Comments on: Your Money Or Your Life: Where Is It All Going?

By: Kim

Kim — Tue, 09 Oct 2007 15:36:06 +0000

We have a fund for those BIG bills that are due annually or semi-annually. These bills include: auto insurance, homeowner’s insurance, auto tags, property taxes, and hubby’s golf cart fee. This all adds up to a hefty chunk and the amts. vary over time. It takes a little arithmetic to figure out how much we need in that fund but it’s worth it to avoid feeling ambushed by these irregular expenses. And, as a reader mentioned, it keeps our hands off the emergency fund.

By: cms

cms — Tue, 09 Oct 2007 13:07:05 +0000

Property taxes do not count as “emergency” needs, so using an emergency fund for them is missing the point of having an emergency fund. If a person’s mortgage company does not hold the taxes, then they should set up a subaccount within their savings (like you can do with ING), and put the necessary amount in that subaccount every month. It’s not “savings” and it’s not “emergency” — it’s just paying for property taxes every month instead of twice a year.

By: Joe

Joe — Tue, 09 Oct 2007 12:43:34 +0000

…oops KS you are right–I meant savethrift and kept typing spendthrift. I guess I should have reviewed the post before I submitted.

By: plonkee

plonkee — Tue, 09 Oct 2007 12:04:17 +0000

I think that traditional budgeting will only really work for you if that sort of obsession with detail comes to you naturally. I have categories and a budget, but tracking my spending just doesn’t happen. I make as much as possible automatic and then just try to work within the rest.

By: Rick Dillard

Rick Dillard — Tue, 09 Oct 2007 10:59:25 +0000

This is a great web site:
http://www.yourmoneyoryourlife.org/. Especially download the training materials.

By: KS

KS — Tue, 09 Oct 2007 10:56:08 +0000

@Joe: I think you mean ’savethrift’? Otherwise it’s a very confusing story. ;-)

By: !wanda

!wanda — Tue, 09 Oct 2007 05:20:05 +0000

@Joe: You’re overgeneralizing.

By: Joe

Joe — Tue, 09 Oct 2007 02:57:07 +0000

You have thoughtful posts and great insight…and I hate to say this but if you really obsess this much about saving and spending especially in front of your kids, they will rebel. I guarentee one will rebel. How many thoughtful spendthrift parents have children who could care less about saving– what causes this especially if the parents work as hard as you do at saving? A little story–my uncle took his kids to Great Amercia near Chicago and it was a hot day near the 4th of July so it was crowded, and what did my spendthrift uncle do-he decided not to take his family because as he got closer to the entrance he found out the fee to enter, then he started adding the cost of all the sodas, food etc., so they left and went to a county fair in southern Wisconsin. He paid a heavy price with his kids, in his drive to teach them they could have as much fun at a county fair as Great America, he lost sight of the promise he made to take them to Great America. The point is if you forgo indulgences with your kids and your smart kids realize this–they will end up resenting you and rejecting your teachings. Save quietly not loudly.

By: Avlor

Avlor — Tue, 09 Oct 2007 02:40:57 +0000

Like FinanceAndFat and Mrs. Micah, budgeting works for my family.

We budget quite closely and similarly to an electronic version of the envelope system. I don’t find it a bother. Without it I was terrible at knowing how much was spent, and always overspent.

I don’t feel punished if we go over in a budget area. I just know the money has to come from somewhere else to make up for it. If we overspend too much – then less goes into savings. I’ve been watching this carefully and we’ve been able to put more into savings now. The budget simply helps show where we can cut back here or there in a month and where we can’t compared to what we’re spending. It’s a measurement and helps us “measure twice” to spend less overall.

I know the budget well enough to usually predict where we might have a bit extra at the end of a month and can stash that away into savings. I feel we need to track down to the penny, because I’m the type that “close enough” is a license to get away with too much and kill savings. We can live more tightly than we could before we budgeted and live on less. When we made more (i.e. both of us were working), it wasn’t as important to budget. So I guess I’m saying the less my family makes, the MORE important it is to have a budget to get anything into savings. We put more into savings now, than we did when both of us were working.

The usefulness of a tool always depends on how one views the tool.

