Do You Have a Budget?

Travel is so important to me, but growing up, I was taught travel was a luxury expense. So, my husband and I set up a separate travel savings account. Each month, we put a bit of money away, and when we have enough in it, we take a trip! It’s such a good way to treat ourselves without feeling guilty that we’re dipping into “actual savings.”

I feel so passionate about talking about money, finances and budgeting! I live in an expensive city and even with very average jobs (teacher and nurse) my husband I have purchased a home, traveled, and bought a car with cash thanks to budgeting! I’m so thankful my mom talked to me about money growing up and instilled the “living below your means” idea into me.

Biggest tips we have:
1) Track all expenses, especially when you’re first starting out! Like you said with things like transportation or monthly expenses, it’s crazy how it adds up without you noticing. And you don’t have to use anything super fancy. We have a google spreadsheet where we track expenses based on categories we decided for ourselves.
2) Create a budget based off of the tracking your expenses. Also, our budget total is less than we make. My income fluctuates a little bit so going on the low end of the paycheck make makes it so that if something unexpected comes up or I spent more on clothes because I found a great deal it’s not a deal breaker and we can still pay off the credit card in full each month. If it ends up being extra at the end of the month it goes directly to fun savings.
3) That being said, save first! We save for retirement, holidays, travel, and car every month first so when things come up we know they’re taken care of already! And similar to other commenters, we different savings account for each category so we know exactly what it’s for.
4) Finally, we each have an “allowance” (not much, $50) that we can spend on whatever we want, no judgement. Mine goes primarily to coffees and random amazon buys :) It takes the stress out of spending money on something unnecessary.

CupofJo can you compile the best ones into a “Top 100 reader money tips” post? I’d read that in it’s entirety! Let’s all have a fiscally responsible summer together :)

This post came at the perfect time! I, like most young people, have had recurring nightmares about finances-student loans, monthly expenses in a big city, sick dog care, savings (??)- and this sounds like a great step to take. I’ve had friends talk about YNAB but all of these endorsing comments are making me take the plunge. Here’s to committing myself to this once and for all! Thank you, thank you!

Long time lurker coming out of the shadows – Thank you for posting this! I LOVE YNAB. It helped me pay off credit card and student loan debt and save for house renovations that I did not think were possible. The customer service is good and I like their ethos. It taught me:

1. How much money I really have for disposable spending. My bank account might look like I have thousands but YNAB shows I really have like $18 until Payday after I deduct the necessities. That was the biggest change.

2. Wait until I have the money in my bank account before I spend it. Such a silly thing but I’d spend next week’s paycheck at Target because convenience. “I’m already here so I might as well stock up on [home decor, clothes, lip gloss, not-necessities].” I was always in the hole. YNAB conditioned me to hold off until Payday before walking into the store. Same with restaurants – if I don’t have the budget to get take-out tonight, I’ll skip it but reward myself on Payday.

3. But also keep a To Do list with shopping items so I can be organized when I go into Target or whatever. Now I don’t need to wander the aisles to remember the three things I actually needed.

4. It feels glorious to pay for things in “cash” without borrowing on a credit card. (I technically put it on a credit card for miles but pay it off every month.) It’s easier to save for vacations, clothes, big items, luxuries a little bit at a time when you’re feeling flush and then you don’t feel guilty when it comes time to buy them. Vacations are so much less stressful when you don’t come home to a big credit card bill.

5. From my husband – compartmentalizing really changes your mindset. Instead of budgeting X amount for broad miscellaneous categories, we create really small categories like haircuts and kid swim lessons and random kid’s birthday present.

6. It took awhile to realize we need to budget in weekly increments. My husband gets paid on the 15th and 30th of each month and I get paid every other Friday. It took us awhile to figure out how to allocate for our bills and give ourselves spending money each week. We don’t have the discipline to allot spending money for two weeks.

I could go on and on. Fiscal responsibility is fun!

When we had ‘nothing in the fridge’ growing up, my mom would always, always, always say: Eat an apple!, as if it were the most obvious thing in the world. No matter what, there was always a full fruit bowl – apples, oranges and bananas, sometimes grapes and cherries. Always. Those were our allowed daily snacks.

I wonder, are you teaching your boys to cook anything? I’ve been watching Masterchef junior and it is mind-blowing how competent those kids are! Season one is my favorite group of kids, but they are all incredible!

We have been using Dave Ramsey’s EveryDollarPlus for 18 months. Life changing. His podcast is super inspiring too.
Here’s my tip for living on a budget and not feeling deprived. I keep a note in my phone “things I want but I’m waiting to buy”. If I want something that’s not on the budget I write it there. Then I can gauge over the next few weeks if I really want that thing or if there’s something on that list that I want more. I can add it to the next months budget. Many times I end up taking things off. And when I do buy I keep it on the list but with a check mark so I see all the things I did get to buy. This idea of “later” instead of “no” helps remind me that the budget is about focusing on my long term goals and feeling abundant and grateful for what I do have now.

Any recommendations for a YNAB apps outside of USD? It does not look like it can be used for other currencies?

Also, where is the bike from? Where can I buy one of those?

This is comically low-tech, but I’ve had the most success using a little notebook to track spending. I have a checking account for bills and one for more flexible expenses (groceries, gas, going out to eat). I copy out my standing bills for the month into two week pay periods, and every morning I check my balances, check off my bills as I pay them, and look at where I am for the month ahead to make sure I’m planning for additional expenses (tax payments, summer day camp, etc.). This quick “money minute” has helped me be aware of how much I have to work with and to become a much better planner.

