Originally Posted by trekkingirl
thanks for the links mytwoas
I guess I'm still lost about making the budget. I can write a list of all my bills and the totals fine. But what about everything else? How do I know how much to budget for gas, food, little things that come up like holidays, and everything inbetween? For example if I budget $400 for food but run out of meals and have to shop again? Do all these variable categories have their own checking account? If not, wouldn't they dip into eachother? Also I get paid every other thurs and DH gets paid every thurs so in the beginning of the month we don't even have the funds yet. Does that matter?
I did see the budget form in the back of the book but it didn't make any sense to me or DH.
if you budget x amount for fuel how do you know if you've met that number? Since I haven't been able to work out a budget I have really only bought gas and food and paid my bills. Anything left in the bank when the next check comes I dumped into emergency fund. Is that a bad idea?
The first step to budgeting is actually just tracking. Some people, who don't have an urgent need to restrain their spending, merely go about their lives for a month and just track every dime they spend. Then they can examine it and say "wow, I can't believe how much we spend on ____, we can definitely improve that."
But if you have an urgent need to restrain spending immediately, you can also draw up a budget the best you can, and adjust it from there. If you find that you simply can't keep your groceries within $400, then you will just have to adjust it - but you would want to at least try to keep spending down. After a month or two you can get a pretty good feel for your usual needs for gas, food, etc., and see where your holes are. Obviously gasoline to commute to work, for example, is not really negotiable; but by virtue of tracking and budgeting your fuel you may start combining shopping trips or thinking twice before driving 30 minutes to a restaurant, etc. Awareness goes a long way all by itself.
Categories - you have some options. I'm sure some people have separate checking accounts, but that seems excessive to me. Another option is the cash envelope method - take out the amount you need for a category for a month (or week, or pay period, whatever) and put it in an envelope. Depending on your lifestyle and needs, you can put the envelopes in your wallet or purse, or you can keep them at home and just pull them out as needed. You will know exactly what you have at all times. Another option is to record your spending in some manner - the old "keeping the books" method. So all the money is in one account but you write down that $400 is allocated to food. You spend $75, write it down, and note that you have $325 remaining.
A very convenient method is www.mint.com. It's a free budget application, and it's a godsend for me because I don't have to go crazy recording everything, and my husband can spend money without reporting it to me. If you set up your accounts (checking, savings, credit cards, mortgage, whatever) then the system will record all your transactions. You cannot MAKE any transactions whatsoever from mint (so nobody can hack your accoutn and move money around) - you can only SEE them. So when DH goes to the grocery store and spends $41.02 with the debit card, as soon as it posts (within hours in most cases, sometimes within minutes) I see the transaction. I have a Groceries budget category and this transaction will automatically go into it. I'll see a bar graph showing how much I have allocated for the month vs how much I've spent. So I know exactly where we are every single day. There's even a line showing how much money would be spent as a percentage of how far into the month we are (so if we're halfway through the month, we should be about halfway through the budget for the groceries category).
As for your method of how to save (at the end of the month, save whatever is left over), a lot of people say you should pay yourself first. And there is real merit to that advice, but it assumes you have a decent amount of disposable income. So if you're blowing $200 on lattes (this is the standard example for things people throw their money away on) then you should really just save that and forget the latte habit. Some people indeed look at a bank account and think "hey, we have enough, let's just go out to dinner tonight." It's better to just save the amount right off the bat so that it's not tempting you. For me, this isn't the case; we don't spend our money on any extras. So I do indeed just get through the month and whatever is left over gets put into our sinking funds and emergency fund.