How We Budget and I Want To Know What Works For You!

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?

Enjoy Plunged in Debt?

Pid

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Comments

  1. We budget monthly, and I get paid semi-monthly, so it makes it easy. We also use YNAB to maintain our budget, which is awesome software. And this year, for the first time in my adult life, all our monthly bills are due at the beginning of the month, which makes paying bills and tracking stuff VERY easy. Here’s to budgets!!

    • Echoesbleeding says:

      My husband and I also took up YNAB in 2013 and are on track, staying within budget and paying off debt at a fast pace for the first time since we’ve been together. (5 years) It’s an incredibly freeing feeling.

  2. I switched over the Mint.com for about 90% of my budgeting as of late. I’m starting to see some areas where it’s lacking, but have enjoyed it overall. We are a month ahead, so all the money is there at the beginning of the month, I pay all bills right away, and they use what’s left over for gas, food, etc. Since we’re on a tight budget, it’s really those variable expenses we have to keep in check to make it through.

  3. I budget monthly and I’ve got a lovely spreadsheet to help me do so. My bills are exactly the same each month so it’s fairly easy to allocate the remaining amount to groceries, personal care items and debt repayment. I get an occasional bonus each month which varies and I normally put it towards debt repayment or my travel fund. I am still in the process of tweaking my budget around and trying to make savings wherever I can so it does vary a bit from month to month which I think is only natural with any budget.

  4. I’m not too crazy about my budget. But I do crunch my numbers once a week, usually on Sundays. Because it’s just me and I have minimal expenses, I just have a general knowledge of what I’m spending money on. I also immediately move a percentage of my pay check into savings before I do anything else. I’ve tried spreadsheet before and I’m not great with keeping up with it. But once I add other people into my budget, then I will probably be more on the ball about writing out every little expense.

  5. I use a similar system, in excel, to budget and project into the future (Currently projected into March, 2014). But I do it on a monthly basis, so I can use my two extra paychecks per year towards debt.

  6. I budget monthly and basically, just keep a simple spreadsheet of how much I’m allocating to each category and how much I’ve spent already. I actually started to use Mint recently though and I’m liking it – it basically does everything I do in a spreadsheet but automatically.

  7. I live by my spreadsheet as well. I divide all my income into percentages based on T Harv Eker’s Millionaire Mind system. 55% expenses, 10% savings, 10% retirement, 10% education, 10% play, and 5% giving. It’s worked out well for me, though I bought a new laptop over the summer and it’s caused my expenses to dip into the negatives for quite a while. I may need to take some money from education or giving to even everything out.

  8. hey Catherine,
    We budget using the excel budget spreadsheet that we developed almost 2 years ago now and has evolved since that time. We document every penny we spend and for some they may think that is tedious but it has helped us to get where we are today, debt free including the mortgage. I always say to do what’s best for you and not every budget fits one size so keep looking for the right budget or design your own like we have. We will continue to budget because that is the only way we know how well we are doing and whether we need to make changes to our lifestyle and habits. Cheer Ps I’d tweet but I can’t tweet anyone with shareaholic. Something is wrong and apparently they are working on a fix at shareaholic. Not sure if it’s because I’m on windows 8 or not. Just started yesterday. Cheers mate

    • CBB, they fixed Sharaholic today – or at least that’s what they emailed me. I’ve been having good luck today. They said to Clear Your Cache if you’re still having trouble.

      Catherine, we have a monthly budget which stays basically the same. Since we both teach lessons, we vary slightly in month to month income but not too much. We have our retirement and savings automatically transferred to those accounts from our checking. We also have an emergency fund for any of those fun things that creep up. I don’t use a spreadsheet.

  9. I get paid bi-weekly, but budget monthly.

    It works fine for me because my main goal is trying to keep expenses as low as possible to send any excess to debt repayment.

    I guess in those rare months when I see three paydays, my results will look crazy, but that’s not a bad thing 🙂

  10. Most of the times I budget on a weekly basis on a simple spreadsheet. Well, haven’t budgeted for long though so am yet to incorporate projections into the future and all, something am working on.

  11. Your budgeting technique looks a lot like Vonnie and I’s. I create a document for each month that lists our income and ALL of our recurring bills – as well as what date they’re due. That way I can mark “PAID” next to them as we pay them. This allows us to look at our income/expense statement from a monthly view. Then, we break our budget down into bi-weekly periods (which corresponds to the pay cycle of my software engineer job). We write on a gigantic calendar all income coming in, as well as expenses going out. Then, on another page in the document we breakdown income vs expenses for that bi-weekly period ending up with how much discretionary funds we have.

    We have budget discussions on Thursday (pre-weekend) and Sunday (Post-weekend) to ensure we’re on track and on the same page.

  12. We use a monthly zero sum budget because that’s how my brain works! It works great because you basically “spend” all of your money on paper when the month begins.

  13. My budgeting is similar to yours except I divide them up weekly. It’s easier to tweak things and stay on track for me. I don’t separate out all different catergories. I just have a set amount for the week including groceries, gas, and mics. and try to stay within that amount. Left over either carries for for an upcoming expense or to pay down debt. I do it in excel and I have it planned out until mid 2014.

  14. MomofTwoPreciousGirls says:

    Winging it right now…I know, I know! We have been trying to get a month ahead and I think we are there for October!

    Biggest blessing in our financial world is that we both get paid every other Friday, BUT we get paid opposite weeks. So we have income coming in every week. We also each have one week of just base pay and then the second week we both get bonuses. Lastly, that means we have FOUR months a year with “extra” paychecks! That is one reason we were trying to get ahead with what we average for a monthly total, since it can fluctuate a bit each month.

  15. I currently have a monthly budget and a weekly budget, because I get paid weekly.

    When I start my new job, I’ll be paid on the 1st and 15th. I haven’t sat down to actually figure out the cash flow situation when it comes to my budgeting, but it’s going to be an interesting adjustment I think.

  16. I don’t actually make a budget. I do keep track of all my spending in a spreadsheet. I’m saving 50% of my income which I don’t think would change if I actually made a budget.

  17. My employer recently changed our pay to the 15th and 30th of every month. Before it was bi-weekly and budgeting was a nightmare! With set pay days, life is so much easier now. I too use a spreadsheet, but it is much more basic than the one you describe.

  18. There are really different techniques in creating and maintaining budgets. However, your pointers are very useful. They can serve as guide to many consumers. Actually, these can work for a lot of people. It takes patience and self-discipline so we can all start with said suggestions.

  19. We use You Need a Budget, which encourages you to spend “last” month’s income this month, so especially in your case where you have varying income, it’s useful, because it doesn’t matter what your income is *this* month, but what you’ve already earned (and in the bank!) last month. That means you can pay your big bills as they come in rather than timing them to paychecks. It takes a while to build up the “buffer” to be able to do that, but it also means you have a built-in one month emergency fund. Totally worth it.

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