Household budget

[white sheep]

I have been working our budget over and am looking for input. I calculated our total uncontrollable expenses which include everything that is a bill that I can't really do anything about. Mortgage, utilities, phones, daycare, anything that is a regular payment. What I am trying to figure out is what a reasonable amount to set for the rest of the budget would be. This would be for all other expenses- Wal-Mart, groceries, everything else except gas which would go on a credit card. Married, two babies. I was thinking $800 should be a doable budget.

[Richard320]

The only way a budget will work is if it's based in reality. Your checkbook register is your friend. Or your bank statement. What do you really spend on groceries per month? If it costs you $400, you might be able to trim a little and get it down to $350, but there's no point figuring $200 ought to do it. You'll fail.

Go through your expenses and see where your money goes, then figure out a reasonable budget. Don't forget to leave a little room for unexpected expenses, like school field trips, or the oil change for the car that only comes around every 6 months or so.

[midori_]

I've recently been reanalyzing my own spending habits.

We generally charge everything directly to a credit card (yay credit card points) and then pay off the balance in full each month.

This past month, I've charged all my "serious" expenses (gasoline, groceries) to one credit card. Then I've charged all my "frivolous" expenses (Easter baskets, picture frames, new bedsheets, a video card, gifts for people, fabric for a project, eating out, spring plantings, etc) to a different credit card.

Apart from ordinary bills (electric, water, gas, mortgage), food and gasoline are my two biggest expenditures. But forcing myself to isolate all my frivolous spending also makes me be more aware that, yes, I'm spending more frequently on piddly little things that I don't really pay attention to, and I might not really need, and it adds up.

[Luna Lovecraft]

Originally Posted by white sheep

I have been working our budget over and am looking for input. I calculated our total uncontrollable expenses which include everything that is a bill that I can't really do anything about. Mortgage, utilities, phones, daycare, anything that is a regular payment. What I am trying to figure out is what a reasonable amount to set for the rest of the budget would be. This would be for all other expenses- Wal-Mart, groceries, everything else except gas which would go on a credit card. Married, two babies. I was thinking $800 should be a doable budget.

Eight-hundred dollars might be doable, it might not. It depends on the needs of your family and where you live. I've lived in places where $800 would last two months, others where the same amount would only buy three weeks worth of groceries.

[1ke]

List out all of your expenses by category:

• Fixed expenses (those that are the same each month such as mortgage, car payment, and don't forget savings)
• Variable expenses (those that vary each month such as utilities, groceries)
• Periodic expenses (those that come only periodically but that you must budget for monthly, such as car tags, car/home repair, holiday, etc)

Be very detailed. There are lots of budget worksheets online. After you have listed out your expenses then compare that to your net income.

If your expenses exceed income, there are three ways to fix that: decrease expenses, increase income, or a combination of the two. Make adjustments in your discretionary spending until expenses are equal to income or look for ways to increase income.

Then track your actual spending over several months to ensure you budget is realistic.

[twk001]

we do it dave style (dave ramsey that is) and we fill out a paper budget every 2 weeks in our house.

we put a name to EVERY dollar and tell it where to go so at the end of the pay period we're not wondering where our money went!

for us it has worked wonders and paid off a MOUNTAIN of debt this way. we plan to continue budgeting even past our debt so that we can move forward in the baby steps and start wealth building in the next 5 years!!!

[PaulGH]

We also do a Dave Ramsey-style budget. Our experience has been that the only way to get answers to questions like "is $800 enough for groceries and miscellaneous" is by trial and error. In other words, do a budget for one month with your best educated guesses, and try your best to stick to it. But be ready to make adjustments if needed, because some things will probably be way off. Then use the lessons learned at the end of the month to make the next month's budget, and so on. After a few months, you should have a pretty good idea of how much you need to budget for each category.

[white sheep]

Originally Posted by PaulGH

We also do a Dave Ramsey-style budget. Our experience has been that the only way to get answers to questions like "is $800 enough for groceries and miscellaneous" is by trial and error. In other words, do a budget for one month with your best educated guesses, and try your best to stick to it. But be ready to make adjustments if needed, because some things will probably be way off. Then use the lessons learned at the end of the month to make the next month's budget, and so on. After a few months, you should have a pretty good idea of how much you need to budget for each category.

I'm sure in two months I'll know exactly. My wife has always refused to have a budget, so I was just trying to make sure I'm not totally off. We had tried $500 a few times in the past and that wasn't nearly enough.

[Cat]

Originally Posted by white sheep

I'm sure in two months I'll know exactly. My wife has always refused to have a budget, so I was just trying to make sure I'm not totally off. We had tried $500 a few times in the past and that wasn't nearly enough.

Married 33 years this summer.

My husband and I never had any success with a budget. We did the envelope thing back in the early years of our marriage. Inevitably, a "disaster" would strike; e.g., our car would break down and major repairs would be required, and we had to pay for it somehow. So all the envelopes were emptied to pay for the car repair bill, and so much for "the budget."

We still don't use a budget. We have a pretty good idea of what our expenses are, and we try to pay cash for almost everything. But we don't hesitate to put things that we need or even want on a charge card. Life goes so fast--the older you get, the more you realize that a lot of people never make it to retirement, and what good does that huge retirement nest egg do? We have no regrets, other than wishing that we had moved to a city where the skating rinks offered good synchronized skating teams to their skaters. The commuting 65 miles (one way) was expensive, but it also gave us a lot of family time in the car, which was awesome. At least gas didn't cost $4.00/gal back then--we thought $1.50/gal was awful! Silly us!

As for the emergencies like car repairs, some budget purists would say, "Just go without a car" rather than borrowing money from other accounts or putting repairs on a credit card. Much easier said than done in Northern Illinois in the winter in a city with a very poor public transportation system. I saw a family who biked to the Walgreen's last night--they looked pretty darn cold! Just because it's April doesn't mean it's warm in Northern Illinois--it was 37 degrees when that family was riding their bikes, and they were definitely not dressed for winter biking!

[PaulGH]

Originally Posted by Cat

As for the emergencies like car repairs, some budget purists would say, "Just go without a car" rather than borrowing money from other accounts or putting repairs on a credit card.

I'm a big believer in doing a budget, and I wouldn't say that at all. Instead, I would say try to make adjustments in the budget so that you can fit in the car repair, if the repair is small enough. But if that isn't possible, then take money out of your emergency savings to pay for the car repair, and replenish your emergency savings when you are able to do so, over the next few months.

Having said that, I don't think that the concept of budgeting is necessarily one-size-fits-all. My wife and I have tried doing a budget as well as not doing a budget, and not doing a budget was a nightmare for us. But for some people, it might be the opposite.

[ZxM]

are you paying off the gas each month that you put on the credit card? i would use a debit card instead so you stay more true to the budget.