Budget

[big-mama]

What do you all think is a reasonable amount to have left over after all bills are paid and food and gas is purchased?  I have $500 left over and it evaporates every month.  How would you divide that up into buckets for other expenses like clothing, birthday gifts, and savings. I have nothing in savings and struggle with handling that $500. 

[beebalmmama]

We have only about $200 left over after bills and groceries. At the end of last year I had about $400 and I put $200 back each month. I was losing a baby I was keeping for childcare and wanted to make sure I wouldn't need that income to make ends meet. We also evaporated our savings to pay the midwife for birth the year before. 

I would put at least half of it in savings if I were you. I don't feel comfortable not having a savings and so that is where we are focusing right now. I know for us if it stays in the checking account it ends up being dwindled away. If I put it into savings it is much more difficult (mentally) to pull any money from there.

[sarafi]

That is really a hard question to answer, there can be so many variables.

What if you planned to save something really small (like $50/month) and just recorded what you did with the money that "evaporates" on you every month? Try this for a few months and you will likely see some kind of pattern :-) Maybe you have bills that you are not taking into account, or a particular weakness that is costing you money (People magazine for me )

Also, one of the best tips I ever got was to set up a small savings amount to be taken out automatically (like a bill) and slowly build it up over time. If you do this you will not "miss" the money and if you can keep it separate enough you really can build a little nest egg without really trying.

I guess my point is that you are clearly spending the money on something, maybe tracking will help you figure out how to set your individual goals

[gumshoegirl007]

I think it depends on what your priorities are.  We have $200 dollars left at the end of each month, however, we've already put aside funds for clothing, kids' activities, savings, retirement, household maintenance, charity, gifts etc as those are regular and recurring expenses.  We even allocate how much we'll spend each month on entertainment and general household expenses.  Once the money is gone from a pot in a given month, it's gone! 

Many of those items you mentioned above are regular expenses that you can plan for.  IMHO, they should be a part of your monthly budget.

[big-mama]

So do you have a separate account for clothing, one for kids activities, one for gifts, etc?  Thats the kind of stuff the money goes to and I just pay it out of the checking account.  I'm hoping to get an idea of, if I have 500 to use for these items each month, what are reasonable amounts for each category to set aside and do I use separate accounts for each. That sort of seems like a good idea in a way but a nightmare to keep track of different accounts, one is hard enough. 

[Callimom]

Originally Posted by big-mama 

So do you have a separate account for clothing, one for kids activities, one for gifts, etc?  Thats the kind of stuff the money goes to and I just pay it out of the checking account.  I'm hoping to get an idea of, if I have 500 to use for these items each month, what are reasonable amounts for each category to set aside and do I use separate accounts for each. That sort of seems like a good idea in a way but a nightmare to keep track of different accounts, one is hard enough. 

I agree with the PP to set up a separate slightly harder to access account for savings and having your employer or bank put a certain amount in there each pay. The standard suggestion is to save at least 10% of your net income but you can start smaller and work up to that.  I'd suggest starting at 5% which you probably won't miss and then increasing it to 6% after 3 months and keep increasing from there until you get to 10% within 12 - 18 months.

For the rest, what about moving to a cash system - either jars or envelopes and allocating a set amount (based on tracking your spending?).  For months you don't need it all you can let funds accumulate in the jars so that you have extra available to buy winter clothing, or spring shoes etc.

For our family for example we put $250 aside each month for activities/education which pays for my kids sports, homeschooling activities, some memberships to places like the museum, curriculum etc.

We only set aside $50 a month for kids clothes and gifts. We're fine with thrift store shopping and not having too many clothes so we want to keep this category low.  I make most of the gifts we give to friends and family.  I'd rather have more money in my fabric and yarn addiction jars - lol.

I really like the budget resources here

Good luck

Karen

[OkiMom]

We have 100-200 over every month but my budget includes things like clothing, savings, tithing/charity, gifts etc. Since they come up on a regular basis its included in the budget as is a small amount of spending money for each person and a small budget for schooling supplies/other items for the girls.

