I’m a money nerd. Not the kind of money nerd who can do her own taxes (we itemize and have some farm stuff), but the thrifty, stingy, frugal kind of nerd… I just don’t much care to spend money. Never have. I still have my junior high ledger (told ya, nerd) in which I recorded every babysitting dime I earned and every penny I spent on gum. When I bought my first car early in my teaching career, I paid off the 5 year loan in 1 1/2 years. I abhor interest payments.
So, is now a good time to admit I’ve never lived with a written budget?
Seriously.
Even though it’s always worked out fine for us (we have no debt aside from our mortgage, and we’re currently doubling those payments to get it paid off in three years), we can’t help but wonder if we could save even more if it were all written down. One of my new year’s goals is to nail down a specific budget. I even have some really cool software, You Need a Budget, that I won last spring from Keeper of the Home.
We’re giving it a go, but I have to tell you… I’m struggling. This whole “zero balance” thing has me squirming. Assigning every dollar a job. I’m sure there is value in that, and I’m hoping that once I have a few months of recording our spending under my belt it will all make more sense.
For now, however, I can say that I’m so glad to know what I spend on groceries each month! In January it was $288.15 and in February, $270.06. That is for food only, and we don’t buy beef at the store. So, tack on an extra $5-8 per week for beef, and I think we’re doing really well. I cook mostly from scratch, buy natural peanut butter, no margarine, etc. (I’m not willing to lower our food costs if we have to sacrifice food quality… and I’m working hard on that whole quality thing.)
Since I’m a budgeting beginner, I’m not sure that I have any fascinating tips, other than “don’t spend money.” Enlightening, I know.
Do you have some budgeting advice for me? I want to make this work, but I’m thinking I need to figure out a few months of what we spend so I have a good average to work with. Is that right?
Any other nerds non-budgeters want to come out of the closet? Maybe we can work on this together.
Be sure to visit Phoebe for budgeting ideas, and slip over to FishMama’s place where she is hosting her first Frugal Friday.
I’m a lot like you. I never have a written budget, but I really watch what I spend. I like good, quality food. And I think running all over to save a few pennies here and there doesn’t make sense.{I know a few people that do this.} Sorry, I might not be that helpful, but I admire you trying to tackle your budget!
~Kim
I don’t budget. We don’t have any debt either. I think we may save a little more if I could budget our groceries ect. but I just don’t think it fits our situation very well. We live very far out and don’t get to a grocery store on a regular basis. We too have a freezer for beef and pork because we raise both. That really helps. I try to coupon, price match, and stock pile as much as possible. But I just can’t get myself to have a strict budget! I just can’t do it yet.
Good luck in your journey!
Your comment that you don’t want to lower your quality is exactly what I think a budget is about. I take “what I spent” and go from there. If it is important to have organic or certain foods then that is where you figure out what it costs and plan for that. If you LOVE movies then you may put your money into cable movie channels or Direct TV- where someone elso cuts those services out to budget for what is important to them. That is why it is YOUR PERSONAL budget, you don’t have to live by catagory amounts that work for ME. Sounds like you are naturally good at this so it should not be a prob so don’t worry. You will probably really enjoy watching it on paper. I like to see what I spend and then make it a game to get the same amount of items or enjoyment for less money.
Even without a budget, you’re doing something right to have NO DEBT and your house to be paid for soon! Way to go! I am a budgeter, and a 0 balance budgeter, but I’m not sure if I have any helpful hints. I would so go to Larry Burkett’s Crown Ministries. He’s has a ton of free printable things on budgeting.
I am amazed that you are a non-budgeter!
I didn’t know what to do when we first started ours, so I just used a loose guesstimate for or numbers. I wasn’t paying a whole lot of attention to our zero bottom line. Once I done it 2 months, then I made sure that our bottom was zero. That is when I noticed a huge difference in our spending habits!
Good Luck!
I congratulate you on creating a budget! I have had a budget for years – but that is the easy part. The hard part is FOLLOWING it! LOL! That, I haven’t always been so good at!
Yes, it is important to simply record how much you are spending in each category every month as a start point for your budget.
What I have found to be the most important part of creating a budget that WORKS (this is the part that I goofed up on and have now corrected) is budgeting for the things that “come up” from time to time instead of trying to simply deal with them as they arise. Examples: car maintenance, clothing (we don’t spend much on clothing, but we do spend and it completely throws off my budget if I have to buy clothing and I haven’t saved for it), medical/dental expenses (co-pays, vitamins, meds, etc.), home maintenance, and gifts. Calculate how much you spend on these items annually and then divide that amount by 12 to determine how much you should be setting aside for each category every month. (I prefer to slightly over-estimate as this money is saved in our savings account and if we don’t end up spending it on the designated category, it ends up being part of our true “savings account.”)
But, most of all remember that your budget is a TOOL to help you make the most of your money. It is not the end-all-be-all. As you know, you can live very successfully without a budget. Good luck!
I am a non-budgeter. I do have a set amount of what I would like to spend on groceries a month. When we first got here, we started a budget as our pay went down dramatically from when we lived in Japan and had more bills. We have figured out how to manage it and finally am putting more money towards principal in our 2 loans.
i have to admit that i do my budget at the END of the month. so i guess its not really a budget, and more of a geeky spreadsheet to show where out money is spent.
we do have a general outline for the month, but we can’t do a zero balance each month since the hubs is in real estate – some months he doesn’t make anything and we’re living off savings (from his last sale).
