Making a Budget

Jamiedoll01

I am finally making a real effort to have a written out budget (I know, I know, this is something I should have done forever ago, but I just didn't...).  I'm wondering how you have written bills into your monthly budget that are variable- like PECO or PGW or the water bill.  Did you add up the past year's worth and average it out, or do you keep a budget that is different and adjusted for every month?

I may have 108422 other budget-type questions in the next while, and I do apologize in advance- but the MM board is kinda gone and I know you ladies are the experts in everything

erbur78

I am not a PGW customer, but I know that PECO does a "budget setting" on your account, where they evaluate your usage over previous months and charge you the same amount.  So, let's say they determine that your payment is $100/mo, even though your bill may be more or less.  If you have several months of higher or lower consumption, they will adjust your budget payment. 

As for water, ours doesn't really change that much, with the exception of the summer b/c we use it more.  I think it is fairly standard that water is billed quarterly, just look at your quarterly bill and spread out the costs over 3 months. 

Otherwise, our bills are fairly static--within a few dollars per month.  I think the cell phone may vary, but again, it's within a few dollars.

Here's a great starting point for getting a budget together: The 60% solution

Basically, this budget asks you to fit your regular monthly expenses within 60% of your gross income, so that you have room for savings (long-term and short-term), retirement and spending money (?fun money?). These are the things that most often break a budget, because most people don?t budget for them. Now, your percentage will vary, but the percentages given here are just rough guidelines:

• 60 percent: Monthly expenses ? such as housing, food, utilities, insurance, Internet, transportation. This is the part most commonly thought of as a budget.
• 10 percent: Retirement ? and if you?re doing it right, this is being automatically deducted from your paycheck for a 401(k) investment.
• 10 percent: Long-term savings or debt reduction. It?s best to invest this in something such as stocks or an index fund, and this can serve as your emergency fund. But if you are in debt (not including a home mortgage), I would advise that you use this portion of the budget to pay off your debts, and even draw some from the other categories such as retirement to increase this to about 20 percent for now. Once your debts are paid off, you can switch this to long-term savings. You still need to have an emergency fund, but while you?re in debt-reduction mode you can either create a small, temporary emergency fund out of the money from this category or the next.
• 10 percent: Short-term savings ? this is for periodic expenses, such as auto maintenance or repairs, medical expenses (not including insurance premiums), appliances, home maintenance, birthday and Christmas gifts. For this savings account, be sure to spend the money when you need it ? that?s what it?s for. When these expenses come up, you will have the money for them, instead of trying to pull them from other budget categories.
• 10 percent: Fun money ? you can spend this on eating out, movies, comic books ? whatever you want. Guilt free.

MsKellDel

we are on a budget plan for gas and electric, i prefer knowing exactly what my bill is each month.

And I  am no matter money genius but these things have helped us: i have two completely separate bank accounts, one that one paycheck goes into and all monthly bills get paid with that, the other is for everything else.I also have an automatic savings plan set up with iNG so the money comes every month and gets transfered to a savings account. I know I won't do it myself so at least we pay ourselves first and then know what is left over

tracyd21

My H uses mint.com for our budget.  I really like it - we both have the app on our phones so we can see what we're spending at any time. 

babe2331

Thanks for the advice ladies!  I have been mulling this over big time with LO on the way.  Our bills are pretty static each month.

The one thing I struggle with in budgeting is how do you figure out how much "pocket" money you and DH get?  DH and I argue about this frequently and I have yet to find a happy medium here.  I have always been a super saver.  He has no concept of what saving means.

Jamiedoll01

Thanks ladies for the tips!  I was not aware about the budget plan with utilities and will be talking to DH about that when he gets home tonight.

Erbur- thanks so much for all the info.- I have a feeling that because of our stupid mortgage the 60% idea may be blown out of the water- we bought at the height of the market in 2005, and even after refinancing our mortgage is a ridiculous joke- but I will check into it for sure once I get our expenses listed.

We are also doing the budget to see exactly how good or bad of shape we are in and how much we really need me working my PT job- because we are beginning to mull over the idea of moving, possibly outside the city (which KILLS me), and if we do, I will lose my job (residency requirement).

Along the lines of babe's question- I have seen budget samples where people do line items for food shopping, entertainment, gifts, pets, gas money, etc.  How specific do you ladies get with that stuff?  

erbur78

babe2331:

Thanks for the advice ladies!  I have been mulling this over big time with LO on the way.  Our bills are pretty static each month.

The one thing I struggle with in budgeting is how do you figure out how much "pocket" money you and DH get?  DH and I argue about this frequently and I have yet to find a happy medium here.  I have always been a super saver.  He has no concept of what saving means.

