# Approaches to Budgeting



## annR (19 Nov 2015)

We are 2 adults and three kids (7,5,1).  I'm not looking for advice on our own finances but am interested in how other people in similar set up are budgeting and tracking their money.  I've spent ages coming up with my own system but I think it's interesting how people's minds work differently and everyone seems to have their own way.  I've looked through a fair few posts but a sticky summarising different budget / tracking methods might be useful.

Personally, writing everything down in a notebook does not work for me or my husband.  My approach is to pay for as much as possible by card(s) and then download the statements, analyse what we are spending on what (also look at chequebook).  Any significant cash spend I make a note of.  I try to just estimate the rest of the cash (husband work canteen) and hope it adds up to ATM withdrawals . . . but main strategy is to do everything by card.  It also means I don't have to be asking my husband about what he spent. The spending I then analyse regularly to track things, and then slot into bigger sheet where all the fixed income and expenses are so that I can see it all totted up and whether we are living within our means. 
 It's all quite laborious but the best I've come up it.  I was just in Switzerland visiting a friend and she told me that there, you can categorise your spend on the banks website - that would be good.  Nothing like that here.


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## ivannomonet (19 Nov 2015)

I would recommend you look at http://www.youneedabudget.com as it provides brilliant software and support tools for budgeting.


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## Kramer (19 Nov 2015)

annR said:


> t.  I was just in Switzerland visiting a friend and she told me that there, you can categorise your spend on the banks website - that would be good.  Nothing like that here.


AIB Online banking have a similar tool called My Money Manager where spending is categorised


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## Dan Murray (19 Nov 2015)

annR said:


> .....in Switzerland....you can categorise your spend on the banks website....



You're beginning to sound like Jim


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## so-crates (19 Nov 2015)

Kramer said:


> AIB Online banking have a similar tool called My Money Manager where spending is categorised



Similar tool on BOI online banking. I have used it and it is quite good though they seem to have a few teething problems


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## mathepac (19 Nov 2015)

AIB are offering this too but currently only at an aggregated level e.g. if I buy groceries, booze and motor oil in LIDL, it all goes into the same category of spend at the transaction level.

sorry already posted above


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## Jim2007 (19 Nov 2015)

annR said:


> I was just in Switzerland visiting a friend and she told me that there, you can categorise your spend on the banks website - that would be good.  Nothing like that here.



What we have is not much, did you actually see it?  If you spend 50 francs in Coop or Micgro, it just says groceries - despite the fact that you could have bought stuff from their hardware store etc....  about as useful as a chocolate teapot.

Of course if you are a true Swiss you'll have bought one of the standard notebooks designed special for the purpose and you write it up each night


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## so-crates (19 Nov 2015)

Unless Lidl start sending AIB and BOI your shopping receipt I don't see it getting any more granular than the value of the transaction at point of sale


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## Delboy (19 Nov 2015)

Joint credit card on which everything goes (added bonus with Tesco of earning points but that could be under threat soon if they change their T&C's) Record everything on a spreadsheet into various categories.
Very rarely use the ATM's and when we do, it's usually for nights out or school expenses.

Being doing this for 10+ years and have 1 hell of a large spreadsheet file by now


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## Gordon Gekko (19 Nov 2015)

Budgeting should be taught in schools...in fact, general personal financial management should be taught in schools.

I received no education regarding budgeting (either at home or at school) and struggled with it as a result.


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## Monbretia (19 Nov 2015)

It most definitely should, I thought MABS did something like that, community education and all that, maybe in transition year.


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## Bronte (20 Nov 2015)

You're wasting your time trying to for example track what your partner spends in the canteen.  Better that he takes out a set amount every week for his coffee, newspaper, lunch, taxi, pint.  I analyse all our spending on my self created excel so I know how much we spend on food, petrol, car, mortgage, insurance etc.  I can tell from an analysis I do what everything costs weekly, monthly and yearly.  That helps me to see where the biggest spend is and where we need to reign it in.  Like heating bills, like using my car instead of his as his is bigger etc.  Like bringing the grocery bill down by shopping wisely.  The bank here does an analysis but too many things are lumped together.

The worst habit I've seen in Ireland is people queuing at the bank machine to take out a tenner here and a tenner there, and unlike other countries there always seems to be a queue.


