Budgeting

RG2015

This may be a slight change in topic but it is still budgeting.

Are there two extremes to the budgeting spectrum?

1. People who live from one payday to the next, thus needing to hold money back for their weekly spending needs.

2. People whose income exceeds their expenditure, who also have some savings, for whom payday is irrelevant.

For the group towards the 1st side of the scale budgeting is essential.

For those towards the other end, budgeting is more a long term planning exercise to make the best use of their money to serve their needs and aspirations.

  

[Deleted User]

I budget but not obsessively. 

All annual bills are saved for monthly. Household bills have a separate current joint account into which I put in the same amount each month by standing order. An older relative, with whom I  live with,  also contributes to that account. That account covers fuel, food, all utilities, household goods, charitable donations, window cleaner, TV licence, laundry( bed linen and towels) and council tax.

I have another current account that acts  as a back up current account as well as the account that is used for dental bills, Christmas and Birthdays. 

I also have my main current account that is fed by my workplace pension and part time earnings. This account feeds the joint account, my back up account and my savings and investment accounts. From this account I also pay for broadband, my mobile and my funeral plan plus personal spends. 

All areas of expenditure are given annual budgets which I do not exceed.

Forecast expenditure for 2023 is about £22000 (this includes two holidays) . Forecast income is between £24000 and £28000 depending on when I finally take full retirement. So this year a surplus is forecast.

As most allocations are similar month to month the only real category I watch is personal spends. This includes haircut, meals out and other miscellaneous spending. (Say £200 a month).

Regular savers are in place to fund travel and travel spending money.

I also have a decent emergency fund.

I am mortgage and debt free. Full State pension from July 2024.

I do not use any special software but record information on an excel worksheet. Although I don’t really use any of its functions! It works for me.

Eco_Miser

RG2015 said:

This may be a slight change in topic but it is still budgeting.

Are there two extremes to the budgeting spectrum?

1. People who live from one payday to the next, thus needing to hold money back for their weekly spending needs.

2. People whose income exceeds their expenditure, who also have some savings, for whom payday is irrelevant.

For the group towards the 1st side of the scale budgeting is essential.

For those towards the other end, budgeting is more a long term planning exercise to make the best use of their money to serve their needs and aspirations.

  

Those are two cases, but most people I think will be in the middle - they have enough savings to cover the expenditure before the income arrives, but need to closely monitor that long term expenditure doesn't exceed long term income.

There are also those whose expenditure exceeds their income, but their savings are such that there is no problem, at least in the short and medium term. (And in the long term pensions will kick in to increase their income.) That was me for 6-7 years.