Simple budgeting

[nun]

Ever since I paid off my mortgage I've been tracking my spending using an expenses app called "Spend" on my iPhone. I know how much I spend and that food is my biggest expense (that's a place to economize to grow my wallet and shrink my tummy). But I now have a 3 item monthly budget with 2 fixed costs

Health Insurance - $350
House tax and Insurance - $550
Everything else - $1500

EASY!

 

[W2R]

Ever since I paid off my mortgage I've been tracking my spending using an expenses app called "Spend" on my iPhone. I know how much I spend and that food is my biggest expense (that's a place to economize to grow my wallet and shrink my tummy). But I now have a 3 item monthly budget with 2 fixed costs

Health Insurance - $350
House tax and Insurance - $550
Everything else - $1500

EASY!

I am using the free version of Spend ("Spend Light") on my iPhone to record any cash spending until I can get back to my computer. As antiquated as it probably sounds, I like to manually transfer records of these and other spending to Excel when I am at home.

But anyway, "Spend Light" works beautifully for me to record my cash spending during the day. In the evenings I transfer each of the day's transactions to Excel one by one, and delete from "Spend Light".

"Everything else"? Now there's a broad category.

 

[nun]

"Everything else"? Now there's a broad category.

It sure is, but with the data I have in "Spend" I know that $1500/month is a good number for that broad category. I also know exactly where I can economize within that category if required.

 

[Independent]

I just grab receipts and stick them in my wallet. Ultimately, they will go into the "cash" account in Quicken.

 

[pb4uski]

I put just about everything ($20 and over) on a credit card which effortlessly imports into Quicken and for stores/vendors who I regularly use are already categorized to an expense category. A quick review and I am all set.

The cash I spend just goes to "Spending money" when I take it out of the ATM. Spending money is only about 4% of my annual expenses. Life is too short to track every nickel.

 

[easysurfer]

For me it's receipts to budget categories of software program on computer as soon as I get the chance.

 

[Ronstar]

Ever since I paid off my mortgage I've been tracking my spending using an expenses app called "Spend" on my iPhone. I know how much I spend and that food is my biggest expense (that's a place to economize to grow my wallet and shrink my tummy). But I now have a 3 item monthly budget with 2 fixed costs

Health Insurance - $350
House tax and Insurance - $550
Everything else - $1500

EASY!

Thanks for posting this. I just loaded the "spend" app this morning, punched in 7 categories, and so far I'm under budget. I need to reduce the no of categories like you did. It's a lot easier to keep up when there are only a few categories.

 

[Midpack]

As long as DW & I have been married, every single expense has gone into our check register, mostly credit card charges (we rarely use actual cash for anything). We did it so we'd always know our real balance, and not be surpised with a credit card monthly statement. At the end of the month, we wrote a check, but all the expenses had already been deducted from the register.

Our budget spreadsheet starts with entering every entry from our check register (identical format), assigning categories using drop-down menus, and then pivot tables to summarize (totals, variances, etc).

We still do so to this day, although after reading this thread - since we write almost no checks any more, maybe it's time we moved on to some other method...hmmmmmm.

 

[pb4uski]

As long as DW & I have been married, every single expense has gone into our check register, mostly credit card charges (we rarely use actual cash for anything). We did it so we'd always know our real balance, and not be surpised with a credit card monthly statement. At the end of the month, we wrote a check, but all the expenses had already been deducted from the register.

Our budget spreadsheet starts with entering every entry from our check register (identical format), assigning categories using drop-down menus, and then pivot tables to summarize (totals, variances, etc).

We still do so to this day, although after reading this thread - since we write almost no checks any more, maybe it's time we moved on to some other method...hmmmmmm.

If most of your transactions are credit card charges, Quicken with automatic import transactions from your credit card companies will save you a boatload of input time in the long run. While I have the non-expense side of a credit card charge increase a liability to the credit card company, there is no reason you couldn't set it up to have it reduce your check register if you want. You can put your budget in Quicken as well and then run/design reports to your heart's content. well worth $70 every 2-3 years IMHO.

 

[Midpack]

If most of your transactions are credit card charges, Quicken with automatic import transactions from your credit card companies will save you a boatload of input time in the long run. While I have the non-expense side of a credit card charge increase a liability to the credit card company, there is no reason you couldn't set it up to have it reduce your check register if you want. You can put your budget in Quicken as well and then run/design reports to your heart's content. well worth $70 every 2-3 years IMHO.

It's been a while, but I've bought and tried to use Quicken twice in my adult life. It was never worth the effort, though my last try was before importing transactions became more readily available (there's still some percentage we'd have to enter manually, automatic payments, a few checks, ATM, etc.). May be time to try again...thanks. Our accountant (DW) would appreciate it!

 

[pb4uski]

It's been a while, but I've bought and tried to use Quicken twice in my adult life. It was never worth the effort, though my last try was before importing transactions became more readily available (there's still some percentage we'd have to enter manually, automatic payments, a few checks, ATM, etc.). May be time to try again...thanks. Our accountant (DW) would appreciate it!

You can also import transactions from your bank or credit union which will cover autopays, ATM transactions, etc. Now that i have things set up I have very little manual input and I'm lazy so that is good.