My husband is a teacher too, so on the first of each month when he gets his paycheck, we pay all of our bills right then (mortgage, power, water, etc.). This obviously will fluctuate from month to month depending on what the power, gas bills are, etc. Whatever is left over after paying our regular bills, I assign to a category. I withdraw a $100 bill for each week’s groceries, and also whatever amount of money we have assigned to what we call “leisure” (any date nights, eating out, extra purchases like birthday gifts, etc.). Then the remaining amount of money goes to savings categories…short term for things like car repairs and home maintenance and long term savings in our savings account. It’s a little more complicated than that, but you get the idea. This leaves me with a zero balance for the month and its really quite easy and comforting to know where all our money goes. The idea is that your budget will be DIFFERENT every month depending on what is going on, but you will still budget out every penny. Good luck!
we don’t compromise quality of food at all… that’s on thing the hubby and I have agreed upon. The benefits far outweigh any costs. And, we cut out our budget in other places – not food. I think budgeting is all about finding what works for you and your family and building your budget around it, not trying to fit into a pre-cut mold.
I am like you (a non-budgeter at heart). Though I do admit I sit down and make up a budget every year or so (anytime out money flow changes). I second Kat’s comment about checking out Crown Ministries. They have a really nifty file where it gives you percentages for different categories. It definitely helped me allocate money to different categories. In fact, we are trying to pay our mortgage down a bunch this year before we add another kid to the mix, so I am going hard core and entering EVERY receipt and even splitting receipts so the laundry detergent is in the cleaning category instead of the grocery category. I don’t know if it will really make us spend too differently, unless I say “But 7% of the budget should be for entertainment, so lets hire a sitter and go somewhere.”
Hello Amy!
I’m the creator of YNAB, so hearing all of your non-budgeter commenters is like a knife to my budgeting heart 
Belated congrats on winning that software
Being Zero-Based probably isn’t nearly as important as the planning that needs to take place to make it zero-based. The planning is key. You’re being proactive, and thinking about your money before you spend it, instead of reacting to your spending after the fact.
It’s akin to a time management guru making sure you decide what you’re going to do BEFORE the day starts, instead of looking back at the end of the day and saying, “Alright, let’s make a list of what I did today.”
You’ll get some value out of both — way more out of planning beforehand.
That’s really what a budget is all about. You just make sure you’re planning your money so that it’s doing the things for you that you truly value. It’s completely personal and completely up to you.
Anyway, thanks for the mention and spurring a great discussion!
Amy-
I don’t budget either. I make a list each month of the household bills and pay them as they go. I only shop at Aldi’s and supplement what I can’t or don’t get from them and use as many coupons and sales as I can. We don’t have much left as far as consumer debt with just student loans and mortgage and we have been using the Total Money Makeover snowball idea to pay those down. We do put aside money each paycheck for savings. Maybe we could do better if we really got strict about it but then I don’t think my husband and I would be happy. As long as we don’t make more bills and debts we are content, so it is all in what you and your family’s idea of living and budgeting.
To figure out a grocery budget you can do several things. You can check out what the USDA says an average food budget should be (look under the label “groceries” in my sidebar to find it), or you can ask around to see what your friends are spending. Or make a guess or take last month’s store receipts to see how much you paid for groceries.
We haven’t done the 0-based budget yet either, so have no idea how that would work for us.
I use two checking accounts to organize my spending. One checking account I call “Bills,” and it includes all of the bills that are automatically withdrawn every motnh–mortgage, gas, phone, etc. We put the same amount of $$ in every two weeks, and the same amount, approximately, comes out every month. I have a spreadsheet that I use to check my budget for this account to make sure nothing has changed.
I have a second account, which I call “household.” I use this for all of my variable expenses such as groceries, household items, gas, etc. I like to use cash for all of my store spending, because when the cash runs out, it’s harder to keep spending! So I withdraw cash every 2 weeks and use envelopes to organize my spending. This allows me to “save up” for the items that I buy periodically. For example, every 3 months, I have to buy expensive cat food, so if I save $10 every 2 weeks, I can slowly build up the money I need. That way my cat food doesn’t eat up my entire grocery budget.
That’s how I do it–works for me most of the time. It’s not as complicated as it might sound! I like budgeting–especially when I can keep my spending in check and stay within the boundaries I set up! Feels like I’m accomplishing something.
I know this is an old post, but in case anybody reads it, here’s one of the most helpful things my husband and I have done. It’s called our Freedom Fund.
We estimated how much we might spend yearly in the following categories: dental, medical, optical (exams, lenses, and frames), and car (maintenance, repair, and tags). (We also have a baby category, saving up for the home birth we will hopefully have someday, and in the meantime using that money for the bloodwork, midwife visits, and meds I keep needing). We divide each of these amounts by 12, and every month deposit that amount into a short-term savings account. This is the account where we have a $1000 emergency fund, which also acts as a cushion if we’d have a lot of expenses in these categories in a short time. We keep track on paper of each month’s payment and any expenditures in each category. If one cavity is in the red, we don’t worry because over time, we will pay it back.
We have no health insurance, so this ensures we have plenty of money on hand for semi-regular or emergency (like $1600 to fix the car!) expenses. It takes away the excuse that we can’t afford to fix the car or fill that cavity or get an eye exam, because we do have the money on hand. It helps to eliminate worry–very freeing.
I call that “Expect the expected.” Being prepared is very freeing!
Oops, that should say “category in the red”, not cavity!