[annethcz]

I agree that I think the best way to figure out how much you should be budgeting for each category is to record your spending for a month or two and see where that money is going.  Once you've done that, you can decide if your spending is reasonable or if it could be reduced, and go from there.

What I spend on clothing, gifts, household items and savings may not apply to your family.  If you have babies, it might be totally reasonable to assume that you can find relatively inexpensive clothes at thrift stores that are in good condition.  But if you have a 10 year old boy, that assumption might not be so reasonable   Same thing for gifts- are you at the stage in life where all of your friends are getting married?  Are you the parent of elementary-aged children who are frequently invited to friends' birthday parties? 

I will say that I think the PPers are right on the money when they suggest saving BEFORE spending.  You can't spend what you don't have.  Have money automatically deposited to a savings account or transfer it manually to a savings account at the beginning of the month. 

[lmonter]

We have nothing leftover.  Sounds weird, right? 

We do a zero-based budget. 
Every. single. penny. is accounted for. 
Well, within a few dollars. 

We expect to spend X amount on homeschool supplies (that tends to carry over until I need to buy/find something), X amount on life insurance, X amount on the mortgage, X amount into savings, etc. 
We include all the "unexpected" things like the yearly life insurance and Christmas and birthday presents and car maintenance/repair in our monthly budget so when those things come up, we're ready and waiting with a check.  You know, the things that would have us scrambling and figuring out which bill to put off until the next paycheck before we got better with our finances.  Now?  It sure sucked having to put a new transmission in our van.  But we paid our nice transmission guy with a check without draining our account or using a credit card, and floored most of hubby's old paycheck-to-paycheck (dual-income to boot) coworkers - they didn't know what to think of us. 

[gumshoegirl007]

Originally Posted by big-mama 

So do you have a separate account for clothing, one for kids activities, one for gifts, etc?  Thats the kind of stuff the money goes to and I just pay it out of the checking account.  I'm hoping to get an idea of, if I have 500 to use for these items each month, what are reasonable amounts for each category to set aside and do I use separate accounts for each. That sort of seems like a good idea in a way but a nightmare to keep track of different accounts, one is hard enough. 

We have 6 accounts between us in total, but it works for us, and you can totally make this work with fewer accounts. 

• 2 of the accounts are personal spending accounts - 1 for me and 1 for DP.  At the beginning of each month we deposit a bit of "mad money," which are dollars that either of us can spend on whatever we would like without having to account to the other person (work lunches, coffee, etc, essentially things that are personal wants). 
• 1 account is where our pay cheques are deposited.  I like to have a month's worth of salary in here.  So for example, at the end of January, I have all the money that we'll need for February at the beginning of February ready to transfer.
• 1 account is where all of our automatic household bills and payments come from (i.e., mortgage, insurance, hydro, cable). These are our fixed expenses and this account always balances to the penny;)
• 1 account is where the other household dollars are deposited for things like groceries, bus passes, entertainment and general spending (we use excel to track how much we spend in each of these categories so we know where we are at any point in time during the month).  This is our variable expenses and I have to sometimes "borrow" from one category to get the entire month to balance.
• 1 account is for all of the other budget items that we'll spend over the course of the year, but not necessarily monthly (i.e., clothing, retirement savings, emergency savings, kids' activities, charity/gifts, household improvements/slush fund, which we again track using excel).

The system was a little bit intensive to set up at first, but now it really works for us.

[big-mama]

This sounds like the kind of thing that might work for me IF I can keep all the accounts straight as to which one is for which expense lol and not accidentally use the wrong one.   

Originally Posted by gumshoegirl007 

Originally Posted by big-mama 

So do you have a separate account for clothing, one for kids activities, one for gifts, etc?  Thats the kind of stuff the money goes to and I just pay it out of the checking account.  I'm hoping to get an idea of, if I have 500 to use for these items each month, what are reasonable amounts for each category to set aside and do I use separate accounts for each. That sort of seems like a good idea in a way but a nightmare to keep track of different accounts, one is hard enough. 

We have 6 accounts between us in total, but it works for us, and you can totally make this work with fewer accounts. 

