Friday, December 22, 2006

Living without a budget

I am a terrible budgeter, I just can't do it. I am unable to track every penny spent, and I hate doing it. I hate collecting reciepts, itemizing purchases and seeing whether I really have the money for it or not. I tried to get DH on board, but it doesn't seem to work either. I say lock down no spending, he doesn't spend a penny. He just spends whatever I tell him. Right so maybe he should run the budget? But he seems equally incapable.

He refuses to use coupons to shop, he hates eating what's on sale and is only learning to compromise. He prefers we plan out meals we want to eat and stick to it, whether the meat/produce is on sale. That's his way of budgeting.

Actually we're both this way. It's probably why we're together. We start with our gross income, build in all savings like retirement, ESPP, IRA, then taxes and see what we have left. From there we decided on our home payment, insurance, etc. Then the rest we sort of spend freely.

I trialed both Microsoft Money and Quicken this week, but it's impossible. I don't know if it's me or our method of living. I can't seem to reconcile our spending habits at all. Our accounts never seem to balance. We supposedly live on a zero based budget, but I'm starting to think not. I think we just sort of live paycheck to paycheck, whatever money is there we spend.

I'm not sure if I should attempt to break this cycle. And if I do, will DH kill me? No we don't have CC debt, no car loan, only a student loan for $8500 (he just accrued) and we are cash flowing more tuition. So debt isn't a big deal for us, we're not huge spenders. But I can't figure out where the rest of our money goes? We do save a substantial amount of our income 30-40%, but it's so frustrating.

I think I'm pretty computer savvy, but I just can't use a budgeting software. And we can't follow a budget. How do people do it? Should we give up the CC? Should we just do cash? Which by the way, I think DH would rebel against...


mOOm said...

If you are saving that much it sounds like you are doing fine. I've never tried to use any of that software or budget apart from randmly think I can't afford to buy things. Fact seems to be that detailed budgeting suits some people's personalities but not others...

Living Almost Large said...

We had dinner the other night with our neighbors, both accountant/mbas, they have a 5 year and lifetime spreadsheet spending plan. DH and I are lucky to balance a month.

So they discussed reconciling a budget and I glazed over and said "what's reconciling?" Well that sort of drove me to attempt to use software to budget, but it just is impossible. Maybe I'll give it a go after the new year.

Broken Arrow said...

LAL, this is Broken Arrow from afar. ;)

I'm of the opinion that the only people who suck at budgeting are ones that never even bother trying.

However, I also believe that people who think they suck just haven't found a method that works best for them yet.

I use a PDA myself, and really couldn't do it any other way. Some are too aggravating. Some don't make sense to me even though lots of people have done quite well with it.

With all budgeting, I recommend starting out with cash and real life envelopes. From there, you can see what works with it and what doesn't, and evolve your methods from there with the myriad of options out there. Or, you could also stick with it like some people have done. Again, the best method is the one that works best for you.

Happy hunting!

Living Almost Large said...

LOL, Broken Arrow you may be right. I suck because I never seem to stick with it. I've tried, quicken, money, etc. I've also tried cash envelopes, but it doesn't work really well, DH just hates it.

For some reason using cash, we spend pretty much nothing. So instead we live extra frugal and buy nothing, which is nice, but it's not an enjoyable way to live long term. I sort of like eating out and doing so in cash never happens.

I'm debating trying again. I'd love to live on a budget. Maybe that should be a resolution. We'd probably save even more money.

Lisa said...

I am attempting to live by a budget as well. I have set up catagories and through trial and error have allocated set amounts to each. For the most part, I have been able to stay within the guidelines. BUT,,, on occasion I do go a little crazy and mess up.

I try not to beat myself up about it, I adjust and move on. For me its darn hard to stay within the budget ALL the time. I know I will stray and I accept that.

Living Almost Large said...

My budget is just a rough estimate of what I'd like to spend. This year Christmas got way more out of hand than expected. Unfortunately I won't know the complete damage till I go home and see.

But I enjoyed myself immensely. And I think if I had stuck to a budget I wouldn't have gone home.

