Do you have a strict budget? Or do you just go aong the best you can? What is your method of budgeting your money?

I don't have a strict budget,but just general guidelines. I put a set amount in savings, give Cale a set amount, the kids get a certain amount of money each month, and for school clothes. Then I put the rest in checking and go from there.Most of our bills seem pretty fixed and don't change much from month to month. These ones are pretty consistent: electric, phone, insurance, trash, internet and piano lessons. So I know how much I need for these a month. Then ocasionally we will have some extras like docotr bills that aren't covered by insurance, or dentists and eye doctor. One area I need to work on is setting back a certain sum of money each month for property taxes. Seems like it always hurts to write that check!!

How do you live on your budget?

-- Melissa in SE Ohio (me@home.net), March 16, 2002

Answers

Here, we don't have an actual budget. Naturally savings comes first. We do have many savings accounts. Each for different things. Some are "NEVER TOUCH" accounts. Some are smaller accounts for the unexpected like a new refrigerator and some are for specific things. When we buy a new car or truck we begin saving for the next one 10 years down the road. I keep almost nothing in checking accounts. I want every $50.00 to earn interest. When I need to write a check I know in advance and transfer the money. We budget only normal paychecks. Any windfalls like tax returns or rebates we decide on a case by case basis. Sometimes these extra checks speed up the purchase of something we've wanted for a while but usually go into retirement savings. Our method works for us and allows us to pay cash for everything. I figure we can actually live better by NOT paying 20 per cent interest on everything that comes into this house.

-- DAVID Constantin In Wisconsin (cajundavid@hotmail.com), March 16, 2002.

Our budget is like Melissa's and it hurts to write that property tax check. I once made a comment like, I have no extra money this month, I had to pay property taxes(at work). They did not understand, did not know what they pay in taxes bacause they all have mortgages. They asked questions like, isn't that included in something? I work with NO frugal people! I thought this would give some of you a chuckle.

-- DW in CO (djwallace@sotc.net), March 16, 2002.

It is interesting that you asked this question, I just got through reading "Your Money or Your LIfe". I always thought I was pretty frugal, but this last year we have come a long way in our money management. We have met several long and short term goals during this time. We pretty much have a set budget for fixed monthly expenses, but three kids in college can sometimes blow the best of budgets, lol:). Savings and fixed expenses first, then like David different accounts for future expenses and investments. I have started charting on a graph our monthly expenses and income, and our savings. It is rewarding to see our progress every month.

-- Gina NM (inhock@pvtnetworks.net), March 16, 2002.

we have several savings accounts we also have one that takes an automatic withdrawl from our pay checks this is emptied four times a year at christmas for christmas, tax time for property tax, beginning of summer for fun or something needed, and the beginning of the school year we dont use it as much for school items anymore but there is always a big purchase and its nice to have the money to look forward to. My sister in law had a savings account she opened for her daughter and herself many years ago to buy things for themselves without having to justify it or ask DH. Ronda

-- ronda (thejohnsons@localaccess.com), March 16, 2002.

I started a new "plan" last July and it is working really well. Our daughter went away to college and I only work (very) PT when needed, so we do not depend on my meager income at all. It just goes to savings or maybe for a trip. SO each month in addition to all our regular bills ( but no mortgage, car pmt. or CC), I put back money for daughter's college (alot!); $250 each month to cover car ins. home ins. and property tax; savings acct. for other childs college, regular savings, and special savings (for Christmas, future weddings, trips etc). Some accounts don't get $ every month, but the college, present & future and the ins. acct. always get put back. So far this is working out great. I keep an accounting in the back of the checkbook of the balance in each one. That way, it is not tempting me each time I look at the checkbook balance!!

-- connie in nm (karrelandconnie@msn.com), March 16, 2002.

Here is a budget guide from Larry Burkett's web site - some of you may be familiar with him. I found that it gives good percentages of how you should divide your budget into categories.

-- heather (h.m.metheny@att.net), March 16, 2002.

My budget is easy because it's just me and the kids. Since I don't make very much, we live as basically as possible. rent, gas, water, lights, child care, food, clothes, a few amenities and savings. No room for more.

-- Melinda (speciallady104@hotmail.com), March 18, 2002.

I'm one of those with a mortgage, so property taxes are included, but we recently sat down and reworked the rest of our budget.