• 2 of the accounts are personal spending accounts - 1 for me and 1 for DP.  At the beginning of each month we deposit a bit of "mad money," which are dollars that either of us can spend on whatever we would like without having to account to the other person (work lunches, coffee, etc, essentially things that are personal wants). 
• 1 account is where our pay cheques are deposited.  I like to have a month's worth of salary in here.  So for example, at the end of January, I have all the money that we'll need for February at the beginning of February ready to transfer.
• 1 account is where all of our automatic household bills and payments come from (i.e., mortgage, insurance, hydro, cable). These are our fixed expenses and this account always balances to the penny;)
• 1 account is where the other household dollars are deposited for things like groceries, bus passes, entertainment and general spending (we use excel to track how much we spend in each of these categories so we know where we are at any point in time during the month).  This is our variable expenses and I have to sometimes "borrow" from one category to get the entire month to balance.
• 1 account is for all of the other budget items that we'll spend over the course of the year, but not necessarily monthly (i.e., clothing, retirement savings, emergency savings, kids' activities, charity/gifts, household improvements/slush fund, which we again track using excel).

The system was a little bit intensive to set up at first, but now it really works for us.

[gumshoegirl007]

Most of the time it's quite easy - if the account has no money, it's likely DP's.  If it has some money, it's likely mine.  If it has a lot of money it's the one where our pay cheques are deposited

Originally Posted by big-mama 

This sounds like the kind of thing that might work for me IF I can keep all the accounts straight as to which one is for which expense lol and not accidentally use the wrong one.   

Originally Posted by gumshoegirl007 

Originally Posted by big-mama 

So do you have a separate account for clothing, one for kids activities, one for gifts, etc?  Thats the kind of stuff the money goes to and I just pay it out of the checking account.  I'm hoping to get an idea of, if I have 500 to use for these items each month, what are reasonable amounts for each category to set aside and do I use separate accounts for each. That sort of seems like a good idea in a way but a nightmare to keep track of different accounts, one is hard enough. 

We have 6 accounts between us in total, but it works for us, and you can totally make this work with fewer accounts. 

• 2 of the accounts are personal spending accounts - 1 for me and 1 for DP.  At the beginning of each month we deposit a bit of "mad money," which are dollars that either of us can spend on whatever we would like without having to account to the other person (work lunches, coffee, etc, essentially things that are personal wants). 
• 1 account is where our pay cheques are deposited.  I like to have a month's worth of salary in here.  So for example, at the end of January, I have all the money that we'll need for February at the beginning of February ready to transfer.
• 1 account is where all of our automatic household bills and payments come from (i.e., mortgage, insurance, hydro, cable). These are our fixed expenses and this account always balances to the penny;)
• 1 account is where the other household dollars are deposited for things like groceries, bus passes, entertainment and general spending (we use excel to track how much we spend in each of these categories so we know where we are at any point in time during the month).  This is our variable expenses and I have to sometimes "borrow" from one category to get the entire month to balance.
• 1 account is for all of the other budget items that we'll spend over the course of the year, but not necessarily monthly (i.e., clothing, retirement savings, emergency savings, kids' activities, charity/gifts, household improvements/slush fund, which we again track using excel).

The system was a little bit intensive to set up at first, but now it really works for us.

 

[GirlBoyGirl]

This was a really interesting thread, especially since I have been trying really hard to make and stick to a budget. But our expenses used to exceed our income so it seemed pointless and depressing to even bother but yesterday I went back to work since having the kids and now we actually have a bit left over and I would like to create a budget. I get messed up with all the little things you buy and have a hard time finding a category for them, but this thread helps a lot. I'm hoping we can find a system that works for us!

[tonttu]

The thing that worked best for me , being the scatterbrain that I am , was to carry a little notebook with me EVERYWHERE and I would write down everything I spent , every single penny , even a pack of gum for 50 cents . I couldn´t believe after a while , where all I spent money and how much of it !

That really helped me re-evaluate my spending and actually practise it to this day , very successfully , I don´t have the problem  anymore that I´m fretting over where that last 50 in my wallet as disappeared to