BUT sometimes you only live once and the time with family cannot be taken back. I just wanted to say I hope everyone is having a happy and healthy holidays.

My resolution will be trying to budget. Maybe I'll do cash this time.

bespeckled said...

I use Quicken by downloading all transactions online. I don't account for cash and therefore try to minimize the use of cash. I can't claim to really budget. I look at the Quicken reports to see where my money has gone, but I can't tell you how much I spend per month on groceries. I consider it the first step towards budgeting, but like you, I don't like to watch every penny.

paigu said...

Spotted your post in the "Carnival." I feel like I can relate; I, too, do not have a nice and neat budget, yet I don't feel I need one. I pretty much have a grasp of my monthly "entertainment" spending (judging from credit card bills) so I try to stay as much below the average as I can. My philosophy is that if you're not worried about not having enough $$ in your bank account to pay the bills, then you're at least on the right track. I suggest you look closely at your monthly credit card statements. A lot of them categorize your spending, so you can get a feel for the sort of categories you might want to use should you decide to draw up a budget. Good luck!

slug said...

Richard Jenkins of MSN money admits he thinks budgets are a waste of time. You and your DH might like his method better than adhering to a strict budget.

I follow a similar method as above and keep a close eye on my money left over (after paying bills) by checking my balance online several times a week. I usually am living pretty frugally at the end of the month though, lol!

slug said...

Here is the link I referenced above. Hope it works (yes, I am an amateur!)


Living Almost Large said...

I call myself a backwards budgeter. When DH started his job, we budgeted maximizing retirement, ESPP, savings then we decided how much house we could afford. We just made retirement a line item to be taken out before we buy anything else. We really can't live on the 60% solution, because of the COLA where we live.

To be honest I really would like kids so I'm thinking we should save more. Our problem is we spend money like water on stuff because we don't have a budget. We did do better than expected DH was shocked we increased out net worth by $48k this year and so was I.

I think we can do better if we had a budget and name every dollar. My goal this year is to hit $250k net worth, meaning I need to save $54k. We shall see in 1 year.

Glad people are finding the site.

Eileen said...

You might want to look at YNAB. ( Money and Quicken are both terrible at budgeting. With the YNAB system you spend the money you made last month so it's much harder to overdraft. Even if you don't like tracking every penny, I think that it still helps to start with a ball park for spending (ex. "since we had to spend money on car repairs last month we only have $60 to go out to dinner this month" - then when you go out and dinner costs $38.99 mentally adjust the eating out budget to $20)

Living Almost Large said...

I am going to post on my usage of Quicken and Money.

catdance62 said...

LIke was previously noted, if you are saving that much, you are doing better than probably 80% of the population!! I am "older" and I am amazed at the number of people in my peer group who haven't saved a dime for retirement!! They expect Social Security to hold out??? Give me a break!!!

Living Almost Large said...

thanks, I am, our net worth increased by almost $50k last year mainly from $23k Roth/401k. This year I'm holding off again on the Roth until 2008 because of our income.

Anonymous said...

I think me and my wife are like you guys. We have been trying to reach the goal of 31k in our 401ks and about another 8k in roth iras, another 5k in essp. The rest typically gets spent or gets rolled into our ING savings account.

With this plan we would be saving about 30-34% of our gross income.

I think the budget thing is for those people who cannot reach this goal.

I used to feel like you from paycheck to paycheck...but u have to look at the big picture.

However, I use quicken and i think its great in making sure that we are on track with our spending. There will be some months when u over spend your grocery budget but underspend ur eating out budget.

I used MS Money too and really loved their interface however was not a big fan of the online reporting thats built in to ur hotmail account...kinda freaked me out a bit.

Use quicken for a few will come together once you have a database of past spendings and savings.


Living Almost Large said...

I just am not able to use Quicken or Money. It's way too tough. I swear I'm computer illiterate. Budgeting is going to happen slowly. I may try to budget more firmly our eating expenses in February, not for money but I'm going to lose weight. And I'm thinking of starting a blog about it to be accountable.