If you budget, but don't HAVE to

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Posted 2/8/2013 by kipper in NSBR Board


PeaNut 13,270
March 2001
Posts: 218
Layouts: 1
Loc: Wisconsin

Posted: 2/8/2013 11:09:38 PM
How do you decide what amounts to use for your variable expenses? Things like eating out, entertainment, craft purchases ?
I know some websites have percentage charts and stuff, but they all include debt repayment. Do you just put that extra amount towards something else if you don't have debt? Just wondering what other peas do. I am thinking about making a budget, but don't really know what's realistic, as we haven't ever tracked expenses by categories.

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PeaNut 36,843
April 2002
Posts: 16,666
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Posted: 2/8/2013 11:28:07 PM
That's interesting as DH and I are starting to have these conversations (our house will be paid off this year).

I think you start with goals and dreams. If my ultimate goal is to be zillionaire by age 30, then I'll cut everything to the bone so I can invest the max.

Our dreams will include some travel and upgrades to our home. Therefore we won't have unlimited eating out (a choice that's easy for us to make since we both like to cook).

It's a lot easier for me to try to control shopping for gadgets if I have a better use for the money if that makes sense.



PeaNut 65,877
January 2003
Posts: 13,181
Layouts: 30
Loc: So CA

Posted: 2/9/2013 12:01:16 AM
I think most of the people say the money that would go toward debt repayment should mostly go toward savings once you pay everything down. I would like to set up a budget as well but have just been trying to stay out of stores and not shop. We can afford to go out but I am trying to put that money into savings or for a new car right now or toward vacations or home improvements.

I don't have the percents though. I know they also suggest maxing out your retirement - 401Ks and Roth IRAS and investing as much as possible. Paying down your mortgage if you can is another thing I hear on the Suzi Orman show.



PeaNut 131,676
February 2004
Posts: 3,036
Layouts: 10
Loc: Nor Cal

Posted: 2/9/2013 12:04:32 AM
We took all our expenses for last year and put them in a spread sheet by category. Since we use one account/card for 99% of purchases it was all in one place for the most part. Then we averaged out how much we spent in each category per month. And that is our baseline amount for each month in each area. We are using EEBA which is a virtual envelope system to track our purchases. You can assign amounts to each category and track what you are spending.

Our only debt is our mortgage and dh is the only one working (I am home with our 22 month old and 2 week old). DH makes enough that we are able to pay all the bills, travel, and buy pretty much what we want. But in the future there are some things that we would like to buy - Tesla X, add on to the house...that we would like to save toward rather than go into debt for. So this system seems to be working for us. We have all the necessities ...but also eating out, our own fun money, money for stuff for the kids...in our envelopes. It is an easy way to track and see where you are spending.

ca angel

PeaNut 400,602
November 2008
Posts: 2,455
Layouts: 36
Loc: So Cal

Posted: 2/9/2013 12:21:09 AM
When I started I tracked a month's worth of expenses to get a general idea. Now I like to use at least 6 months of expense to work the budget.
Honestly it is overwhelming for me to create a budget. Things like our home and auto insurance that are only billed 10 months out of the year (but not the same 10 months) make my head spin! I get stuck in the little details and lose sight of the big picture.

I've used Quicken for the last few years. I just bought the 2013 version (about $28 at Costco right now with a coupon). It has an app that I'm hoping will make keeping up with everything easier.

Right now I am working on inputting/adjusting categories for receipts from November (already did current-December, still have 1/2 of Oct to do). With all the Christmas shopping, keeping up with tracking got put to the side. I did have a gift budget that I worked with in.

We use "extra" money to go towards savings/retirement/college fund. Besides a mortgage and 1 new auto loan we don't have debt. We live in So Cal and have a mortgage that is more than some people pay for a house in other parts of the country. Paying that sucker off will take a LONG time. The auto loan is new (haven't even made our first payment).We will probably put extras towards that too as it isn't too bad since we paid cash for about 1/2 the cost. We have always paid off credit cards.

I know we can do better with our savings and that is what I want to work on. We have been told that we are in a really good place for "people our age (early/mid 30s)". Don't know exactly what that means but I am not comfortable with the amount that we are saving for retirement and college.
My next goal is to find a financial planner that can give us a more concrete plan for the future. I'm not happy with the one we have now.
ca angel


PeaNut 180,283
December 2004
Posts: 3,159
Layouts: 18
Loc: California

Posted: 2/9/2013 1:06:33 AM
There was a thread about this not too long ago Here . I remembered because it was almost the same thread title! Maybe you'll find some helpful input there.



PeaNut 510,579
June 2011
Posts: 4,239
Layouts: 0
Loc: The Land of Steady Habits

Posted: 2/9/2013 7:20:54 AM
Just decide how much you can spend per week and take out cash. When it's gone you're done-no tracking.

"People seem not to see that their opinion of the world is also a confession of character." - Ralph Waldo Emerson


PeaNut 510,579
June 2011
Posts: 4,239
Layouts: 0
Loc: The Land of Steady Habits

Posted: 2/9/2013 7:21:08 AM
Just decide how much you can spend per week and take out cash. When it's gone you're done-no tracking.

"People seem not to see that their opinion of the world is also a confession of character." - Ralph Waldo Emerson

Sue Pea

PeaNut 87,238
May 2003
Posts: 7,572
Layouts: 190
Loc: Dirtyland and Oilyland

Posted: 2/9/2013 7:34:51 AM
What happened for me is that when we were on a tight budget, I had very minimal amounts for categories like those you've mentioned. Then as our financial situation improved and we had more "free" money each month, I started upping amounts. I upped savings first, but here and there I would add a little bit to our monthly entertainment budget and to other "fun" categories. Then I established some categories that we previously didn't have, like a vacation fund where I put some money each month -- things like that. At some point, the amounts I had for things like "entertainment" seemed just right, because we'd either come close to the amount each month, or be under it, so then I just left those amounts as is.

CKU-Indy -- March 2003
CKU-M, Salt Lake City -- August 2004


PeaNut 202,203
April 2005
Posts: 2,878
Layouts: 0

Posted: 2/9/2013 8:57:42 AM
I figured out how much I make, then how much I wanted to save. Removed the budgeted bills and what was left was fun money!


PeaNut 41,763
July 2002
Posts: 3,746
Layouts: 17
Loc: Somewhere in the middle...

Posted: 2/9/2013 7:03:35 PM
We track everything we spend every month and have for the 24 years we've been married. We don't have to, we choose to, and because we do we know when we can retire, how much we can spend on vacations, new house, new car, etc. I can't take credit for this, I wouldn't have that much discipline if it weren't for DH, but I love that we always know.

I think before you know what you can spend on the extras you have to know how much needs to be saved for retirement.

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