Budgets and money management

[MuseedesBeauxArts]

I was a totally frugal child who was very careful about spending, but I'm less good at budgeting and financial planning as an adult. Part of it is that I learned money management from a hyper-organized ISFJ who will spend one whole day each month on this stuff. I don't have the time or patience for that level of detail. I also have tended towards carpe diem spending over rainy day planning, which becomes more risky as I get older. Don't get me wrong--I have a 401K with matching, I have a savings account, I have good credit. But I have very inconsistent spending from month to month, and I am lousy at keeping track of this in such a way that I can see and change where money is being wasted. So, I want to hear your strategies, ingenious approaches, ways to make and follow a good budget that allows for a lot of flux without agonizing penny-counting.

[Madrigal]

Sorry but it is agonizing penny-counting. Spending happens on the little things, not the big ones.

My "strategy" is I don't even want to know how much money I have left until there isn't any left. Then I have a "problem" to solve, but it's just a couple of days a month, instead of stressing over how much I spend every single day. Life is a lot easier for me that way.

What will happen before I get old? I dunno... how many boom and bust cycles will have happened by then? I can't try to project financial sanity into a country like this. I'll be okay somehow.

[Hephaestus]

Part of it is that I learned money management from a hyper-organized ISFJ who will spend one whole day each month on this stuff. I don't have the time or patience for that level of detail.

Uhh... ,aybe I'm misinterpreting your intention, but that sounds terrible. Budgeting is daily, like brushing your teeth. One day a month for examining finances is begging for trouble--about like only brushing your teeth once a month.

It's honestly way less tiresome if you check your finances daily--at the very least your volatile accounts should be monitored daily.

This isn't to say a full monthly reconciliation and verification that things got paid is a bad thing, just that it should also be ongoing. It used to be less practical to do that, but with internet banking, it's much easier to verify without inconvenience or surcharge.

I spend time every day trying different budgets and plans on for size, verifying that I have my expenses covered, that I know what my current discretionary income is, and trying to plan for the future--to the point of making budgets for income from employment I haven't acquired yet or other income streams that I don't have the means yet to set up. That way, when the time comes, I won't have to do that work then, I'll have worked it all out in advance.

And then I'll do it again anyway because new variables might surface.

It's kinda fun...

Until you start digging through taxes. Tax code is one of the biggest disincentives to entrepreneurial spirit I know of. You get screwed six ways from Tuesday before you've even figured out what day you're starting.

I'm pretty sure most start-ups cheat and lie until they get too big to fly under the radar.

[MuseedesBeauxArts]

I spend time every day trying different budgets and plans on for size, verifying that I have my expenses covered, that I know what my current discretionary income is, and trying to plan for the future--to the point of making budgets for income from employment I haven't acquired yet or other income streams that I don't have the means yet to set up. That way, when the time comes, I won't have to do that work then, I'll have worked it all out in advance.

How long does this take you in a day? I just don't think this is feasible for me. I could do weekly or maybe even twice a week, but there is 100% no way that I can do this daily. How many adjustments are you making? What do you do "trying different budgets on for size" in a session like this? Like I said, my budget fluctuates wildly, which can be hard to predict. My rent, phone, etc. are fixed expenses, but I have big changes in how much I spend in other areas of my budget. Some of this is expected, some unpredictable.

[jigglypuff]

i make up for not checking my finances every day by being frugal every day.

when i'm not doing that, i'm spending on a decent amount of unnecessary things and keeping records of every little cent i spend. this approach is the one that makes me wanna kill myself.

[MuseedesBeauxArts]

i make up for not checking my finances every day by being frugal every day.

when i'm not doing that, i'm spending on a decent amount of unnecessary things and keeping records of every little cent i spend. this approach is the one that makes me wanna kill myself.

How are you frugal every day? What decisions are you making that you consider frugal?

How do you track every cent? Have you tried other approaches to your "unnecessary" spending?

[jigglypuff]

How are you frugal every day? What decisions are you making that you consider frugal?

How do you track every cent? Have you tried other approaches to your "unnecessary" spending?

i try really damn hard to maintain a good relationship with my family so i don't have to go out and try to pay rent in one of the most expensive cities in the US, don't buy new clothes for years, share food and costs when i eat, attend social events for food, share car ownership, share everything.

tracking every cent is shitty but basically i keep every receipt, meticulously calculate at the end of the week and get the total costs of "unnecessary" (not all is truly unnecessary, granted) spending at the end of the month, which i put next to my income and figure out if i'm doing ok. the stacks of receipts and having to calculate it all cuz i felt like eating at subway or whatever is depressing. a significant portion goes towards bills and car payments.

[Hephaestus]

How long does this take you in a day? I just don't think this is feasible for me. I could do weekly or maybe even twice a week, but there is 100% no way that I can do this daily. How many adjustments are you making? What do you do "trying different budgets on for size" in a session like this? Like I said, my budget fluctuates wildly, which can be hard to predict. My rent, phone, etc. are fixed expenses, but I have big changes in how much I spend in other areas of my budget. Some of this is expected, some unpredictable.