We figured every bill we have for the entire year, including not only the regular bills and savings but also the car insurance, tags, etc. that only come up once in awhile. We added this all together and figured how much we needed every two weeks out of Lance's check. Then whatever is above that amount for that check, we draw out and that is to cover groceries, clothing and spending money - not including gas for the vehicles, which is a budgeted amount we use the credit card for and then pay like any other bill.

It really has made it easier on me, and since we keep two weeks ahead in checking at all times, I never worry about forgetting to write down a check, or having to write one unexpectedly, or when I want to use a check instead of cash for tax purposes.

Also, since we hold out 1/2 of the monthly amount, we are basing our budget on Lance getting paid 24 times a year, when he is actually paid 26 times a year (every 2 weeks). This gives us an amount left to use for extra savings, something special, vacation, or to put even more extra towards getting rid of that mortgage!

-- Christine in OK (cljford@mmcable.com), March 18, 2002.

Interesting question, Melissa.

Both my wife and I pay ourselves first, putting respective amounts into our own individual saving reserve, then pay for a general childrens fund. We each maintain at least a three months reserve of CASH on hand, should any job loss or catastrophe occur (bank holiday). Insurance policies, and tax payments are planned in advance, each saving for the inevitable payments. Clothing, any luxuries are paid by each respective partner; i.e. my "vices" will not be paid by my spouse, and vice versa. Saves many arguments over who spent what on which.

You are so right, property taxes hurt. We are lucky to live in an area where the tax rates are not to high. I really pity Californians and others whose property taxes are so unreasonable.

-- j.r. guerra in s. tx. (jrguerra@boultinghousesimpson.com), March 18, 2002.

I recently started on a budget because I knew that I was frittering away too much money that should be redirected towards my goal of getting my mortgage paid off. I am already saving lots of money simply by being aware of how much I spend and on what. My budget for groceries, household items, toiletries, gas, etc. is $50/week. I keep a spreadsheet on which I log my daily expenses, and there is a cell which shows how much money is left for that week. At the start of each week I put $50 cash into an envelope marked "current week". At the end of the week any leftover cash gets transferred to another envelope marked "Reserve funds". The reserve funds are not used as part of the next week's budget unless I have unexpected expenses- for instance if houseguests come, etc. Otherwise that money is saved for special things that I want to purchase (saving for a bread machine right now). I keep a seperate budget for work-related expenses and I pay for them with the per diem I recieve when I am on the road.

One great benefit of using the budget is that I have saved a lot of money on groceries just by shopping for sale items and using coupons. Today I bought $26.09 worth of groceries for $15.54, which resulted in a savings of over 40%, and that was just on sale items with no coupons.

Other areas in which I am saving include- Sunday paper- I used to buy this at the store until I realized that I get charged sales tax of 7%. Now I buy from the machine and save the tax.

I made arrangements to have all of my credit card, utility, phone, and mortgage payments paid through the auto payment program at my credit union. This results in a savings of $3.15/month in postage.

I am keeping better track of my electric bill and hope to reduce it from an average of $75/month to $50/month.

I have a cell phone and switched to a better plan with more minutes. I no longer make long distance calls on my home phone, and I keep track of my minutes now (I did not used to) and make sure that I never go over the max minutes on my plan. This is saving me $50- 75/month.

I limit myself to 50 miles/week of non work-related driving, so I plan my trips more carefully and do not indulge in any impulse trips to town. If I go over 50 miles and need to go to the store I ride my bicycle. Added benefit, probably from a combination of buying/eating less food and the exercise is that I lost 4 pounds last month!

The best part is that I have completely cut out junk food and spend my money on healthier food, so I am eating much better. I also waste less food because I am planning meals more carefully and eating more leftovers.

So far this budget is working out great. The point, however, is to control my spending better but not to deprive myself. If I really want something which does not fit into my budget my plan is to first sell something that I already have (mainly books which I buy to sell on ebay, and beekeeping equipment, all of which I buy much faster than I sell, so I have tons of items laying around which I should be selling anyway). If that doesn't work I will still indulge myself for an item which I particularly want, but you can be sure that I will have given the purchase a great deal of forethought!

The above examples are only a few of many ways in which I am saving money, and I was already pretty frugal even before I started the budget. I definitely recommend budgeting for anyone who has a financial goal that they are trying to reach- this will help you.

-- Elizabeth (ekfla@aol.com), March 20, 2002.