Do you have a family financial budget?

[old woman]

I don't have anyone to share their money with me so only have my budget.
I work on mine on a annual basis and don't budget tightly on little things. I pay the mortgage, insurances, taxes, utilities and anything like that when they happen but plan ahead for the rabbit in the python times like property taxes twice a year to make sure I have funds. For the little things like gas, food and misc spending I use cash I get from my roommate weekly and deposit any extra into the bank.
I am a natural LSBYM kinda women so don't need to track what I spend on shoes, I know it was $84. because I remember.

 

[In-control]

We have a yearly family budget. I used to use quicken to track our finances but found the it was overkill. I spent more time adding information into the program then actually getting valuable data out. Last year I downloaded a budget template off of Fidelities web page. Simple spreadsheet with rolling totals and summary's. We set the budget based on 2006's spend estimates + 3% inflation.

Each month my SO and I review the numbers to look for area's of improvement. We have a blank budget sheet for each month and as we spend we write the $ into the block in for the catagory. At the end of each month I add that months spend to the spreadsheet. I put special notes on catagories for the next month to show where we ran over the month before.

This may sound like alot of work but it takes minimal time and gives us the inforamtion that we need to make decisions.

I would say that the hardest part of budgeting is the decipline - going from a make and spend mentality to make - hold/save - spend is very different. My SO hates it because she used to be able to spend and not really care. Now she's on an agreed budget.

Having 5 people to feed is our biggest challenge averaging $150-$160/per person/month. Now we are cutting coupons and driving to multiple places for the deals. Our goal is to get that to $140 - very achievable and I have been amazed how much $ were saving with coupons.

 

[lazygood4nothinbum]

no budget. before quitting i looked at my yearly expenses, padded all that, added for tax, home improvements, health insurance (which just went up to $350 from $297/month, having never made a claim, the jerks), etc.

good thing i padded, huh?

all that came in at about the 4% figure. then, when i added future hopeful social security and pension or even future proceeds from house i'll probably sell, i got the figure i could use to include travel.

so if i have a budget it is simply my normal spending plus some. in two years i've yet to spend but a small fraction of the plus some. i don't need to budget; that's too difficult. i just need to continue being cheap & easy.

 

[Siv]

I'm not very sure if my husband would ever agree to specified budget. His principle has been, as long as we don't buy too much or budgeting is not the way to save or get more money what we should do is to increase income.

I have only recently(since we had a baby-5 months) start taking over food deparment in the house. Before, we eat out 90% of the time(again, husband thinks it's too much trouble cooking for 2) and I don't want the hassle of trying to convince him.

Our spending/expenses are in medium range, I think...we turn lights off when not in use that sort of thing...and we're minimalist so not much clutters at home. I actually think by looking around and compare ourselves to others that we're quite a simple couple. We don't own many things and "depriving/delaying" purchase is in my gene

Our income varies. Husband owns his company with international subsidiaries, I work for someone. Although I have fixed salary, it is account for less than half of my other income such as rent, equity, CD, interest from loaning money to relative(oops, this could spark another debate but no worry here, it's a safe return).

 

[Darryl]

Yes, Budget!!!!!!!!!

Easily predictable things that have no emotion attached to purchases are on spreadsheet. Includes mortgage, car replacement fund, cable, phone, car insurance, etc...

Whats left over makes it in to envelopes and we pay with cash groceries, gasoline, haircuts, kid entertainment, restaurant, kid clothes, adult clothes, vacations, home repair etc. etc. etc.... When the envelope is empty you stop spending. Impossible to lose control, takes less than 5 minutes a week to execute and has captured many tens of thousands of previously wasted dollars over the last 2 1/2 years.

 

[In-control]

Yes, Budget!!!!!!!!!

Easily predictable things that have no emotion attached to purchases are on spreadsheet. Includes mortgage, car replacement fund, cable, phone, car insurance, etc...

Whats left over makes it in to envelopes and we pay with cash groceries, gasoline, haircuts, kid entertainment, restaurant, kid clothes, adult clothes, vacations, home repair etc. etc. etc.... When the envelope is empty you stop spending. Impossible to lose control, takes less than 5 minutes a week to execute and has captured many tens of thousands of previously wasted dollars over the last 2 1/2 years.

We do a similar activity but use the credit card - by using it the credit card company and the company that we purchase from provide $ into our kids 529 plan tax free - it can be more the 10% free $ so it is worth it.

We use monopoly $ in an envelope marked discretionary $. Achieving the same goal while maintaining the benefits.

 

[ziggy29]

I keep a "budget" in my financial software as a baseline for what I think we should be spending. Every now and then I'll review it to see where we're exceeding "budget" (for both particular categories and the overall cash flow) and see whether this is an expense we can get down of if my original budget estimates were unrealistic.

