Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
I need a budget...
Old 11-22-2005, 03:29 PM   #1
Recycles dryer sheets
 
Join Date: Aug 2004
Posts: 85
I need a budget...

Hello all.

For my working life I have been good at saving money, investing it, etc. In addition, my spending habits are very much under control. My biggest expense that I should/could control is eating out too much. But I am 28 and single and I don't like cooking for myself.

Anyways, I think trying to go to a budget and stick to it cold turkey is a pretty hard thing to do. I am self-employed (in case you guys forgot) and basically my finances go like this:

A. work
B. collect payments
C. stock-pile cash
D. end of the month - pay off bills, debts, tax payments, etc.
E. repeat

Any suggestions would be appreciated.
__________________

__________________
LRAO is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: I need a budget...
Old 11-22-2005, 04:08 PM   #2
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: I need a budget...

Quote:
Originally Posted by LRAO
...my spending habits are very much under control.* My biggest expense that I should/could control is eating out too much.* But I am 28 and single and I don't like cooking for myself.
...Any suggestions would be appreciated.
Regarding your food problem, one option is to get married.

However, you will have to give up half your food to get your half cooked.
__________________

__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 05:28 PM   #3
 
Posts: n/a
Re: I need a budget...

A budget need not restrict. It just helps you know where you are spending your money.

Your first step should be to account for every buck spent in a month. Do this for 6 months and the results will probably surprise you. I use QUicken and categorize everything. When you see what you spending out for food you then can decide if it's worth it or you want to make some changes. If not, that's your budget! 8)
__________________
  Reply With Quote
Re: I need a budget...
Old 11-22-2005, 06:31 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: I need a budget...

Quote:
Originally Posted by LRAO
Hello all.

For my working life I have been good at saving money, investing it, etc.* In addition, my spending habits are very much under control.* My biggest expense that I should/could control is eating out too much.* But I am 28 and single and I don't like cooking for myself.

Anyways, I think trying to go to a budget and stick to it cold turkey is a pretty hard thing to do.* I am self-employed (in case you guys forgot) and basically my finances go like this:

A.* work
B.* collect payments
C.* stock-pile cash
D.* end of the month - pay off bills, debts, tax payments, etc.
E.* repeat

Any suggestions would be appreciated.
Learn to cook. I did it. You can too!

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 07:27 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: I need a budget...

Quote:
Originally Posted by davew894
I would suggest you learn how to fix things yourself.* It helps you pay 'cost' for things, helps to minimize the impact of inflation and you'll learn all kinds of new things.* I'm still working, but in order to maximize savings, I've learned to do things myself instead of 'buying my way out of problems.'* Some things I have learned in the past year:
-* Changing house siding
-* Repairing roof shingles
-* Repairing private well system
-* re-piping A/C condensation line
-* painting (painted entire house)
-* fixing car A/C (surprisingly easy with stuff at Advance Auto Parts)
-* back feeding generator to house (I live in hurricane prone Florida)
-* chainsawing large trees (see hurricane comment above :P)
-* building a fence

Having this stuff done probably saved me $10k this past year.* For the upcoming year, I'm planning on re-siding my chimney, re-roofing two sheds and growing vegetables (I've allocated about 1/4 acre for this, which should be enough to support my family's vegetables consumption for the year ).* I'm sure the list will get longer.

Anyway, I think learning to enjoy cooking would be a great first step.* Boil some water, throw in some pasta and microwave some Prego spaghetti sauce, then mix the strained pasta with the sauce and you're on your way.* From there, you can learn other things.* Try http://www.allreceipes.com.* I've learned to make my own pasta from scratch, my own croutons, garlic bread and lots of other yummy foods.* I used to have trouble boiling water... but like everything else, I've learned along the way.

If you want to be truly financially independent, you need to learn how to solve your own problems and not pay someone else for the service.
I think this is good advice, but I don't follow it. Instead, I hire
more and more out all the time. Very fussy, very unhandy,
and I resent all intrusions on my freedom to come and go.
Even if I could do it, I usually don't. I would rather pay someone
and be done with it.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 07:32 PM   #6
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,619
Re: I need a budget...

Quote:
Originally Posted by LRAO
Anyways, I think trying to go to a budget and stick to it cold turkey is a pretty hard thing to do.
Quote:
Originally Posted by Cut-Throat
Your first step should be to account for every buck spent in a month. Do this for 6 months and the results will probably surprise you. I use QUicken and categorize everything. When you see what you spending out for food you then can decide if it's worth it or you want to make some changes. If not, that's your budget! 8)
That's the conventional wisdom and it's worked for our family since 1987. *But it's not for everyone.

I recently read about another approach in the book "All Your Worth" by the Warrens. *They say that a lot of people resent budgeting & tracking their spending and so the process is fatally sabotaged. *The Warrens recommend splitting everything into large categories of "Needs" and "Wants". *Keep the "Needs" (mortgage, food, transportation) under 50%, make sure that savings is another 20%, and blow the rest. *There's another 304 pages of details & interesting stories-- the book is a good read-- but that's about all there is to this plan.