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## elcato (20 Nov 2015)

Bronte said:


> The worst habit I've seen in Ireland is people queuing at the bank machine to taek out a tenner here and a tenner there, and unlike other countries there always seems to be a queue.


Not any more. They now queue at the bars or the shop tills and if you're lucky ask for a tenner cashback. They are the bane of my life ! If you're going out for the night why pay by card (and possibly ask for a tenner back) and then go up again an hour later having spent it and pay by card again.


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## Bronte (20 Nov 2015)

elcato said:


> Not any more. They now queue at the bars or the shop tills and if you're lucky ask for a tenner cashback. They are the bane of my life ! If you're going out for the night why pay by card (and possibly ask for a tenner back) and then go up again an hour later having spent it and pay by card again.



I think it's wrong to have machines in bars.  But then again if I'm in a restaurant I'm generally going to pay by card.  It just seems a bad way for young people to manage money spending it like that.  And a tenner doesn't buy you much in an Irish pub !  I have seen machines in Irish shops come to think of it.  It's all to get people hooked on credit I would imagine.  Overdrafts and the like.


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## elcato (20 Nov 2015)

It's not just an Irish thing. Most europeans and visitors to Ireland quite often buy their sole glass of guinness by card. Hopefully soon there will be barmen/maids wearing a 'Cash Only' teeshirt. A certain well known quick food chain in London started a few years ago calling at customers 'who's next and paying by cash'. I was very impressed but it hasn't spread.


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## stephnyc (20 Nov 2015)

I dont think we are ready for a cashless society yet. Using cards makes budgeting impossible for me - how much have I spent? how much have I left? oops forgot about that bill coming out tomorrow. Online banking is good for an overview though.

I'm old skool - take out X amount per week from ATM (even though we pay 12c now), and when its gone its gone. Bigger ticket items are saved for, and I've an amount put away per month to cover annual costs like insurance.


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## Monbretia (20 Nov 2015)

I'm very old school too, take out a set amount of cash every week and keep every receipt and actually write them into a diary every week then.  I don't really need to at this stage but it's a habit now and I like to have a record.   I pay all big items with credit card and put away weekly amount for annual bills, Christmas, car repairs and gas bills.   I don't even have a debit card despite working in banking all my life, I prefer straightforward atm card and cc.


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## jackswift (13 Jan 2016)

Gordon Gekko said:


> Budgeting should be taught in schools...in fact, general personal financial management should be taught in schools.
> 
> I received no education regarding budgeting (either at home or at school) and struggled with it as a result.


Money is the most important thing everyone uses in their lifetime, most people spend 13-14 years in school and are never taught about managing money. Home economics does but there are too many other things in that subject to teach money management properly.


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## annR (15 Jan 2016)

Thanks for all the replies

We're with PTSB so wasn't aware that AIB and BOI have this.  If I buy something and it won't be obvious from the bank statement what it was for I scribble a note on the receipt and chuck it in a back and revisit when I categorize everything.  That wouldn't be very often . . . but it does add up and takes time.   Unless you can digitally do this on the go I don't see another way.

>>You're wasting your time trying to for example track what your partner spends in the canteen. Better that he takes out a set amount every week for his coffee, newspaper, lunch, taxi, pint.<<

Yeah that's why I don't track it . . .I just estimate it and hope it roughly adds up.  Set amount for cash purchases per week good idea, would be easier with the budgeting.

Stephnyc and Monbretia - what if you have a partner who doesn't want to write everything down, or there are so many varied outgoings that you can't keep up with it all.

Jackswift I agree about the budgeting education.  Our world is so ruled by money now and everywhere you look there are opportunities to spend.  There's no education to counteract this to help resist the emotional pull of shopping and spending and also calculating budgets etc.  Such an essential life skill.  I guess it's left down to parents.


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## Monbretia (15 Jan 2016)

Well I don't have a partner to worry about but they wouldn't have to write it down, I could do that, all they have to do is keep their receipts.   You get a receipt for everything if you ask, I know some shops automatically either bin it or don't print it but I ask for it.   I deal in all cash other than online purchases or bigger items and have tons of receipts every week but it doesn't take that long to do them, Friday night on front of the telly with a cup of tea and they are done.

