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?
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.