What budgeting tools and methodology do you use?

[IndependentlyPoor]

Warning navel gazing follows. Reading this is likely to cause rolling of the eyes and searching for an "ignore poster" button.

Like several here, we don’t budget. Somehow we manage to stay within our means without working very hard at it. In the old days, we would review our spending when the monthly bank statement came and cut back if we were spending to much. These days, we use a credit card for almost everything and frequently check the balance online. We also download credit card statements into Quicken, so it is easy to see where the money went category by category.

The one time we extended ourselves was at the bottom of a housing bust when we bought a house in a snazzy neighborhood. I allowed myself to be talked into a “creative” mortgage that offered a great rate that was fixed for 7 years, but then had a one-time adjustment. I never could be comfortable with the “don’t worry, you can always refinance” line, so we paid it off in 6 1/2 years.

I have never thought of myself as frugal, and I don’t think anybody who knows me would describe me as such. I have always enjoyed the toys and status symbols of upper middle class life. So why, when I got bad diagnosis at age 50, could I look around and realize that I could just chuck it all and retire? I think the reason is anxiety avoidance. I am a worrier, and I hate to worry. I can’t enjoy any purchase if it makes me worry about money, so I don’t buy things I can’t afford. It isn’t a logical decision, it is a feeling: “Will that sexy new convertible make me happy?” Inner voice: “Yes, yes, buy it, buy it!” Second inner voice: “You won’t be able to sleep at night worrying about those payments.” So the ragtop stays on the lot.

I guess part of it is the American dream in action: son of blue collar parents goes to college and gets white collar job. Wham! It was a huge jump in socio-economic class, but I never felt entitled to the luxuries of upper-middle class life like I probably would have if my parents had been rich.

And then there is luck. Having the right degree at the right time allowed me to catch the wave of absurdly high engineering salaries paid during the tech. boom.

But end the end, I must have somehow absorbed my parents frugal ways without meaning to. And not a bit of it is genetic: I’m adopted.

We like to think of ourselves as rational, but feelings count: sometimes more than we are willing to acknowledge.

 

[caninelover]

I used to use Microsoft Money but they announced they were essentially canning it, I started using an online service called Mint.com. It is free and will consolidate your spending data from your credit cards & bank accounts, and will also track things like mortgage loan balances. I was initially concerned about security but after looking at their site they addressed my concerns adequately.

I track spending on Mint now, but I set up my budget annually on an excel spreadsheet. I figure in a monthly allocation for irregular expenses like insurance & property taxes, travel, car/house repairs, and then include any big ticket items I plan to buy that year (e.g., this year, a new laptop to replace my 5 year old HP). Then I set alerts on Mint for categories that I know from experience I need to watch closely - food & entertainment expenses mostly.

 

[Midpack]

I tried Quicken, but too high maintenance for me. I use Excel for budget/expenses, essentially one page looks like a checkbook register with every expense plus a column for major and minor expense categories. Another page is simply a pivot table showing each expense category by month. And I can slice-n-dice from the expenses any way I want too.

I also have a separate Excel spreadsheet to track income and taxes. And a third Excel spreadsheet that tracks investment performance and net worth. I prefer knowing exactly how everything is handled/calculated by building my own spreadsheets vs a package. YMMV.

 

[Zoocat]

My wife and I live on a "fixed income" so to speak.

This is how it works:
Let's say your budget is set at $60K per year, or $5K per month. Let's say your net monthly income is $7K. First, keep $5K in your checking account and send $2K to the investment account of your choice.

Let's say that, in a given month, your bills total only $4K. So you pay the bills from your checking account and then you sent the $1K left to a savings account. Rinse and repeat. Some months, your bills will total more than $5K, in which case you take money out of the savings account to make up the difference.

If, by the end of the year, you have no money left in your checking and savings accounts and you had to borrow money from a credit card or from your investment accounts to pay the bills, you know you are over budget. If you have money left over on the savings account, you are under budget. Easy. Then you can use Quicken to drill down into the specifics of your spending and identify areas where you can cut back if needed.

This is exactly my plan. I really hate being on a strict budget but I do total up a budget in Excel several times a year so that I can figure out how much I need to put into short term and long term savings. As long as I am meeting my savings goals then I don't worry about the rest of the budget and whether one category is out of whack.


Shawn, How in the world do you spend so little on groceries? Really. I'd like to see a grocery list!!

 

[RonBoyd]

I got a rude awakening today when I found my Microsoft Money Plus program inaccessible.

ED,

You do know that you are not set up to receive Private Messages... or have specifically refused to receive any. Therefore, I was unable to respond to your PM to me. In any event, thank you for the information.

 

[Tesaje]

I started using Moneydance this year after using Quicken for a decade or more. I never really trusted Quicken. One year it claimed I had about 10 million more than I knew I had, I could never find it and then it just as mysteriously disappeared. Moneydance is clean, does true double entry bookkeeping, and I can tell what it is doing. Plus, updates are free and they aren't trying to grab my data and put it on line or trying to sell me a bunch of junk.