 

[Midpack]

You can also import transactions from your bank or credit union which will cover autopays, ATM transactions, etc. Now that i have things set up I have very little manual input and I'm lazy so that is good.

It does sound good, two questions if you don't mind?

1. What comes across with the transaction downloads besides the $ amount and presumably date. I assume you have to manually enter the budget categories (home, car, etc.) for each, if not the supplier (Jiffy Lube, Chili's, etc.)?
2. How do you keep track of the expenses that you can't download automatically? (Though I guess that might only be actual hard cash transactions, which we don't split out now...)

DW spends about an hour a month making entries in our homegrown spreadsheet, I am sure she'd like to spend less time.

 

[pb4uski]

It does sound good, two questions if you don't mind?

1. What comes across with the transaction downloads besides the $ amount and presumably date. I assume you have to manually enter the budget categories (home, car, etc.) for each, if not the supplier (Jiffy Lube, Chili's, etc.)?
2. How do you keep track of the expenses that you can't download automatically? (Though I guess that might only be actual hard cash transactions, which we don't split out now...)

DW spends about an hour a month making entries in our homegrown spreadsheet, I am sure she'd like to spend less time.

Usually what comes across is the date, supplier/location and amount. You will need to categorize each charge BUT Quicken memorizes the categorization. So for example, I have a half a dozen area gas stations that DW and I normally buy gas at and since Quicken knows them now, when they come in the charge automatically goes to the Autos:Fuel category. Ditto for grocery stores, autopays, etc. So once you have done it for a while, the vast majority of transactions are automatically categorized. I just do a quick review of the categorization when I accept the transactions.

I generally don't bother to categorize cash transactions - any withdrawals go to a "Spending Money" category unless I made the withdrawal for a specific purchase, in which case I override Spending Money with the ore appropriate category for that purchase. This Spending Money catch-all is about 5% of my annual living expenses, but one could be more precise about cash spending if one wanted to.

 

[nun]

Thanks for posting this. I just loaded the "spend" app this morning, punched in 7 categories, and so far I'm under budget. I need to reduce the no of categories like you did. It's a lot easier to keep up when there are only a few categories.

I have a fair few categories in Spend so I can see where the money is going, but my main goal is to have the monthly total be under $1500. Ever since BofA tried to charge to use their debit card I've been paying for stuff with cash. It's psychologically different from using a card and after a few months it looks like I'm spending less. Now I just have to keep that lower spending and use a credit card so I can get 1% back

 

[W2R]

Thanks for posting this. I just loaded the "spend" app this morning, punched in 7 categories, and so far I'm under budget. I need to reduce the no of categories like you did. It's a lot easier to keep up when there are only a few categories.

Thanks for the idea! I just reduced my categories on "Spend" to only four. You're right, Ronstar - - that does make it easier. Since I categorize anyway when manually copying to my Excel file, the only reason I have for categories is to be able to find a given expense more quickly at the end of the day (if I have several cash expenses that day).

Like nun, I need a lot of categories to see where my money is going to but I take care of that in Excel. If I pay my lawn guy and enter that into Spend, I will now categorize it as "other" and under comments enter "lawn". Then when I transfer it to Excel, it will be under category House, sub-category Maintenance, sub-sub-Category Lawn Mowing.

I really like the fact that the free version of Spend does not download from your bank, Vanguard, or cards because I didn't want to give out any of that information. I just wanted an easy, enjoyable format in which to record daily cash spending and the free version of Spend provides exactly that (and not much else) to me.

 

[Mulligan]

I tried with good intentions to use mint and set everything up in it. But even then it was a PIA to convert transactions and such. My expenses are usually consistent every month anyways. I just set up 3 rules I follow instead. My monthly investments and savings come out off the top each month. I cant overspend my monthly income, and CC's must be paid off in full each month.

 

[Danmar]

interesting thread. We have been using the same methodology for about 20 years(imputting credit card charges into a spreadsheet by hand, categorizing all cash transactions as "cash", and putting any cheques or internet charges in by hand). Feel like a dinosaur, but it works. Maybe 40-50 expense categories and 4-5 income categories. I balance each month by taking opening cash balance adding income, deducting expenses to get ending cash balance. Other adjustments for investment activity. Track our financial net worth( no real estate) on the same spreadsheet. We are both accountants so we love this kind of stuff.

 

[W2R]

interesting thread. We have been using the same methodology for about 20 years(imputting credit card charges into a spreadsheet by hand, categorizing all cash transactions as "cash", and putting any cheques or internet charges in by hand). Feel like a dinosaur, but it works. Maybe 40-50 expense categories and 4-5 income categories. I balance each month by taking opening cash balance adding income, deducting expenses to get ending cash balance. Other adjustments for investment activity. Track our financial net worth( no real estate) on the same spreadsheet. We are both accountants so we love this kind of stuff.

Danmar, I don't think you are a dinosaur at all! Your method is pretty much what I have been doing as well. I like putting information into my spreadsheet by hand, because I get a better sense of where the money is going than I might if this was automated.