Does it talk to my credit card, and not just to my bank? 90% of my spending is on my credit card (which I pay off every month), both for convenience and for the cash back I get from it. Will YNAB automatically update those expenditures, or would I end up inputting them by hand?

What always seems to happen to us is that we set a budget, and as long as our lives stay pretty level and normal, that budget works: we eat at home, we cook from scratch, we make our own coffee, we have friends over for a potluck and $10 bottles of wine instead of meeting at a bar, we sew up the wrecked knees of our kids’ pants, we cut our kids’ hair ourselves, we mow our own lawn and walk our own dog.
But our lives almost never stay level and normal: summer camp season hits and we are overwhelmed by commuting logistics and no one is actually home to make dinner; work will suddenly be crazy for one of us and we’re pulling long hours; the kids break a hole in the wall/flush a pack of baby wipes down the toilet; I have a spell of depression/anxiety/overwhelm and start delegating all decisions and work to people I can pay to make those decisions/do that work for me until I feel better.
My guess is that everyone has these disruptions in their lives, and what I haven’t figured out how to do is accommodate those peaks and troughs in a budget that assumes our lives proceed in a straight line. Because when I’m already feeling overwhelmed and near tears from trying to do my job well and take care of my kids well, I order take-out and try not to feel bad about it.

Does anyone have any insight into whether YNAB (or the other budget apps mentioned) is good for freelancers that have varying incomes each month? I saw that EveryDollar wants you to state your monthly income as the first step, but my husband and I are both freelance designers and I don’t know that it would be a good fit.

Also, I’m a little wary of connecting my bank account but I love the idea of the convenience of not entering every transaction, I know we would not last long doing that! Any pros and cons to this set-up? Reading the terms of service made me nervous when I saw statements like “granting power of attorney” to an app. Any advice would be so appreciated!

Love seeing more posts about good financial habits and money management! Financial independence and security is essential for women’s empowerment. When we got married, my husband kept a budget and I definitely did… not. We spent a lot of time in the early years of our marriage aligning our financial goals and habits — and two things REALLY helped me grow to love budgeting. I know, I cringe a little typing that sentence, but it’s true now — which is shocking given I hated it so much in the beginning. First, (and you make this point here) a budget is not necessarily about restricting your spending – it’s about making sure you spend intentionally and in line with your values. Second, building a budget is easiest if you start by looking at your current expenditures (ideally look at an entire year, because some spend will be wildly different month to month – like travel, gifts, etc. ) to get a sense of where your money goes, and then contemplate what changes you may want to make. It’s challenging to set arbitrary targets (e.g., groceries should be X% of my budget) because spending habits are so different person to person. Keep up the great blogging, CoJ! This is the one site I read religiously, and I’m so glad to see you taking on this important topic!

I also found that Dave Ramsey offers real world, practical advice when it comes to budgeting. He really gets into the issues couples may have when they run into budgeting and most importantly how to get out of debt! He has a budgeting app too and a course called Financial Peace University. It has totally transformed how my husband and I view money and has helped us communicate more easily when we set a budget.

My best tip is having two checking accounts; a main one where my paychecks are deposited and another for weekly expenses like groceries and gas. I pay myself from the main account every Friday. It’s kind of like the cash envelope system with the convenience of a debit card. And I never accidentally spend money earmarked for bills. Not that I’ve ever done that…………….

a tip I haven’t seen in the comment threads … if anyone has Sirius xm subscription make sure to let the subscription run out before renewing (usually yearly). My husband got a year long subscription for 50% off just by going without for a few weeks. Definitely don’t pay full price

I love this post! We re-worked our budget a few months ago and realized that we spent far too much dining out and used it as a means of entertainment (live in a small Canadian town with two kiddos.) We now take out cash each month that is deemed “fun money.” Once it’s gone, it’s gone until the next month. We created budget allotments for vacation, emergency money and household upgrades. Having these as fixed categories has also helped to prioritize them and keep things in line. Some months things go over budget in some areas (growth spurt = whole new toddler wardrobe needed or a trip to the vet for the dog) but for the most part it leaves me feeling more in control of where our money goes and has forced us
to evaluate our financial values. I do still find staying on track with groceries ultra tricky!

Long-term CoJ reader and YNAB user here (and commenter on the original budget post that apparently got you started with YNAB)…. Can I be totally honest here? While I love seeing YNAB here and generally love CoJ, this sentence in your post made me think you either didn’t REALLY try YNAB or else weren’t precise enough in your writing of this article: “They even have categories like “fun money” and “things I forgot to budget for.””. Every YNAB user knows that you set up categories yourself, and come up with names for them youself… Saying YNAB “has” categories named this or that makes no sense!

the BEST insight i got into budgeting and money came from a kids game called “Cashflow” by the writer of “Rich Dad Poor Dad” (which I haven’t read.) The game is all about making more money each month than you spend. You have some fixed expenses and then some wants that you can choose to spend on (like activities and eating out and buying clothes and stuff)… more importantly, you also have the opportunity to use your money to CREATE MORE INCOME, by investing in stocks, real estate or a business. the way the game is set up, it becomes really painful to waste money on frivolous items, and it feels fantastic to use money to create more income, and basically to create wealth. I am coming to realize that wealth is more important than income in many ways. I remember reading somewhere that the main difference between middle class and upper class budgeting is that middle class people spend money and it disappears, and upper class people are taught to spend money in such a way that will make them more money. I think that is the premise of Rich Dad, Poor Dad.

Anyways, playing a couple rounds of this game really changed the way I think about money. Now, when I feel spendy, I often use a chunk of money to make some kind of home improvement, which i hope would increase our home value. and frivolous expenses do feel more painful in real life too.