any cash because that's a non-trackable black-hole.

If the CreditCard bill is higher than the previous month, I look to see why. Usually it's something like auto_insurance or vacation_condo that makes it larger, so I don't give it a second thought.

We've never had to explicitly cut back on expenses such as fuel, groceries, eating out, so we just don't worry about it. MSMoney says we spent $14K less in the past 12 months than we did the 12 months before that. I'm not going to figure out why, but I think it's mostly from not eating out as much. There is usually an annual "What were your expenses" poll on this forum which is sometimes interesting.
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Old 09-04-2009, 01:26 PM   #23
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Never have. I naturally underspend. While I was working, I saved most of the excess. Now, I allow travel / entertainment spending to increase when non-IRA money piles up.
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Old 09-04-2009, 01:33 PM   #24
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My budgeting can be summed up in four words. RECEIVE BILLS-PAY BILLS.
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Old 09-04-2009, 01:43 PM   #25
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We don't keep a budget, though my wife keeps track of all expenses and bills to ensure accurate billing and no fraudulent charges. Years ago, I tried to set up MS Money to automate the accounting process, but found it a bit cumbersome after Windoz kept crashing on me due to other unrelated problems. So, my wife just set up her own Excel spreadsheet.

While she keeps records of the outflow, I spend my time tracking our investment portfolio, which is spread out over several accounts: 401Ks, IRAs, Roths, ERISAs, after-tax brokerages, money markets, I-bonds, etc... I use MS Money to give me the daily total amount on the bottom line.

We try to keep our basic expenses low, and will splurge on travels or toys during good years. So, the big discretionary expenses are decided based on the portfolio return.
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Old 09-04-2009, 02:27 PM   #26
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I find that a budget, or what I consider a "budget", to be to constraining.

I review our monthly expenses (mostly CC) and, if they spike up, I check it out to find out why. This seldom happens as I keep a pretty good handle on what is spent throughout the month and DW is not a spendthrift who creates surprises.

I guess you could say that this is a kind-of LBYM budget process.
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Old 09-04-2009, 03:09 PM   #27
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In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.
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Old 09-04-2009, 03:30 PM   #28
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I did not have a budget when I was single... spent lightly on what I wanted and saved the rest...

Now married... and the wife is a 'live now' kind of gal since she lost her first husband to cancer in his early 40s... so it is hard for me to get her to 'rein in' the spending without a budget... however, she ignores the whole thing, so I am not sure what I will do in the future...

Right now I just keep track of spending vs budget and when she says 'we need this' I can pull out the budget and say we have already spent the next three years budget on that item... she gets mad and spends her own money at times...
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Old 09-04-2009, 03:41 PM   #29
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In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.
I have an informal one in my head. I was an accountant for most of my working life, but never kept a written personal budget.
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Old 09-04-2009, 05:08 PM   #30
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I was an accountant for most of my working life
Ahaaa, now we know how you became acquainted with "meds".
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Old 09-04-2009, 06:03 PM   #31
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I managed the budget process at work for many years - and learned a lot in the process. I was never able to replicate that success at home, however. Now I just track our expenses.

The more categories I try to track, the less motivated I am to update on a regular basis. Now I update once a quarter, just to make sure we are on track and have enough in the bank to get us through the year.
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Old 09-04-2009, 06:04 PM   #32
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In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.
Can't argue there BD. From time to time DW will advise me about a purchase that she is thinking about making and I generally say "Yea it sounds nice honey, but it's just not in this year's budget."

She never asks to see this non-existent budget that I have referred to and will generally make the purchase anyway.
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Old 09-04-2009, 06:19 PM   #33
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I took a PT job to help a bit.

Is this the announcement? Or did I miss an earlier post?
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Old 09-04-2009, 06:31 PM   #34
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I don't keep a budget. Perhaps I should. I do look at expense on annual basis, but I don't say gee I thought I was going to spend $X and actually spent $X+20%.

For those of you who do keep a budget, what are the benefits?
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Old 09-04-2009, 06:45 PM   #35
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For those of you who do keep a budget, what are the benefits?
It ensures me I'm spending every penny I can each year.
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Old 09-04-2009, 07:26 PM   #36
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No formal budget here. I know what my expenses are and keep enough in ready cash to pay the bills and also for the occasional big ticket item(like a trip or a major car repair). It has worked so far. I put most day to day items on my cc so I get a list every month in the form of a statement.
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Old 09-04-2009, 07:42 PM   #37
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For those of you who do keep a budget, what are the benefits?
For me, I think the biggest thing is peace of mind....

I started keeping expense spreadsheets about four years ago. It really opened our eyes to where our money was going. DH just retired six months ago, so it helps to keep the budget plan because neither one of us is the "bad guy". We just look at our budget and see if we can afford something. If the money is not in the budget, we decide whether or not an item/expense is really that important. Most times it is not.

My yearly budget amount does not include my "fluff" fund.
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Old 09-04-2009, 10:43 PM   #38
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I track all my income & outgo on Quicken. Income is ~$2000/mo. Basic expenses ~$1000/mo. Near the end of the month anything leftover goes to MMA or to wild spending or to giving it away.
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Old 09-04-2009, 11:04 PM   #39
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We budget based on our average monthly income minus regular monthly bills (most paid by auto bill pay from checking), minus a monthly contribution to several variable expense categories such as "Travel", "Gifts" and a few others. The remaining amount is deducted from our paychecks and deposited in retirement accounts and savings.

We keep track of the virtual balances in our variable expense categories. If, for example, we have a fairly expensive trip planned for a winter getaway to Arizona in February, we anticipate the cost to make sure the account balance for "Travel" will be adequate at that time. That could mean a short budget vacation in November or even no vacation at all. It works well for us. We know that our savings and investment goals are being met automatically and the rest is for fun and for sharing.
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Old 09-04-2009, 11:17 PM   #40
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In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.
I found myself with the majority here who say they do not have a strict budget because they typically underspend. The whole idea is to be LBYM with a significant margin so that one never has to count the last dollar.

Well, the above has always been true in my life until recently, when my part-time work is drying up, the market tanks, and my kids' college tuition hurt like the Dickens. Suddenly, for the first time in my life, I have to watch the 4% SWR mark. We will be in good shape when the kids are done with school, but until then we cannot indulge in travels like we did in recent years. So, yes we do have a budget, but it is loosely defined.
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