There's a shorter version of this in Richard Jenkins' article where he suggests keeping the mandatory spending (mortgage, food, transportation) under 60%. *Save 10% in tax-sheltered accounts, save another 10% in taxable investments, save a third 10% for emergencies & large purchases (unexpected car repair, a new roof, a replacement vehicle, a new appliance) and go woo-hoo crazy with the final 10%. *After the first 60% you stop tracking your spending and just track your savings. *Whatever's left over is yours to splurge.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 07:37 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: I need a budget...

What I would like to know is how many of you do what we do.
We have no formal budget at all and just "wing it"
on the basis that (A) you will know when you are getting
in trouble, or (B) you can easily "fix" it if you go overboard??

Don't get me wrong............I think a budget is great.
Too lazy to bother with it.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 07:40 PM   #8
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,619
Re: I need a budget...

Quote:
Originally Posted by MRGALT2U
What I would like to know is how many of you do what we do.
JG, I don't think it's hyperbole to state that whatever it is that you do in your ER is truly unique.

At least I hope that it is.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 07:43 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: I need a budget...

Quote:
Originally Posted by Nords
JG, I don't think it's hyperbole to state that whatever it is that you do in your ER is truly unique.*

At least I hope that it is.
I think that you are most likely correct.

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 08:12 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Re: I need a budget...

Quote:
Originally Posted by MRGALT2U
What I would like to know is how many of you do what we do.
We have no formal budget at all and just "wing it"
on the basis that (A) you will know when you are getting
in trouble, or (B) you can easily "fix" it if you go overboard??

Don't get me wrong............I think a budget is great.
Too lazy to bother with it.

JG
I'm not retired but JG's approach has always worked for me. You kind of know month to month, or even week to week, whether you're spending more than you've got coming in and you make adjustments along the way. This worked for me when I was a college student and broke just as well as now when I'm not.

I think I'll want to plan it out a bit better before I retire, though.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 08:18 PM   #11
 
Posts: n/a
Re: I need a budget...

Quote:
Originally Posted by MRGALT2U
Don't get me wrong............I think a budget is great.
Too lazy to bother with it.

JG
Actually once you get things 'set up' in Quicken it's pretty much on autopilot. - Transactions are downloaded and categorized automatically.

It's nice knowing where the $$$ money goes.
__________________
  Reply With Quote
Re: I need a budget...
Old 11-22-2005, 08:33 PM   #12
Full time employment: Posting here.
 
Join Date: Feb 2004
Location: Okanagan Valley
Posts: 805
Re: I need a budget...

Simply suggesting "winging it" to someone looking for help on a budget is a bit irresponsible to say the least.

Keeping track of current spending in Quicken (or a spreadsheet for that matter) for 6 months is a good way to see your current spending pattern without artifically constraining yourself to canned budget plans. Then you can examine and decide where, if anywhere, you want to exert some discipline to cut back. Another suggestion for success is to probably cut back a bit at a time, rather than going 'cold turkey' if you wish to make significant cutbacks.

You may find, after a year of having to monitor yourself, that you will get in the habit of behaving in new ways that won't require constant monitoring (which is a PITA).
__________________
AltaRed is offline   Reply With Quote
Re: I need a budget...
Old 11-22-2005, 08:49 PM   #13
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: I need a budget...

Another approach is to figure out how much you need to save monthly to get to your FI goal and pay yourself first, then spend up to whatever is left over.

It doesn't hurt to pad those savings a little for those "unexpected" expenses that come out of the blue (like a root canal) as well as those repeating infrequent "expected" expenses (like car and home repairs).
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: I need a budget...
Old 11-23-2005, 01:39 AM   #14
Full time employment: Posting here.
TargaDave's Avatar
 
Join Date: Jul 2005
Posts: 588
Re: I need a budget...

Quote:
Originally Posted by retire@40
Another approach is to figure out how much you need to save monthly to get to your FI goal and pay yourself first, then spend up to whatever is left over.
That's been more our approach. We know what we're saving and what goes to taxes. The rest is expenses. Our taxes are higher than our expenses (Lovin that AMT :P ). Once we're not working so much we'll track spending more closely. BTW, my one "latte" expense is buying lunch all the time. I live with 3 girls who eat like birds, so that makes up for it.

__________________
TargaDave is offline   Reply With Quote
Re: I need a budget...
Old 11-23-2005, 04:52 AM   #15
Thinks s/he gets paid by the post
BUM's Avatar
 
Join Date: Feb 2004
Location: Mid Hudson Valley
Posts: 1,778
Re: I need a budget...

Quote:
Originally Posted by MRGALT2U
Instead, I hire more and more out all the time. Very fussy, very unhandy,
and I resent all intrusions on my freedom to come and go.
Even if I could do it, I usually don't. I would rather pay someone
and be done with it.

