There is no single right way how to budget. Here in the PF world we spend a lot of time talking about budgeting but not necessarily how we budget. One of the things that interests me the most about money, and blogging, is how people handle their money. I don’t necessarily want to know personal details about someone’s budget but I’m interested to learn what works for other people.
How We Currently Budget
Currently, hubby and I budget bi-weekly, months at a time. I have our budget done until middle of January 2014 in two-week blocks. We’re both paid the same day bi-weekly. Though I like having two months per year with ”extra pays”, I really wish we could switch to a bi-monthly pay scale since I feel that our financial lives would be much easier to manage. Unfortunately though, this is nothing I have control over.
Bi-weekly pay periods mean the pay dates vary which can be annoying when it comes to budgeting and aligning bill payments. Since we’re both paid hourly (though in hubby’s case he’s on a hybrid, guaranteed ”set number of hours per pay period” system) our budget is based on an estimate of what we will make. Annoying, since especially in my job, shit happens (like patients not showing up or me running really late) and my pay can vary quite a bit which means I’m scrambling to adjust our home spreadsheet.
I’m intrigued about being able to budget monthly. Since we budget bi-weekly, I organize everything bi-weekly including stuff like grocery shopping. Every two weeks we get approximately $200 for groceries, which a few months per year is more than $400/month. Though we get our ”free pays” it’s not truly free since we have bi-weekly bills. If we were on a true monthly budget, these extra pay periods, as long as our pays continue to be bi-weekly, would essentially be non-accounted for income.
My Life-Saving Spreadsheet
I have a spreadsheet that my husband made with our varying two-week blocks organized in such a way that as I change my numbers, the change in funds follows through as far as I have the budget completed to. For example, if I estimated I was being paid $1500 next week, but was actually paid $1450, the $50 discrepancy would follow through from now until January in all calculations. This spreadsheet keeps me sane and I like being able to see where we should be in upcoming weeks/months. I like that I have the ability to play with numbers and see how everything will be effected.
So tell me friends, how do you budget? Comment, e-mail or tweet me what works for you. Though our spreadsheet works well I don’t feel like it’s a perfect. I feel, especially with our (my) varied income we still let money slip through our accounts. Could I make a monthly budget work? How would I switch my systems without screwing my bills up?