(Oy. Much more wordy than I anticipated…)

By: Carlos P

Carlos P — Tue, 09 Oct 2007 02:32:31 +0000

Lauren,
I pay for everything with my credit card to get the points and then pay it all off every month. This is with Bank of America and they are very fast at posting my transactions. If I go out to dinner and come back home the transaction will already be on there. Sometimes the tip won’t post for a couple days or gas stations won’t post the full amount for a few days. Otherwise it’s pretty fast. My budget is down to a weekly “allowance” on my card and in cash and the savings is automated with ING.

By: Marsha

Marsha — Tue, 09 Oct 2007 02:19:34 +0000

Mariette, both Half.com and Amazon.com list used copies of this book available. Amazon and Barnes & Noble online both list it new, too. (Although I appreciate it if you are trying not to actually spend money on books.) You might post a query on Craigslist for the book, if there’s a Craigslist in your city.

Clearly, budgeting is an iterative process. Either start with tracking your spending and develop a budget from that data gathering — or do your best to build a core budget and refine or change as you go along.

I have built a general budget and I am tracking my spending. I expect I’ll refine and adjust things as I go along. For now, it’s better than the “whatever” approach I had been using! (in other words, I just spent whatever I felt like – that didn’t work too well!!)

By: Susy

Susy — Tue, 09 Oct 2007 01:15:07 +0000

I don’t budget per se. I figure out at the beginning of each year how much of our paychecks are going to go towards savings and the rest has to cover expenses. Then we try to spend the least amount possible on everything. I do however keep track of how much I spend on everything it’s down pretty meticulously. This works well for us since our expenses fluctuate from month to month. Whatever is left at the end of the year gets added to savings. Then I check what I spent in all the categories in my accounting software and divide by 12. Then the following year we try to spend less than the year before. I figure this is a good way try to keep from spending more as you make more. Each year we are able to save more of our money and give more to charity.

By: Mrs. Micah

Mrs. Micah — Tue, 09 Oct 2007 01:09:40 +0000

Like Finance and Fat I’ve found budgeting tends to work for me. I try to overbudget each category by a bit and then put the extra into savings at the end of the month. That way I know I have enough during the month, but I also try to keep my spending down because I know that if I do I should be able to put more money away.

Still figuring out the nuances of budgeting for two, though.

I think the automatic savings sounds good for many. It might even be the right move for us someday, who knows.

By: lorax

lorax — Tue, 09 Oct 2007 00:47:25 +0000

It has also been my experience that budgets don’t work.

OTOH, I don’t keep track of every cent as I spend it as the book suggests. Instead, I import it into Quicken, where it is easy to categorize. It isn’t perfect because lump purchases together as needed (ie everything from Safeway is groceries). It’s close enough for me.

By: Lauren

Lauren — Mon, 08 Oct 2007 23:50:41 +0000

Automatic budgeting without effort would work a lot better if online accounts would post much sooner.

By: Mariette

Mariette — Mon, 08 Oct 2007 22:35:14 +0000

Argh! I had to return my copy to the library and can’t get another copy for weeks. It also looks like the publisher is reprinting so all my local bookstores have it on backorder. I’ll keep reading when I get another copy as I was really enjoying it and want to work their “steps” so to speak. But no more book club for me. :(

By: kman

kman — Mon, 08 Oct 2007 22:05:08 +0000

I did a similar thing as trent. I figured all our required spending- yes that includes retirement and long temr savings categories too ;) I automate as much as I can and set up email reminders for the those non automatic bills. I figure out the average amounts for those bills that don’t have a fixed $ amount a month -gas,groceries etc. Deduct those out along with the fixed amounts and finally come down to a number that we both like-which is our allowance. From our allowances we deduct all eating out together, entertainment, personal expenditures etc. It’s been working well for us for about two years. It satisfies my frugal side- I know all the important things are taken care of and it satisfies my wife’s freedom to spend without me always asking her questions i.e. what did you spend this 35.67 on? etc.

By: FinanceAndFat

FinanceAndFat — Mon, 08 Oct 2007 21:44:29 +0000

I don’t buy the ‘traditional budgets don’t work’ idea. Budgeting is easy!

Maybe making a budget for every category is a bit much for some people, but I enjoy it and it has made a huge difference in the amount of money I have freed up to pay off debt.

Also, I’m pretty sure I got into debt because I had a lazy approach to managing my money and I feel much more in control now that I KNOW where every dollar is going and I have planned ahead to put it there.

On the other hand, I haven’t been at this for very long so my approach could turn into a massive failure. :)