young couple needs help with the mechanics of living within a monthly budget

There has to be a good way to do this. We’ve been trying to come up with and live within a monthly budget down to the penny to ensure not living beyond our means and not worrying about money, but I’m finding that the mechanics of keeping track of the money is a big pain in the butt.

How do you do it? Excel? Quicken? Some other computer-aided way? Ideally, I’d like to somehow be able to put “monthly income” or “starting budget” in one place, then create “allowances” (Rent, Electricity, Food, Gas, etc.) for fixed-montly necessities, then when each is paid, I tell the program that it’s paid and the $$ is subtracted from the starting budget, so that at any time I can see what our remaining monthly expenses are in $$ and what our remaining budget is. That way, I can allocate some $$ from the starting budget to things like “entertainment” when money is spent, and see how much $$ for the month is remaining for entertainment, or whatever.

Basically, I want to use something better than a pen and paper to keep track of where the money’s going.

Help!

There is a system called the “envelope system” that helps you get started. Also zero balance budgeting helps too. There are alot of methods out there. Ultimately, you will find one you like.

My husband got laid off right after I bought a new car, desperately needed money management advice and found Dave Ramsey. Getting control of it now when you are young will help you every day of your life later.

Does your bank offer access to your account online? If not, you might want to switch to a bank that does.

At my bank, I can view my balance and statement any time I choose. I can also transfer money between my two accounts, and set up all my payments. For those that accept electronic transfers, they payments go through immediately. For those that don’t, my bank will print and issue a check and mail it to the address I indicate.

Also, I can export all of my account information to excel, which we use to make our monthly budget. You can use formulas to calculate how much of your money is being spent in each area (housing, food, entertainment, etc.).

I would suggest tracking your spending for at least two months, either through printed statements from your bank or accessing your account online. See what percent of your budget is being spent on what, and compare it to an ‘ideal personal budget’. You can find guidlines online, but I believe the basic % for rent/mortgage should be no more than 35%, etc. See how what you’re spending stacks up, and that will tell you a lot about your financial situation.

Once you see how much of your money is going where, you can figure out how to split up the excess. Budget out everything including savings and only then take whatever is left and split that out for weekly entertainment spending.

Firstly, get as many payments set up by whatever method necessary to go out straight after payday. It’s much easier, psychologically, to budget with money that’s actually there to be used than with money that needs to be held onto for bills. (I get paid on the last day of each month…on the first, my rent, and most of my utilities, all get paid)

Secondly, agreed with the recommendation to use online banking. I find keeping very regular tabs on my money much more useful than setting myself targets of what I’ll spend on groceries, etc., over the coming weeks. The latter only works for really organised people (the kind of person who never runs out of chicken stock, as I did mid-curry-cooking earlier today). And if you’re asking for this advice, you’re not one of them :wink:

Thirdly, forget the idea of a budget which allows X amount of money for each item and nothing else. It doesn’t take account of changing moods (maybe you might feel

Ohhh, didn’t finish editing my ‘thirdly’,…but I think the essence is there :stuck_out_tongue:

You can do it with Excel. Write down every single bill you have, and then sit down and think real hard about all the incidental daily expenditures (and don’t forget gasoline). You’d be surprised how much money you can piss away at a vending machine in a week’s time!

FIgure out what you can live without, and try to save something every single week. Even if it’s only $10, you’ll be so glad you have it when the chips are down. And they WILL be down periodically. Good luck! It’s a real feeling of satisfaction when you get this thing rolling for a few months and you start working the kinks out of it.

I used to use Quicken, but I found that after a while I didn’t really care about keeping track of our spending in every little category. Now, I just use an Excel spreadsheet to track spending in three categories: bills, basics, extras. Bills are things like rent, utilities, phone, etc. Basics are things which can vary from month to month, but aren’t really optional: groceries, gas, etc. Extras are everything else, usually anything that doesn’t have to be purchased that month.

Both the bills and basics categories tend to be about the same for us every month, so I start with a rough idea how much we should have leftover for extras. Extras are also the category I track the most closely during the month, as that is where the greatest fluctuations can occur. I find the trick to not overspending is to have a minimum amount budgeted for extras every month which, if you don’t spend, gets saved in a separate account as fun money. It take discipline, but once you have a few transfers to the fun account and can start thinking of the neat things you can do with that money, it makes it easier to forego some of the small daily extras that tend to add up.

None of this would work without a good online banking system, though, as you really need to update every few days to stay on top of things.

Do you get paid monthly? If not, you should try to do a weekly or bi-monthly budget. It’s much easier. Just split the monthly bills into 2 or 4 parts. Each pay period, you put the money that you’ll need for each monthly bill, into it’s own category. Just forget that you have it. If you don’t think you can leave it alone, put it in a savings account. That way, your paycheck doesn’t take such a huge hit.

Chances are you have a reasonably limited number of regular bills.

In terms of setting a budget, take the average amounts (based on history) and build a monthly/fortnightly budget based on these.

In terms of managing your daily finances, each time you are paid, work out what bills need to be paid in that pay period, what upcoming large bills need to have money set aside for them, and then get the remaining cash out for everything else. Having cash in your wallet is the best way of always knowing how much money you’ve got left.

Hope that helps!

You might try Pear Budget. It’s an Excel workbook you download and follow the instructions to.