We don't do "hard budgeting" in that we stop all spending on category X if the budget for it is gone. I wouldn't want to live that way. But I do track where the money goes to see if there are things we could be doing better in terms of keeping spending under control.

 

[growing_older]

I work with what I think of as a budget backwards.

I have set an automatic payment from each paycheck to various expense categories, phone, insurance, lights, utilities, and a big catch-all for credit card. I shop using the one credit card (groceries, drug store, etc) so all the bills are combined. My paychecks are not monthly, so I let the recipient worry about converting my periodic payments to their monthly billing cycle, instead of the other way around. Whenever I feel like it, I open incoming bills and see if I'm in balance. If all is working, I'll likely have a small credit balance, so I can just discard (file) that bill. If I see credit balances rise, then I can adjust the autopay down. If I see credit balance decline or amount owed, then I know I have to see what's going "over budget" there. But that's pretty rare.

I know I could probably do something similar without running the small credit balances all over town, but really the amounts are small and a price I'm willing to pay for the combination of convenience and a workable system that keeps my spending within preset limits. I know I cannot go wild without upsetting the system, so I tend to stay within plan without having to think about it. Since I'm mostly used to this level of spending, anything above that in the paycheck is automatic candidate for savings.

 

[kaudrey]

I have a savings plan, but not a budget. I set target savings goals each year (which right now is about 30% of my income). Since that all happens automatically (via paycheck or automatic transfers out of checking), I never see that money.

Then, I can spend whatever is left. Every once in a while I will notice that I have thousands of $ in my checking account, and then I just transfer more of it into savings. I use the money in savings for big ticket items - vacations, next car, house repairs etc. The savings account is fluid - but the money that goes to my brokerage account and 401k have never been touched (so I try to get my money into those as often as I can).

 

[Independent]

Maurice, I think a lot of us would love to see a categorical breakdown of that spending. Not to critique your spending, but just to see what a $168k budget looks like.

You and Maurice might be interested in this link. It has the results of the BLS survey on expenditures. Note that their highest category is still below Maurice, but it gives an idea of what's large and small for "average" high income families.

ftp://ftp.bls.gov/pub/special.requests/ce/standard/2006/higherincome.txt

However, I'd agree with the statement that if you're saving more than you're spending, then you don't have spending problems.

 

[twaddle]

ftp://ftp.bls.gov/pub/special.requests/ce/standard/2006/higherincome.txt

Interesting. The more you have, the more you spend in just about every category. Except tobacco.

And who are those 20 people with incomes over $200K collecting food stamps?

 

[Shawn]

My budget is simple. I take out $200 twice a month from the ATM. The first thing I do is deposit $20 into an envelope. The rest of the money is used to make all my purchases at regular stores (e.g., grocery, department, drug, clothing, etc), gas stations, restaurants, and other public or entertainment venues (e.g., movie tickets, videos, park entrance fees, etc). This includes purchases such as medicine at the drug store, but it does not include medical, dental, or veterinary bills. It includes gas, but not major auto repair or insurance.

Using cash in this way causes me to make constant cost-benefit decisions regarding potential purchases. If I want a magazine, I may not be able to get a video. I see how much I have left in my wallet and I know the number of days before my next ATM payday. It's a good strategy, at least for me.

I put left over funds (in $20 increments) into the envelope at the end of the half month period. If I want to purchase something more significant, I need to use the saved funds in the envelope. Hence, I have both a budget and a reason to save. At the end of the year, I deposit most of the saved funds into the bank.

Unfortunately, sometimes I cheat and use my credit card when I shouldn't.

 

[Ronstar]

ftp://ftp.bls.gov/pub/special.requests/ce/standard/2006/higherincome.txt

Does this table indicate that people with incomes of $236k only pay $16k in taxes? If so, my accountant has some explaining to do.

 

[Independent]

Does this table indicate that people with incomes of $236k only pay $16k in taxes? If so, my accountant has some explaining to do.

I'll agree that the FIT numbers look way low. That's true throughout this data, not just for the high incomes. I haven't been able to find an explanation. This generates some uneasiness about the rest of the data, but I think the BLS emphasis here isn't on taxes.

I noticed, also, that social security taxes are included with "Pensions" in one of the last "spending" lines.

 

[sweetana3]

We have bugeted and reviewed our spending for over 20 years. As a result, we can comfortably make retirement decisions based on a huge base of knowledge of actual spending patterns and needs. It is probably our best reason for doing it.

We spend 1/3, pay taxes of 1/3 and save 1/3 and have done for as many years.

 

[packrat44]

Do you have a personal or family financial budget? If so, how strict is it?

Personally, I naturally live below my means, and I have never felt like I wanted or needed a budget. In some ways, I think I'd spend more if I had a budget. If I decide to buy something, I buy it, but only after I'm sure it is something I really want and will use.