Very little time really, but I've always had simple finances. I note how much money I have, how much money I need to expend for fixed expenses, check my anticipated income, verify that there is enough income to cover my expenses and by how much, and then I know what my discretionary income is at worst. All my bills currently are due within the same basic period of time, which also simplifies things immensely.

On monthly wage budgeting: I always calculate based on a four week month. My answers tend to be wrong in my favour, but not short.

Discretionary income is slightly more difficult than just income minus expenses. I never want to be without some cushion, but it's been quite some time since I had a comfortable cushion, and honestly, I've never had enough to create an advisable cushion--as you say, there are unpredictable expenses... and the occasional mistake. Mercifully, there are fewer mistakes these days, but that's counterbalanced by how tight my budget is.

Credit is a useful tool for dealing with unplanned expenses, and that's where most of my real cushion comes from: the ability to rob future me. It's lousy, but it's what I have. So far, it works--but that's beside the principle:

Don't buy anything without knowing how much money you have. The only way to know is to keep a tighter reign than looking over things once a month.

For my finances, it's something I can work out in the shower, and confirm shortly after.

The trick is: you don't always need to continually know every transaction that taps your discretionary funds, you just need to keep a running total--and verify it regularly until it becomes autonomic (not automatic, autonomic, in your bones). I don't notice the time at all.

For the most part, once I've allocated funds for my fixed expenses, I treat the money as if it doesn't exist, and I don't consider myself having discretionary income until I've secured the funds for my fixed expenses.

If your income is stable, your budget shouldn't fluxuate, only your discretionary spending.


As for trying different budgets on for size, they're income goals. I consider "what if I had this amount of income--how could I allocate it for best use?" First I consider the minimum payments, then I decide out of what remains, how much would allow me to live in a manner I'd be happy with. Then I work up a payment plan to cover the other things I want to deal with--like paying off debt and saving for retirement. If I'm not happy with the time frame to achieve my goals, I revaluate how much comfort I want.

There are fluxuating expenses like electricity and water, but just because they fluctuate doesn't mean they aren't predictable. You can work out how much they are likely to be well in advance--and many utilities offer various types of payment plans to make that more predictable. Those fluctuations are part of the reason for the cushion.

Granted, I have more time on my hands than many, but I do it while walking, while showering, while brushing my teeth, while exercising or doing simple menial tasks. Not at every opportunity of course, but I do it in many of the same places I would daydream--it is a form of daydreaming. If it gets to difficult to hold in my head, I work it out on pen and paper.

One handy thing about paycheck to paycheck living: it can lead you to find time to budget assiduously--and without venality. It's survival.

Edit: a simple equation to explain why budgeting always (or thereabouts) is a better option than once a month.

X is the amount time you have to spend working on your budget. It's fairly constant. N is the number of times you work on your budget:

X/N is the amount of time per session you have to spend. Do it once a month, and it's an all day chore. Do it every day, and it's much less tedious.

[ferrus]

Yeah, my personal finances are a gigantic clusterfuck. I have never defaulted on a loan and have almost no debt (apart from a couple of hundred on a credit card that is deactivated and will be paid off this year) and yet I have poor credit because I consistently fail to take account of where my limits are or how much I have in the bank.

[pensive_pilgrim]

I've spent a significant amount of time either living paycheck to paycheck or living on the remnants of my last paycheck while struggling to find a new source of them, all with no safety net, and I think that mindset is kind of burned into me now. I'm constantly conscious of how much I have and how long I can expect it to last me if everything goes to shit, and by default I'm quite frugal. Whenever I buy anything I'm conscious of the value I'm getting. With food I think mainly in terms of calories or nutrients per dollar, always buy in bulk, I pretty much never eat out. I actually had to stop myself this last year when my freezer was stuffed full of meat because every time I saw something half off or more I would get as much as I could carry. I still have a big bag of fat trimmed from whole pork loins that I was planning to render down but I should just throw it away. I have about a quart of beef tallow in my fridge that I use in place of butter. With clothing I just never buy anything unless I actually need it. It was only fairly recently that I increased my inventory of pants from three to six, and most of my shirts are still white t shirts bought in bulk - the others were free and come from events I've participated in through school. Whenever I buy tools, equipment or electronics I do a lot of research to make sure I'm spending my money wisely on the right product from the right vendor. I wish I still had access to a car, having a costco membership was nice.

I do pretty well with it I think. I have a scholarship that pays 90% of my estimated need to attend school and I saved enough of that over the last school year that I had $4,000 in the bank at the beginning of this summer. I'll probably just barely make rent before the next check comes in Monday, but I did smoke about a qp of weed over the summer. A couple years ago I did my taxes for about the past seven years and my income was generally around 11-14k each year with how much I was unemployed. Living on financial aid feels pretty comfortable. I can't even imagine what it's going to be like if I get an engineering job and make 65k or more. Hell, my internships are supposed to pay a minimum of like $20 an hour. I'm gonna do so much drugs and fuck escorts probably.