Moneydance is my daily expense records and categories. In addition, I created an Excel spreadsheet for true budgeting tailored to my spending/saving. I use a worksheet for each year, then pad it with the last Dec. and next Jan. My occasional expenses are in bold and I use the links to keep everything straight. Each month, I enter in my bills. I use links to automate almost everything, then overwrite with actual amounts when they occur. I have projections out several years that use the last year's month as the entry, with a multiplier for inflation. This way I can see how I am doing very easily and play what if games on the future.

I no longer track my cash. Every now and then, I add up what is in my wallet and add a misc entry for the delta in the cash account. I once logged all cash to see where it was going but it isn't really worth the bother. I mostly use a cash-back credit card and log all receipts. Once I got the habit down, it isn't a big deal to keep up with it.

 

[RonBoyd]

I started using Moneydance this year

Moneydance is on my list of candidates for MS Money replacement; as is Personal Accountz. See these two reviews:

Money management software review: Personal Accountz
Money management software review: Moneydance

A Google search shows lots of similar assessments of these programs -- these two reviews are important only in that they from the same person.

 

[In-control]

We tried a few budget sw packages and found that a simple excel spreadsheet worked best, based on real $ spent per catagory, summed up monthly and compared to a goal. My SO and I agee on a budget number in January for the year and I fund it monthly, typically increasing it 3%/yr. She then manages the spreadsheet and the budget. Nice and simple and - free.

The hardest adjustment to make was to start managing the $ in the budget. It tock two years to really sink in. No sw package can teach that and the more barriers we removed the more likley we were to hit our budget numbers. So far so good.

 

[RonBoyd]

We tried a few budget sw packages and found that a simple excel spreadsheet worked best,

Great! Tell me how you have a simple Excel spreadsheet handle these ( just for example) tasks:

Online banking and bill payment
Pay your bills in seconds without picking up a pen or licking a stamp. Synchronize your records with transactions downloaded from your bank, with support for OFX, QFX, or QIF files.

Stay on schedule
Easily plan ahead by scheduling recurring or future transactions including bills, loan payments, and paychecks. You know, like all upcoming or overdue bills and automatically calculate principal and interest payments for mortgages and other loans.

Track your portfolio
Follow your investments and bring your portfolio into focus with support for stocks, bonds, CDs, mutual funds, etc. View the total value of your investment accounts or the performance of individual stocks and mutual funds over time -- or in "real" time. How are stock splits and cost basis computations made, and are current prices downloaded automatically?

 

[In-control]

Sure:

We have 12 monthly columes. Each row is a spend catagory and on the bottom I have a sum for the month, goal and a variation cells. At the end of eah row I have the rolling sum over the 12 months, yearly goal and variation.

We front load any auto pay's, recurring payments into each monthly colum. Making small adjustments as we go. My SO has two checking accounts, one for big, occasional spends and one for the daily items. I fund each one based on our previous years run rate + inflation each month. I subtract that $ from a savings account that I fund at the begining of the year when a 5 yr cd expires, I have 5 years of living expenses in CD's.

Since the goal of this is to keep track of our daily budget I do not include investment $'s in the budget. I tract all of the other funds via my vanguard account. This combines all of my assest by class and is very simple.

Simply works best!

Great! Tell me how you have a simple Excel spreadsheet handle these ( just for example) tasks:

Online banking and bill payment
Pay your bills in seconds without picking up a pen or licking a stamp. Synchronize your records with transactions downloaded from your bank, with support for OFX, QFX, or QIF files.

Stay on schedule
Easily plan ahead by scheduling recurring or future transactions including bills, loan payments, and paychecks. You know, like all upcoming or overdue bills and automatically calculate principal and interest payments for mortgages and other loans.

Track your portfolio
Follow your investments and bring your portfolio into focus with support for stocks, bonds, CDs, mutual funds, etc. View the total value of your investment accounts or the performance of individual stocks and mutual funds over time -- or in "real" time. How are stock splits and cost basis computations made, and are current prices downloaded automatically?

 

[RonBoyd]

Sure:

We have 12 monthly columes. Each row is a spend catagory and on the bottom I have a sum for the month, goal and a variation cells. At the end of eah row I have the rolling sum over the 12 months, yearly goal and variation.

We front load any auto pay's, recurring payments into each monthly colum. Making small adjustments as we go. My SO has two checking accounts, one for big, occasional spends and one for the daily items. I fund each one based on our previous years run rate + inflation each month. I subtract that $ from a savings account that I fund at the begining of the year when a 5 yr cd expires, I have 5 years of living expenses in CD's.

Since the goal of this is to keep track of our daily budget I do not include investment $'s in the budget. I tract all of the other funds via my vanguard account. This combines all of my assest by class and is very simple.

Simply works best!

That sounds more like a Diary... and a lot of work at that. Why waste money purchasing Excel for that? In any event, I wholeheartedly agree, simple is best and certainly it is an honorable goal. If only (my) life were so.

 

[FUEGO]

I think this thread subconsciously made me decide to switch from an old fashioned checkbook register to a high tech google docs spreadsheet that will serve as the checkbook register. I wasn't sure why I didn't do it till now. It makes perfect sense though.