What's involved in your budgeting method?

I think budgeting and practical finances should be taught at multiple stages throughout a student’s life. I thought I knew the general idea but didn’t appreciate how much neglecting it would set me back.

What is your process for budgeting? As a starting point this article lists a few methods.

I use zero based budgeting where every dollar is assigned a purpose. I don’t end up sticking exactly to the plan, but I do keep a spreadsheet which lists my current balances and all expected expenses, so I can see my future balance and avoid going in the red. A couple times a month I cross off expenses which have been paid and update the balance. This is especially helpful to me because a big portion of my income is irregular month to month.

KeepFlying,

I started with zero-based budgeting via YNAB ages ago when ynab was a local-only app. Over time though I’ve adjusted and focus on tracking my expenses rather than budgeting. I’ve found that for me, budgeting is hard to stick to because I can never predict well enough. Ynab helped back when I used it but even then I always had a “rollover” fund I had to steal from almost arbitrarily to make things balanced.

I do keep a rough spreadsheet budget of my fixed expenses though (rent, internet, phone, electricity, etc) that I use to understand how much of my money is “locked-in” and what is discretionary.

For tracking, I have a spreadsheet I input all my expenses into every month or two that I use to see how Ive been spending my money, and I use that to decide if I’m happy with where I am.

Drusas,

"Will this make me go broke before I die?"

stoy,

I don’t really budget, I live alone, and make enough money to support myself and live a decent life.

But I do have a few rules:

  1. I will never set up any kind of subscription, be it media (HBO, Netflix, Disney+, Spotify, Apple Music, Tidal), apps (Flightradar24, Vesselfinder), games (Geoguessr). What I will do is buy prepaid cards with credit for those services, and activate them for a set period of time, but I will never buy into a recurring charge for a service, I have seen too many people ruining their economy with subscriptions being a big contributer.
  2. I seldom give into impulse buying expensive stuff, but if I have the money and can afford it I am not against buying quallity even if it more expensive at first.
  3. I don’t accept a seller or sales system stressing me out to buy as fast as possible, I can and have just walked away when I felt uncomfortable with how fast the sale if being pushed, I want to have time to think about if this thing is worth it for that price and if I need it now before I buy it.
averagedrunk,

You may want to see if your bank will let you create disposable cards. I have two credit cards where I can create temporary or reloadable cards at no charge for transactions.

So if I wanted to trial something, I would create a card with $1 on it. The trial starts and does the test transaction. I forget to cancel before the trial is over, but the card has no money so it automatically cancels.

If I wanted a subscription to HBO, I could create an HBO card and load the amount for it every month. When I cancel, I don’t have to worry that they’ll try to keep charging me because I just don’t add anything else to the card. It also makes me think about whether I’m using a service every month.

It saved me a few hundred bucks not terribly long ago. I tried a clothing subscription box that was absolutely terrible. So I contacted their customer service to cancel because they don’t have a real way to do it on their site. They didn’t get back to me in time and attempted to charge my card for another box. Luckily it was on the temp card and there was no cash on it so I just got a rejected charge on my card.

stoy,

They used to allow that, but removed it in favour if having a switch to turn on and off internet access for the card, it is crap.

averagedrunk,

That’s just garbage.

stoy,

Yep, it was an old system, I think it was flash based, which makes it understandable that they shut it off, but not that they didn’t replace it with an updated system.

LesserAbe,

What bank is it that lets you create temporary cards?

averagedrunk,

Capital One lets you do unlimited virtual cards for each service. X1 gives you the ones like I described. There are others.

kewwwi,
@kewwwi@lemmy.world avatar

winging it.

whenigrowup356,

I always found it easier to basically automate the process as much as possible. “spend” every recurring expenditure and also set aside the most aggressive savings/investments possible using separate bill pay and savings accounts or buckets. Everything is taken out of the main account as soon as your paycheck hits, so it means everything you see on your spending account is a free dollar that you can use for fun or food.

Some people might operate better with a set amount for groceries too, but I personally found that too restrictive.

A good budget is one that you stick to, helps you achieve your goals, and crucially, allows you to enjoy your life to at least some extent. Whatever method works for you, it’s important to give yourself permission to spend some money on fun. However small.

LesserAbe,

Yes, I definitely rely on all automatic payments. When I first moved out on my own thought I had a grip on things but too many bills ended up paid a couple days late, even though I had the money.

We also have recurring transfers to savings and to individual accounts for “fluff” spending.

reversebananimals,

Ultimately, the best approach is the one that works best psychologically for you.

As long as you’re quantatively tracking the in/out of your dollars, yoiu’re doing it right.

From there, if your goal is to save money, its about rewiring your brain to gain pleasure from things other than consumption. In my life experience I’ve found the most sustainable way to feel good without spending money is through personal improvement and achievement. Skills, athletics, creativity, doesn’t matter. If you’re regularly getting better at making or doing stuff you’re proud of, you’ll feel good for free or cheap.

otherbarry, (edited )

I haven’t been following any specific method, just a budgeting spreadsheet that has evolved over time - though my own method works out similar to the “Pay yourself first” method mentioned in that link. Basically a spreadsheet with columns for each month & the rows document required expenses/bills, then savings goals, then slightly less-required expenses & discretionary spending. Some people do similar using “buckets” of spending goals & that works too.

Been doing it for a while so at this point already know my expected monthly/yearly costs & even have a year out projection of where the savings goals will land at the end of 2024. Of course keep in mind life happens, no amount of budgeting will get you out of surprises. It’s always best to have emergency savings.

For what it’s worth spending flowchart from the Personal Finance communities helps out a ton when planning things out e.g. lemmy.ml/post/1161162 from !personalfinance

EDIT: Speaking of the other communities you may want to visit !personalfinance / !personalfinance while you’re on this topic :)

sbv,

I’m really lazy, so I use the jar method (they article calls it cash stuffing or the envelope method). But I use multiple accounts and automated transfers.

Basically: I have one account for personal spending, one for bills, one for insurance, one for groceries, one for vacation money, etc. I get paid regularly, so I have automated transfers move money into the appropriate accounts.

When it comes time to make an expense in the given category (e.g. insurance), I pay it out of the appropriate account.

The benefits

  1. I don’t need to think about it after it’s set.
  2. If I overspend in a category, it doesn’t reduce cash available in other categories.
  3. It’s easy to tell if my budget is wrong: ie, if an account is building up cash, or doesn’t have enough money, it’s time to revisit the budget.

The first item is the most important to me. I’m not consistent enough to manage a spreadsheet.

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