For 2012, I wanted to find out where all my cash (to the penny) was going in those cash transactions, just for fun, and this new iPhone app is helping me to keep track of that. The older i get, the harder it is to remember without some reminder.

 

[audreyh1]

I put just about everything ($20 and over) on a credit card which effortlessly imports into Quicken and for stores/vendors who I regularly use are already categorized to an expense category. A quick review and I am all set.

The cash I spend just goes to "Spending money" when I take it out of the ATM. Spending money is only about 4% of my annual expenses. Life is too short to track every nickel.

Same here - credit card and download transactions into Quicken where it gets assigned to a budget category - usually automatic.

Except that "cash" is only 2% of our base expenses, and if I pay cash for something large - like to pay a workman or buy a piece of art - then that amount gets asigned to the proper category.

ALL my transactions are downloaded into Quicken from the appropriate institution - checks, electronic bill pays, ATM withdrawals, credit card charges, fund transfers. I only enter something manually if I don't want to wait for the check to clear and it hadn't already been scheduled.

Any regularly occurring check, bill pay, credit card charge or transfer is set up in the "scheduled transactions" part of Quicken and I am prompted when it is due, and it then is added to the appropriate register.

Audrey

 

[Danmar]

Cash expense category is about 5% of our total spend. We could track it more closely but it has been remarkably consistant over the years. Any large cash amounts I back out of "cash" and put in the right category. We include groceries, liquor, taxies, cleaning ladies, and anything we pay cash for in this category.

 

[veremchuka]

I don't have a budget, never did before FIRE either. If I need to buy something I just do. 99% of purchases are by credit card, I write a few checks maybe 4 a month. I seldom use cash other than where I can't use a credit card or check like buying corn at the farm stands for example. In early January I sit down with my check register and group everything into categories because I document the credit card purchases in the check register so everything is there. It works for me. My WR is typically zero and I'm saving a good chunk of my pension each month. I'll need a roof in 4 years or so and it's going to be a big expense!

Maybe a budget isn't required since I am and always was very disciplined when it came to spending money. I have no qualms buying something if I need it regardless of cost but I really don't need anything at this point so purchases aren't a big deal. Also being single helps, when I was married it was tough with a spouse that had less than zero control with money, it's why I'm divorced.

 

[Ronstar]

Thanks for the idea! I just reduced my categories on "Spend" to only four. You're right, Ronstar - - that does make it easier. Since I categorize anyway when manually copying to my Excel file, the only reason I have for categories is to be able to find a given expense more quickly at the end of the day (if I have several cash expenses that day).

Like nun, I need a lot of categories to see where my money is going to but I take care of that in Excel. If I pay my lawn guy and enter that into Spend, I will now categorize it as "other" and under comments enter "lawn". Then when I transfer it to Excel, it will be under category House, sub-category Maintenance, sub-sub-Category Lawn Mowing.

I really like the fact that the free version of Spend does not download from your bank, Vanguard, or cards because I didn't want to give out any of that information. I just wanted an easy, enjoyable format in which to record daily cash spending and the free version of Spend provides exactly that (and not much else) to me.

I really only need it for daily cash spending also. Checking and credit card stuff is easier to handle by downloading from the banks, so I won't do these in spend. So when I go "live" with my new budgeting system on March 1st, I'll only have one category in spend - cash. Then I'll do data transfers from spend, credit card, and checking to excel. I think I'll get more out of an excel system than my old Quicken setup.

 

[misty57]

As long as DW & I have been married, every single expense has gone into our check register, mostly credit card charges (we rarely use actual cash for anything). We did it so we'd always know our real balance, and not be surpised with a credit card monthly statement. At the end of the month, we wrote a check, but all the expenses had already been deducted from the register.

WOW!! That's EXACTLY what we did as insurance that we wouldn't overspend and end up having to pull money from savings to pay off the CC bill.

 

[Walt34]

interesting thread. We have been using the same methodology for about 20 years(imputting credit card charges into a spreadsheet by hand, categorizing all cash transactions as "cash", and putting any cheques or internet charges in by hand). Feel like a dinosaur, but it works.

That's basically what we do too. DW wrote the spreadsheet - she's much better at that stuff and more organized than I am - so we have that to keep track of all outstanding cc charges so there are no surprises when the bills arrive. The spreadsheet deducts the outstanding charges from the discretionary spending amount.

Credit cards are used primarily for any online shopping and largish items that we don't pay cash for. Groceries I write a check for, incidentals we use cash. Every once in a while we'll track every penny of spending for a month or so just to see if we've developed any bad habits but don't track cash spending closely. But there is a set amount for cash spending and when that's gone cash spending stops.

Archaic perhaps, but it works for us.

 

[sailor]

It's been a while, but I've bought and tried to use Quicken twice in my adult life. It was never worth the effort, though my last try was before importing transactions became more readily available (there's still some percentage we'd have to enter manually, automatic payments, a few checks, ATM, etc.). May be time to try again...thanks. Our accountant (DW) would appreciate it!

If I did not have multiple years worth of data in Quicken, including business data, I would have not used it today. A lot of hassle and bugs.
I recommend https://www.mint.com/ to all my family and friends looking for budgeting software.