How do YOU budget?

Soworried

I actually just use notes in my mobile phone.
On pay day I work out what I have left after bills and savings and I type the £ note amount in to my phone. Every time I spend I just knock it off the total there and then. Keeps me right with minimal effort.

Cherry_Burton

YNAB is more than a budget app, although it is a great app to budget and track expenses.

YNAB has four rules,
Rule One - Give every pound (dollar) a job, - zero budget each pay cycle
Rule Two - Embrace your true expenses, budget for occasional item whether they are a holiday or car repairs. Each wage put aside money for those things which are either less frequent or less predictable so when they occur you have the money to cover them and you don’t have to borrow to cover them.
Rule Three - Roll with the punches, if things change,change your budget, as long as it zeros out no problem
Rule Four - Age your money, get ahead and you have money in hand so you are not waiting for your next wage/salary to arrive.

Recommended prioritise for your budget are:

1. Your obligations - rent/mortgage , gas, water, electricity, food, travel to work costs, TV licence
2. Savings for less frequent expenses - car/home repairs, car tax, holidays, Christmas
3. Paying off your debt
4. Save to get at least one month ahead. If you get paid on the 31st August you should already have money for September’s expenses and the wage which hits your account at the end of August pays for October’s expenses
5. Save for long term goals, things you really want like going to college, saving a deposit to buy a house, have a baby etc
6. Fun things

You don’t have to finish each step before you move on to the next, (although it might be a good idea to do so in some cases) it’s up to you.

I’ve found it very useful, but like anything else it has its downsides. Although it can be customised to £ and British date style it’s very American. They talk about chequing account instead of current account and pay cheque rather than wage or salary. Also, it does take a while to get the hang of it, (at least it took me while) I suspect that’s why there is a 34 day free period.

The rules may look restrictive and I’m sure there are many people on here that don’t need them and are sufficiently astute or good with money to do this thing naturally. If that’s you great but if, like me, you have struggled with money in the past the rules do work. I'm proof of that.

CB

LameWolf

JIL wrote: »

Some on here would be horrified to learn that I buy all my groceries and petrol and holidays on my credit card. I do get cash back for doing so and it is always paid off in full each month.

There's nothing wrong with that - we use our credit cards for two of the three supermarkets we use (it's cash in @ldi) and for petrol; but I always move the amount spent from Cash Available to Credit Card Spend on the spreadsheet as soon as we're home, then that money is spoken for, and is available to pay the credit card bill in full.

Cherry_Burton wrote: »

Save to get at least one month ahead. If you get paid on the 31st August you should already have money for September’s expenses and the wage which hits your account at the end of August pays for October’s expenses

I so agree with this; and it's a principle I've used for years.
Personally, it'd just about choke me to pay for a budgeting system, but I've been budgeting since I was a child, so it's almost second nature for me to do it. I realise others don't always find it easy to do.

Before computers, I used to have everything in notebooks; nowadays, I enjoy the "luxury" of having the spreadsheet do the sums for me.

Memory Lane moment: I remember being in floods of tears when I was about 8 years old because I couldn't account for 3d (remember threepenny bits, anyone?) and my books wouldn't balance (which would have got me in a world of trouble with my father). Finally I remembered what I'd done - I'd bought a purse for a friend as a present, and then my grandmother had told me it was unlucky to give someone an empty purse, so I'd slipped a threepenny bit in it, but forgotten to write it down, as it was a last-minute thing before wrapping the purse to give to the friend.

FrugalinShropshire

JIL wrote: »

Can I ask a question of the different purses method, if you go out shopping and you are buying things that need to be paid for out of different purses, how does that work? Especially if the items are from the same shop? Just curious, I think we all do what works for us.

We plan all of our spends, food has a seperate purse also, so if I was going to the animal feed store and the garden centre I would take both purses. If we were picking up some shopping and going for a cup of tea I would take 4. They are just little home sewn zipped pouches not big purses as such and we have embroidered sew on labels for the front (sad I know:rotfl:)

Sky_

I use the desktop version of YNAB and so far it has helped us to:

• save and put down a 10% deposit on an expensive house,
• pay for improvements on said house
• have a good amount of savings and
• be more than be one month ahead with all our living expenses.

I'm not sure what I'll do when the desktop version stops working properly, but YNAB has saved me far more than £3 a month, (and saved me lots of precious time,) since I've been using, it so I may move over to the subscription version.

MandM90

Sky_ wrote: »

I use the desktop version of YNAB and so far it has helped us to:

• save and put down a 10% deposit on an expensive house,
• pay for improvements on said house
• have a good amount of savings and
• be more than be one month ahead with all our living expenses.

I'm not sure what I'll do when the desktop version stops working properly, but YNAB has saved me far more than £3 a month, (and saved me lots of precious time,) since I've been using, it so I may move over to the subscription version.

I'm usually super tight, but the £3 a month is worth it IMO. I love the way all the 'pots' work. Yes, I could probably manage with spreadsheets and millions of bank accounts but OH wouldn't be able to spend X of the grocery budget and log it immediately at the checkout so I can see it on my computer/iPhone, and I'm not sure what the implications would be on my credit report. I much prefer one account, with the highest interest available, and consulting YNAB to know how much my pet buffer/home maintenance fund/pocket money holds. Every penny of money I spend is 100% intentional and tracking my net worth etc is really fun.

Plus, if any company ever says "you didn't pay off X" I just type their name into the search field and every single transaction I've ever made shows, so I can easily find it in statements and know which card I paid from. I never feel guilty about spending money, because it's all allocated, but somehow my net worth keeps growing and growing. It's amazing. I'm going to stop raving about it know because I sound crazy and brainwashed, but I think it need to be experienced to be believed :cool:

MandM90

Actually the most amazing thing that's changed is we've gone from thinking we had nothing spare to saving over 50% of our take home pay. Absolutely life changing.

dillydilly

I don't, I've just always made sure I earn more than I spend, which meant my best decision was buying a house based on a prudent view of my lifetime earning potential... only check now is every six months to see if my net worth is increasing

DianeK

I calculate that months income, deduct all my dd and so for that month, and pay off my credit card, see what's left. Each week I take out a fixed amount of cash and that's for the week. I vary it slightly each week, depending on social events, birthdays, etc, but unless there's an emergency, each week when it's gone it's gone! Using cash might be old fashioned but I find it much easier to keep tabs on my expenditure.

kazt2006

An old version of MS money for me - I think from 2004. It projects my cash flow as far into the future as I want and reminds me when bills are due. I suppose I could set it up in Excel but for the time being why reinvent the wheel. The only downside is that MS stopped supporting it 5 or 6 years ago so when it does finally go I'll be screwed!

I tried a couple of other pieces of software when Money wouldn't work with windows 10 but they just weren't same. Then one of my geeky friends found the solution on line and hey presto order was restored!