We follow the budget I posted above, which means that we take those percentages and apply them to our paychecks.  So, whomever makes more money gets more pocket money.  It is what works for us. I can imagine that if you are a single income household, this may work out differently.

JessieLynne1120

tracyd21:

My H uses mint.com for our budget.  I really like it - we both have the app on our phones so we can see what we're spending at any time. 

 

I'll second this!  Mint works well for us because we mostly have joint accounts, but because DH works for a Canadian company and is paid in Canadian dollars, he has a Canadian account (actually 1 American + 1 Canadian within the same bank) that I can't be on because I don't have a SIN (Canadian SSN).  I like the app as well. 

Tianacheron

babe2331:

Thanks for the advice ladies!  I have been mulling this over big time with LO on the way.  Our bills are pretty static each month.

The one thing I struggle with in budgeting is how do you figure out how much "pocket" money you and DH get?  DH and I argue about this frequently and I have yet to find a happy medium here.  I have always been a super saver.  He has no concept of what saving means.

We've gone back and forth about pocket money  (percentage of income vs. flat $ amount) and we landed on $75/week

tracyd21

Jamiedoll01:

Along the lines of babe's question- I have seen budget samples where people do line items for food shopping, entertainment, gifts, pets, gas money, etc.  How specific do you ladies get with that stuff?  

We do have line items for: kids, home supplies, groceries, mortgage, sports, work lunches (for DH), clothing, auto insurance, student loans, gym membership, restaurants, ez pass, TV (netflix, cable), entertainment, service/parts, utilities, gifts, gas/fuel, doctor, personal grooming.

Yes, there are a lot of line items...but this works for us.  We adjust as we notice a trend after a few months.  And some months we spend nothing or very little (doctor, ez pass, personal grooming, gifts, etc.).  The money is just applied somewhere else.

Jamiedoll01

tracyd21:

Jamiedoll01:

Along the lines of babe's question- I have seen budget samples where people do line items for food shopping, entertainment, gifts, pets, gas money, etc.  How specific do you ladies get with that stuff?  

We do have line items for: kids, home supplies, groceries, mortgage, sports, work lunches (for DH), clothing, auto insurance, student loans, gym membership, restaurants, ez pass, TV (netflix, cable), entertainment, service/parts, utilities, gifts, gas/fuel, doctor, personal grooming.

Yes, there are a lot of line items...but this works for us.  We adjust as we notice a trend after a few months.  And some months we spend nothing or very little (doctor, ez pass, personal grooming, gifts, etc.).  The money is just applied somewhere else.

 

So when you do those line items, do you just average out what you spend in a typical year?  So, let's say last year you spent $144 on EZ Pass charges- do you just put $12 a month as your 'budget' and roll over if not used (or if you go over, then use what was rolled from another month or deduct that overage from your EZ Pass budget for next month)...or do you adjust based on month- like if you know you will travel more in December because of holidays, you put more in that line item in December, and maybe don't put as much in February, when you may not be using EZ Pass?

 Sorry for the annoying questions, I am just struggling to figure out how to do this best for us. 

erbur78

Jamiedoll01:

tracyd21:

Jamiedoll01:

Along the lines of babe's question- I have seen budget samples where people do line items for food shopping, entertainment, gifts, pets, gas money, etc.  How specific do you ladies get with that stuff?  

We do have line items for: kids, home supplies, groceries, mortgage, sports, work lunches (for DH), clothing, auto insurance, student loans, gym membership, restaurants, ez pass, TV (netflix, cable), entertainment, service/parts, utilities, gifts, gas/fuel, doctor, personal grooming.

Yes, there are a lot of line items...but this works for us.  We adjust as we notice a trend after a few months.  And some months we spend nothing or very little (doctor, ez pass, personal grooming, gifts, etc.).  The money is just applied somewhere else.

 

So when you do those line items, do you just average out what you spend in a typical year?  So, let's say last year you spent $144 on EZ Pass charges- do you just put $12 a month as your 'budget' and roll over if not used (or if you go over, then use what was rolled from another month or deduct that overage from your EZ Pass budget for next month)...or do you adjust based on month- like if you know you will travel more in December because of holidays, you put more in that line item in December, and maybe don't put as much in February, when you may not be using EZ Pass?

 Sorry for the annoying questions, I am just struggling to figure out how to do this best for us. 

yes, this is what we do.  We allot a certain dollar amount for gasoline (I.e.,$60/wk), and use that for a gauge. There will definitely weeks when we spend more/less  

Jamiedoll01

Thanks, ladies.  DH and I took the first step and signed up at mint.com to at least begin to get an idea of our spending/income ratios with our monthly bills, and plan to call utilities to try to get on any budget plans we can (we're going to wait a week or so, to give utilities time to deal with storm-related issues though- I feel funny calling now)..from there I hope to get more detailed with our budget.  I really appreciate the feedback!