I sent my daughter off to college with a notebook and told her write down everything she spent for a month and we would then know what she needed to live on, now I'm sure her Dad threw her a few extra bob for socialising but I was just dealing with the day to day necessary spend.


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## Bronte (15 Jan 2016)

Monbretia what I've done with my kids is they have a bank account, pocket money goes in, if they spend money on food or toiletries on the card I refund that, or anything I consider something a parent should purchase for them.  If they decide to spend all their pocket money on the day it goes into the account that's there tough. Because they are minors the cards are a separate account but I can see what they do online via my banking.  Plus I'm liable.  Now all I get from them when they want something frivulous is to say I should pay it as they don't want to use their own money !

We also do the weekly withdrawal of a certain amount, my husband likes that as he feels like he is getting paid.  He then has to hand me back my allowance !

As the years have gone by he's become a dab hand at using the bank card instead though ! Which is cheating !

AnnR, I use my bank card for most purchases, so say it says Dunnes on my bank statement, I know that's groceries, but say I purchase something out of the blue, I write it in my diary.  Then once a week or so I print out the bank statement to analyse spending.


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## stephnyc (15 Jan 2016)

annR said:


> what if you have a partner who doesn't want to write everything down, or there are so many varied outgoings that you can't keep up with it all.



It does seem overwhelming with lots of variety, but do it in steps and you'll get there. The first things I would do are...
1) set an amount each week for cash spends - not writing these down yet. 
2) list out the big expenses (everything over cash spends) - and find out how much these cost, write these down (with dates/amount - April 1K car insurance etc)

Add these together and divide by 12, and you know what monthly amount is needed to "run the household". Its very sobering to realise that 3K is needed after tax (for example) to cover costs. I used the list and added it to a calendar we had in the kitchen anyway, so we could see when bills are due. 

The really tricky stuff I find, are weddings, birthdays etc as we'd have different views on them. So we agreed on a amount for those, and anything above that had to come out of our cash spends (that one worked a treat and hubby is a great bargain hunter now!). It did mean turning some down as well.

I do find one person needs to manage the budget anyway, but once you gain control of it, it becomes easier and less stressful. Good Luck!


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## mtk (17 Jan 2016)

Dd from account for electricity/ gas , Virgin,tv licence , health  insurance
Use cheques in Rare  cases where cannot use credit card
Use credit card ( joint ) for practically everything else car tax , insurance house car  travel , groceries, coffees , holidays  ,Leap card , Mobile top ups etc.  , restaurants etc
Trick is to Rarely use cash ...
This make s it very easy to track everything


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## grenzgebiet (18 Jan 2016)

A very simple way to keep track is to use something like Microsoft Money.
Just save your receipts and enter outgoings in Money every few days.
It has a wonderful 'Splits' facility that allows you to divide one transaction into a few categories - for those occasions when you pay eg at Lidl for say,  'groceries' and 'alcohol' and 'fitness equipment' etc.
Same with credit cards - you can categorise spending into 'petrol', 'travel' or whatever.
End of month, year, summaries are fantastic to show your spending in various categories.


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## shweeney (18 Jan 2016)

grenzgebiet said:


> A very simple way to keep track is to use something like Microsoft Money.



except MM was discontinued in 2009


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## losttheplot (18 Jan 2016)

Delboy said:


> Joint credit card on which everything goes (added bonus with Tesco of earning points but that could be under threat soon if they change their T&C's) Record everything on a spreadsheet into various categories.
> Very rarely use the ATM's and when we do, it's usually for nights out or school expenses.
> 
> Being doing this for 10+ years and have 1 hell of a large spreadsheet file by now



I do the same. As much as possible is put on the credit card (also gives 30 days credit). You have to make sure you're disciplined enough to clear the balance each month though. I have AIB banking but the categories don't work well (milk in a garage is shown as car expenses and the car doesn't run on milk - not that I've tried).

With AIB you have the option to download transactions as a .csv file. This opens in Excel. I do it about once a month and do the categories manually. A pivot table will then show you your monthly spend by category. You see some interesting things. I was shocked by the amount I spend on "eating out", even though I don't think I eat out much. I'd hate to see what someone who eats out regularly spends.