Our financial budget is about as strict as Dr Spock was with children - anything goes (if we truly want it). The key thing is our "needs" and "wants" have remained fairly modest. Have never had a budget. See no need to start now that we are both FIREd.

 

[packrat44]

Anyway, I'm fortunate enough to be in a position where they above lifestyle qualifies as living significantly below my means (LSBYM?). My annual net savings amount is more than my annual taxes which is more than my annual expenses - a good LBYM definition I would say.

Maurice, you are definitely on target. It does not matter how much we earn or spend in hard core dollars. It is the ratio of net savings/investing to earnings.

 

[73ss454]

I put a budget in place for DW and I on Jan 1st of this year. The only problem is I'm the only one on it.

 

[REWahoo]

I put a budget in place for DW and I on Jan 1st of this year. The only problem is I'm the only one on it.

Commonly referred to as the "unibudget"...

 

[73ss454]

I have another name for it.

 

[slazenger]

The artificial scarcity method works best for me. I pay my retirement and savings investments the moment I'm paid.

I'm usually 2 weeks or so ahead on bills, so by electronically scheduling a payment and recording it in the checkbook register immediately, but not having the actual transaction scheduled to occur until the due date, it allows us to go negative in our checkbook without actually overdrawing. Naturally, when we see a negative balance, we don't spend money until it goes positive which usually occurs when we get paid.

So, with savings, investment, and bills basically being basically paid immediately, I see no harm in just spending as we please for the remaining balance.

That's my budget in a nutshell.

 

[Alan]

Like myself, most folks replying don't have a strict budget they adhere to. However it got me thinking about when I switch to withdrawal in ER.

I need to start with a nest egg large enough for 4% SWR plus an emergency fund of 3- 6 months expenses (EF) to act as cushion. The 'egg' needs to be kept fire-walled off from the EF and also the funds used to do short term saving for things like new vehicles, vacations etc. (spending varies year to year and a budget by nature is an average of what you expect to spend).

If disaster strikes over a year or 2 such as major repairs to vehicle, house and self (ie Health cost) and I exhaust the EF then to fill the gap I should "borrow" from myself just like you can from a 401(k) before retiring. This loan should have interest charges and be treated in the AA of the 'egg' as bonds as there is a possibily of defaulting.

 

[Independent]

We have bugeted and reviewed our spending for over 20 years. As a result, we can comfortably make retirement decisions based on a huge base of knowledge of actual spending patterns and needs. It is probably our best reason for doing it.

We spend 1/3, pay taxes of 1/3 and save 1/3 and have done for as many years.

Looks like I have a near-twin.

I've recorded, but not budgeted expenses, for many years. Like you, the primary reason is so we can make big decisions. Early Retirement was one of them.

Also, for quite a few years we were in the 1/3 - 1/3 - 1/3 mode. My first third was "taxes and charitable contributions", and my "savings" included the principle payments on the house.

However, when our oldest started college, the savings mostly shifted to tuition.

 

[Delawaredave5]

I've tried to keep a budget, just to 'confirm' where the money goes, but never see it through. Instead I estimate yearly inputs and expenses for various categories based on the previous year and accounting for inflation and major changes. I too have a large miscellaneous allotment which is the part I'd like to get a better handle on now that I'm moving into FIRE.

Above is me - using records as a "see where money went".

Think a lot of people on this board have a natural "sensible spending restraint".

 

[Zoocat]

My budget is simple. I take out $200 twice a month from the ATM. The first thing I do is deposit $20 into an envelope. The rest of the money is used to make all my purchases at regular stores (e.g., grocery, department, drug, clothing, etc), gas stations, restaurants, and other public or entertainment venues (e.g., movie tickets, videos, park entrance fees, etc). This includes purchases such as medicine at the drug store, but it does not include medical, dental, or veterinary bills. It includes gas, but not major auto repair or insurance.

Using cash in this way causes me to make constant cost-benefit decisions regarding potential purchases. If I want a magazine, I may not be able to get a video. I see how much I have left in my wallet and I know the number of days before my next ATM payday. It's a good strategy, at least for me.

I put left over funds (in $20 increments) into the envelope at the end of the half month period. If I want to purchase something more significant, I need to use the saved funds in the envelope. Hence, I have both a budget and a reason to save. At the end of the year, I deposit most of the saved funds into the bank.

Unfortunately, sometimes I cheat and use my credit card when I shouldn't.

I like this method of controlling expenses. Thanks for posting!

My current "budget" method is pretty loose. I have a detailed budget plan that I created in Xcel, including short and long term savings items, so that I have some goals. But what happens during the months does not often correspond to my goals. But, I am still meeting my long term saving goals, so I'm doing ok. But I'd like to do better.