In short, you enter an estimated budget in three categories: Fixed expenses (rent, utilities, car payment…things which are generally the same from month to month), Variable expenses (groceries, gas, restaurants…things which you can cut back on if need be, or spend more on if you’ve got the money), and Irregular expenses (car repairs, gifts…things you might have an idea of how much they’ll cost you over the course of a year, but which don’t come up at regular intervals).

You tell the spreadsheet how much to budget in each of those areas per month on a main screen. There’s then a tab for each month. Within each month, you enter your expenses under the appropriate category, as well as your income, and the calculations are all done for you: Total income, total expenses in each category, what’s left in the budget for each category, total money left, and tons of other stuff. It’s pretty much just “filling in boxes,” so it’s not too hard to do…just takes discipline to enter in all your stuff.

Oh, and it’s free. Check it out.

I use an Excell spreadsheet I downloaded off a free site and modified. I like it much more than Quicken or Money because I can customize it and it’s a lot more transparent.

At the top of the spreadsheet, I have all my income sources with a running total and at the bottom are my expenses broken down by categories. At the left, I have running totals of my budget and of what I’ve actually spent as well as the difference. I save my reciepts for any purchases I make, enter them the next morning and then balance it with my online checking account. I use different color to denote transaction that have been approved or that have cleared. I also pre-enter my fixed expenses like rent, student loans, ultilities on the approximate date they’re due.

I find it difficult to budget by month because I’m paid every two weeks. So I think of my expenses by paycheck. First check has to cover rent and student loans, second check covers utilities, creditcard payments, and any big expenses. At the bottom of the spreadsheet, I track my credit card balances, credit limits and percent utilization.

I could probalby do all this stuff automatically but I really lke being able to see it all laid out in a spreadsheet and I think having it slight less automated makes me think more about what I’m spending. BTW, if you’d like to see a sample spreadsheet, I’d bee happy to mail you a copy.

I made PearBudget. I think it does exactly what you’re looking for, and it’s free. As Garfield226 mentioned (thanks, by the way), it’s an Excel spreadsheet (works in any spreadsheet program) that you set up and customize to your needs.

You can see some screenshots of it here: Flickr photos of PearBudget

It’s free (yay), and is the groundwork and (sort of) proof-of-concept for a web-based version that I’m working on now. The web-based version will be a good deal different in execution, but the basic budgeting concepts are the same.

If you’re looking for a link to the spreadsheet, here you go: PearBudget | Easy budgeting for everyone.

Microsoft Money saved my hide when I was living a lot closer to the edge than now.

I really like the cash flow projection feature. It takes your upcoming scheduled bills/deposits and your budget and graphs them out so you can see if you will be going into the red. You can play around with your budget until you stay in the black consistently. Then when you are considering a purchase you can see how much it will affect your cash flow.

One other thing that really helped me was what some money managers call a Freedom Account. You find the infrequent-but-necessary expenses (auto insurance, deductibles, and maintenance, for example) that would put you into debt if you had to pay them right now, and set up a separate account that you transfer a small amount into each month or each week to cover them when they arise.

Say you know that you’ll need $500/year for insurance and you spent $300 last year for maintenance. Put $16 into an account each week and when the expenses hit you you won’t have to use your credit card or go without food just to keep your car.

An online bank like ING or Emigrant is great for this because the money isn’t instantly available to fritter away, but it is still accessible on short notice. Plus, if you only need the money 2x/year it’ll earn interest.

That website has a good excel spreadsheet to help you get started.

budgeting is no fun, but there are a lot of good tools out there to help. Good luck

I use the free Expense program that came with my Palm. When I buy something I pull it out of my pocket and put down how much money I just spent.

I’m pretty sure Quicken can do all those things for you, but whenever I try to use it I never get around to maintaining all that crap.

Clark Howard’s books and radio show are a great resource for soaking up money-management truisms, BTW.

His message boards are a good place to look for advice, too.

Is the user name based on a book I’m not aware of, because ‘stohelit’ sounds just like ‘stole it’ in the dialect not too far from where ai was brougth up?

Susan Stohelit is a character from Discworld.

I believe she is Death’s adopted daughter in the series.

And not to hi-jack, but THANK YOU!
I just downloaded it and screamed.
It looks like someone went out and re-did my personal system, but with a summary page and pretty colors.
I’d use Pear, but I combine my budget and my account ledgers onto the same big, nasty spreadsheet, so I can’t do the Pear. Nonetheless, that is AWESOME.
Welcome to the Dope!

VCO3,

Read the Dave Ramsey book. You can choose to be more liberal than him, but if you follow his guidance, you will NOT go broke. As far as I can tell, he is the only ethically sound financial planning personality out there.
If you want to use the Dave Ramsey technique, this site:
http://fpu.chuvala.com/
has some spreadsheets worth looking at.

Funny, Dave Ramsey breaks one of my fundamental rules for ethics - don’t use Jesus to sell stuff. Good financial planning works if you are a Christian or a Buddhist or an Atheist - Dave Ramsey’s personal religion is not relevant - except he uses it to pitch to other Christians. I - who am not Christian - find that blasphemous.

Eric Tyson is pretty ethically sound - I don’t think you can do better than “Personal Finance for Dummies” if you need one book. Suze Orman is well liked by a lot of people. I’m not a David Bach fan, but what he writes speaks to a lot of people.

And how exactly do you know that, Mr. Slant ?

Are you some kind of … lawyer? :smiley: