budgeting types - a beginners guide?

db2016

hi all,



reading some diaries etc, and terms like zero based budgeting and giving every £ a job etc and other systems are thrown about.

so could anyone enlighten me as what they mean? a beginners guide if you will?

i dont budget as such, but i do have a very good idea what gets spent and when its expected etc. but ive never formally written it down / and have numbers to "stick to" - i do use mobilis app though, and log all spends into categories and thus can produce a report that says "oh you spent, X amount on amazon / groceries etc).

just wondered, and i may implement in 2020, and maybe even if theres a solid one system that comes out of you guys, a guide could be "stickied"?



T.i.a.

Willing2Learn

Hi,

I use the YNAB software with which to budget. It is a zero-based budgeting model and the mantra is "give every $ a job".

Have a look at the YNAB blog (link below) as that describes the methodology in more detail.
https://www.youneedabudget.com/a-zero-based-budget-boring-effective/

colsten

People either use pen & paper, home-made spreadsheets or budgeting apps such as YNAB, MS Money, AceMoney or Yolt. Some also use the 'budgeting' features that come with banking apps such as Starling but that restricts them when they want to move to another provider.

I wouldn't get hung up with terminology as there are no agreed standards that everybody uses. The main thing is that you know what payments are due when, that you have the appropriate money for it, and that you review that your actual spend is indeed as per your forecast (i.e. your budget). And that you don't have 'dead' money hanging about that earns no interest, and thereby loses value to inflation.

If you want a course on budgeting, you will most likely have to pay for it. People seem to like the YNAB webinars a lot. There's a dedicated YNAB thread somewhere on this Forum which should give you more details.

kuratowski

There was a useful thread on this topic recently here:

https://forums.moneysavingexpert.com/discussion/6075062/where-are-posts-about-budgeting

Edit: Forgot to add, I'm another YNAB user!

MovingForwards

I run a spreadsheet, it lists my monthly income and all my outgoings eg council tax, rent, utilities, petrol, union subs, food, CC payment (if applicable), eBay spends, savings basically everything I would spend on throughout the year.

My food budget is for my food, pet food, booze, toiletries, clothes etc.

Its all auto-calculated, so when a bill or something comes out my account I zero that figure and adjust the one for what is left in my account.

As my salary doesn't really change, aside from pay rises, I have worked out the whole of 2020 and just alter figures if bills go up or down.

Due to knowing how much I need each month for living expenses, I know how much as a minimum I can save.

If I don't go shopping one week then I move that money to savings.

Its worked well for me for the last three years.

getmore4less

They all become the same thing whatever tag lines you use.

Budget is just a plan of how you want to use all your money.

It should be a minimum of one year in detail, preverably longer to take into account those future bigger spends.

The key to a successful budget is realistic allocation for each category of spending and tracking that you are not over spending and if you do replan.

The best tool for the job is the free MSMoney(or similar like quicken).

YNAB was designed to tackle a particular class of problem where people don't budget and cannot manage cashflow many carry on using it when they have a handle on their finances but why pay for a tool when their are free options.

If you don't have a plan looking at least 1 year ahead you are not budgeting

Cashflow management can also be a problem if you don't have enough buffer funds to detach income from outgoings.

Once you have the annual plan you can then look at when the money is coming in to work out when it goes out. Some spending may need to be delayed.

Herbyme

I don't think it matters which way you record it as long as it's easy for you to use and gives you the information you need. I've dabbled with YNAB (great tutorials on youtube) and MS Money but didn't want to spend the time getting up to speed with them. I'm pretty adept with Excel so I'm most confident using spreadsheets which I can tailor to my own needs.

It's all about your needs and priorities, not anyone else's.

I'm still getting to grips with budgeting and what to do with the results - for me I think it's a mix of feeling confident and secure that my money is under control, and enabling me to decide what I can and can't realistically spend. I've been surprised to see what I've spent my money on (before I began this process, a few months ago) - eg much more on travel than i realised.

At the end of this month I'll have 6 months of data to use for planning next year's spending. I'm self employed so I need an extra layer to account for variable monthly incomes, I do that by 'paying' myself a salary out of my 'work' account so it's as if I'm PAYE.

What I haven't worked out yet is how much to save (not yet really sure what I'm saving for, a bit of a long story but see thread on how people budget with their partners...) . Obviously there are plenty of things I could save for, eg house move costs for a planned move in 2021, but that's for another thread!