Jan 07 2008

BBC #1: My responses

Thanks to all of you who are participating in the first Better Budget Challenge so far! I really appreciate it. There’s still plenty of time to join in, if you’d like.

Here’s my responses to the questions I posed in the challenge:

1. How have you used a budget in the past? Be specific. How did you set it up? Did you use a spreadsheet? Pen and paper? A software program? What are the nuts and bolts of how your budgeting system(s) worked?

In the past, we’ve tried using simple Excel worksheets and the Microsoft Money software. We entered our account information and tried tracking it from month to month, or as we made purchases.
2. If you’ve never had a budget, how have you made decisions on how to manage your household finances?

N/A

3. How did you put your budget to work? Did you use a cash envelope system every month? Track your expenses and purchases in a database of some kind? How did you do it? How many people (i.e., you and your spouse) participated in that budget?

When I was single, I used a spreadsheet to keep track of my bills and when they were paid. That worked well, until I let myself get distracted from it, and got off track.

A few months ago, my husband and I started using Microsoft Money to track our expenses and categorize things. It sort of worked, but I found it to be way too complicated for me.

4. In what ways did your budget (or lack of) work for you?

My spreadsheet helped me make sure all of my bills were paid on time, and that was helpful.

5. In what ways did it fail?

I stopped using the spreadsheet to keep track of my bills (and I can’t remember why). It was easy, but I just stopped putting in the numbers. I was lazy, I guess.

Also, my budget didn’t effectively help me manage my flexible spending habits. I selected arbitrary numbers on my budget, and there was really no rhyme or reason as to how those numbers came about. I quickly got off track from that.

6. Think about your past experiences with budgets and your home finances. How do you want to use a budget in your personal finances? Do you want a system that you update every time you make a purchase? Every month? Do you want to have spending guidelines?

I want to find a money-managing system that really works for me and my husband. I want it to help us achieve our financial goals, while being simple enough for us to continue using long-term. I will probably need to continue exploring budget methods until we find the best match for us, since we’ll probably just have to use trial and error until we find it.

7. What is your overall purpose in establishing a household budget? What do you hope to gain from it? Do you want to get out of debt? Have money to save or invest? Reduce your expenses? Have a better idea of where your money is going?

We want to cut our living expenses even further to make room for our financial goals: Establishing a large emergency savings fund and aggressively saving to buy a house.

8. Anything else you want to mention about your past or future budgets? I’m willing to keep trying until we find something that works for us.



4 Responses to “BBC #1: My responses”

  1. We use quicken to track all of our expenses, but we have found (through many years of marriage :) that the easiest and simplest thing we could do is to set up a cash amount that we each get per week–

    For example–my husband gets $50 and I get $200 a week–the only thing we debit is gas for our cars.

    So basically we take out $500.00 every 2 weeks–I buy food out of this for a family of 6, all clothing, toiletries and anything minor and misc.–such as say my kid wants to order a book from scholastic or I decide to join a friend for a cappacinio, or my kids need money for a class project–what ever–this is what I try to stick to.
    Now you see why I get 200 and he only gets 50–he simply buys an occaisional lunch out at work –I really buy all his clothes and so forth so he simply does not need that much on him. Most of the time he has money left over.

    So anything that we have left over after bills goes into savings down to a set minimum we like to keep in our checking.

    We have found this to be the simplest thing. It keeps us in check on how much we are eating out, how much “stuff” we are buying.

    Right now my goal is to shave off my amount spent on food–so I can have more to spend on say clothes!

    This tip came from my inlaws–they just keep a set amount of cash in a drawer in their house, when it is gone, its gone–that is their philosophy and they are debt free–including their house–they paid it off in less than 12 years!–I am sooo jealous!

    Well, sorry so long, but I thought I would share this budget idea with ya!

  2. We use a custom Excel spreadsheet to manage our budget and all our investments. We back that thing up nightly – we’d be lost without it!

  3. We are still struggling on this topic and we have been married almost 2 years and have a baby! In some ways I see the point of a budget but, it always falls through for us. Great post

  4. We have a budget that we follow and we have certain amounts that we need to spend on things, like groceries or eating out for lunch while I’m at work. The thing is, we don’t have time to be continually be checking what we’ve been spending online to see if we’re in our budget or not. So most of the time we usually spend more than we wanted too and many months don’t have anything extra left over to save.

    I like you’re idea a lot! My wife has trouble sometimes keeping track of all the groceries we get, and I know I haven’t been good about tracking how much I’m eating out at work.

    Buuut…if we took out cash for those amounts like you mentioned that would make it much easier!! And it would be obvious if we spent more than we wanted…because there’d be no cash left! Thanks for the excellent idea…

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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