JG
Hey, wait a minute? Are you my brother?!?!?!?!?!
__________________
In a panamax down by the river.
BUM is offline   Reply With Quote
Re: I need a budget...
Old 11-23-2005, 05:11 AM   #16
 
Posts: n/a
Re: I need a budget...

We sorta wing it too. Keeping an eye on the checkbook balance gives an early warning if too much spending is going on. If too much accumulates in the checking account, it goes into longer-term investments (along with planned contributions). I know that not everybody likes to keep the checkbook balance up to date, but it helps us.
__________________
  Reply With Quote
Re: I need a budget...
Old 11-23-2005, 08:01 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Dec 2002
Posts: 3,875
Re: I need a budget...

Quote:
Originally Posted by AltaRed
Simply suggesting "winging it" to someone looking for help on a budget is a bit irresponsible to say the least.*

Keeping track of current spending in Quicken (or a spreadsheet for that matter) for 6 months is a good way to see your current spending pattern without artifically constraining yourself to canned budget plans.* Then you can examine and decide where, if anywhere, you want to exert some discipline to cut back.* Another suggestion for success is to probably cut back a bit at a time, rather than going 'cold turkey' if you wish to make significant cutbacks.* *

You may find, after a year of having to monitor yourself, that you will get in the habit of behaving in new ways that won't require constant monitoring (which is a PITA).
In case the "irresponsible" tag was aimed at me, I am just reporting what we do. Budgets are great, but a real PITA at times. I don't want
to spend the time. So far it's workin'. Others can draw their own conclusions. "Wingin' it" may not work for us after DW retires (date unknown).

JG
__________________
MRGALT2U is offline   Reply With Quote
Re: I need a budget...
Old 11-23-2005, 08:10 AM   #18
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Re: I need a budget...

Budgets are pretty personal. Some people like to plan and don't mind budgeting each month. A budget, to me, puts everything in perspective in terms of how much I need to save or how close I am to certain goals.

I would encourage the OP to at least run a budget on Excel for 1 year to track expenditures. Could be a real eye opener. If you decide you like it then either keep it up or invest in some personal finance software.
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Re: I need a budget...
Old 11-23-2005, 08:40 AM   #19
Recycles dryer sheets
 
Join Date: Jun 2002
Posts: 374
Re: I need a budget...

I think your best bet is to become obsessed about your lipid profile, read a few books by guys like Dean Ornish, then find yourself some message boards dealing with nutrition.

If you're like me, you'll quickly come to distrust anything prepared in any restaurant (I think they use real butter sometimes, or even, God forbid, margarine).

Then you'll subsist soley on real-deal Quaker Oats, Eggbeaters, low-sodium V-8 juice, fat free milk and cottage cheese, frozen 3-berry mix, your better grades of sliced turkey breast, 100% whole wheat bread, and bananas.

Bon appetit!

Cb
PS: you can still use regular peanut butter though, I checked it out.
__________________
Cb is online now   Reply With Quote
Re: I need a budget...
Old 11-23-2005, 08:42 AM   #20
Thinks s/he gets paid by the post
BigMoneyJim's Avatar
 
Join Date: Feb 2003
Location: DFW
Posts: 2,627
Re: I need a budget...

I can't stand tracking everything for more than a week or so. What I did instead is look at my credit card and ATM card usage for several months to get an idea of what I spend in an average month. The regular bills are easy enough to put in the budget. The results are laid out in a spreadsheet. I know I can control the ATM/CC spending by eating cheaper and otherwise limiting discretionary spending. So I'm sorta winging the wallet part of the budget, but saving and recurring expenses are budgeted, and savings usually gets boosted with raises.

This fails to include things like vacations, car replacement and clothes shopping--I shop so seldom that this didn't make it into my monthly average--but between bonuses, adjusting wallet outflow and figuring some expenses into savings I cover these items.

That said, I'm probably going to bust my budget next paycheck. I spent a lot on airfare for the holidays, spent a couple hundred on computer chairs and need to get my car worked on. I saw this coming but chose not to adjust discretionary spending for various reasons. I'll be back on budget in mid December or in January.

(BTW, the CC is paid off monthly. I haven't paid interest of any sort since about July 2004.)
__________________

__________________
BigMoneyJim is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Living on a budget and the MISCELLANEOUS COLUMN modhatter Life after FIRE 11 04-11-2007 07:29 PM
Optimism for Planning Your Personal Budget wog777 FIRE and Money 0 01-23-2007 01:41 PM
2007 Budget dex FIRE and Money 3 12-15-2006 07:58 PM
Insurance as a % of Retirement Budget REWahoo FIRE and Money 14 08-04-2005 10:46 PM
Tear appart my est. for retirement budget dex FIRE and Money 7 11-01-2003 02:22 PM

 

 
All times are GMT -6. The time now is 08:59 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.