I also track fuel usage (only fill up with 50 litres at a time). I fill the car up approx 12 times a year. This made me see the futility of driving around to find the garage that's 1c per litre cheaper (1c x 50 x12 = €6 per year). Also, if you record the mileage and the start of the year and the end, you can see how economical your car really is and realise that changing your driving style will save you more than the garage that's 1c cheaper.

I only use the debit card to withdraw cash about once a month. I also avoid the contactless payment feature on the debit card, as this was charged as a transaction (at least it used to be - I think it still is). Doesn't really encourage cashless transactions.

Basic finance and budgeting should be part of the school curriculum. As a country, I think we're reasonably well educated, but just seem to be financially naive. I've seen people proudly boast about a bargain they'd get on a kilo of carrots, but have no idea of how much interest they pay on a mortgage. People also seem to have a poor grasp of our taxation system too.


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## grenzgebiet (19 Jan 2016)

Shweeny - do you know if there's an equivalent still on the market ?
I've been using my MMM for years (obviously!) but now that you've pointed out that it's no longer available, I might have to look for something else in the future.
I still think this type of programme gives the absolute best control of one's finances - all you need to do is plug in all your receipts/transactions at the end of the day/week.
Maybe you, or someone else here, can recommend a more up-to-date version ?


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## stephnyc (19 Jan 2016)

grenzgebiet said:


> all you need to do is plug in all your receipts/transactions at the end of the day/week.


you see you got me here - while I can see the advantages, there is no way I would do this for every coffee and newspaper. So I have "spending money" and "big purchases". Big purchases have a set budget and include things like gifts, clothes, holidays as well as insurance, mortgage and bills. "Spending money" is really another set amount per week/month, and I can be completely unreasonable (spend it all on one thing) or buy 10 coffees or whatever.

I feel having the freedom in the smaller things, and being careful with the bigger things works for me


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## 44brendan (19 Jan 2016)

stephnyc said:


> you see you got me here - while I can see the advantages, there is no way I would do this for every coffee and newspaper. So I have "spending money" and "big purchases".


This approach makes absolute sense. A key to keeping a good budget is not to sweat the small stuff unnecessarily. I.e. Allow yourself a set amount of "pocket money" each week for casual spending. It's immaterial to the budget whether you spend the full amount on coffee/newspapers or other. What is important for budgetary purposes is that you broadly maintain the spend on these items within the limit.


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## michaelm (19 Jan 2016)

I use a one A4 page spreadsheet to track my numbers (inc. credit card, not a spending diary though). I always know my account balance and that is made up of virtual money pots covering spending money, food, fuel, utilities, yearly, etc. When I get paid set amounts are used to notionally top up each pot.

Also, I do a yearly budget where I estimate all expenses (insurances, taxes, holidays, schools, clothes, Christmas, birthdays, sundry), this total figure divided by 12 determines how much needs to go into my 'yearly' pot every month . . so I never have to worry that a insurance premium or other bill is creeping up on me.

All spending must come out of one pot or another.  I keep a printout of this spreadsheet in my pocket and I note any changes on the fly, updating the soft copy ever few days and reprinting.


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## grenzgebiet (20 Jan 2016)

'Pocket Money' or  'Spending Money'  is a legitimate category. No problem there.

Anyone know of a successor to the old Microsoft Money ?


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## Moose (22 Jan 2016)

I started tracking everything by spreadsheet almost six years ago, then at the start of 2013 began categorising it monthly and annually to analyse spending. I enjoy doing it. It means I know my yearly averages in each section and can better plan. It also means a quick search to check the cost of an item.


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## trasneoir (23 Jan 2016)

I'll add another +1 for https://www.youneedabudget.com/ . The phone app makes it easy to record spending, it gives great visability of your money and priorities, and the website is great.


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## McGaggs (6 Feb 2016)

stephnyc said:


> I dont think we are ready for a cashless society yet. Using cards makes budgeting impossible for me - how much have I spent? how much have I left? oops forgot about that bill coming out tomorrow. Online banking is good for an overview though.
> 
> I'm old skool - take out X amount per week from ATM (even though we pay 12c now), and when its gone its gone. Bigger ticket items are saved for, and I've an amount put away per month to cover annual costs like insurance.


I don't know how people can manage their finances like that. How do you know what you're spending on when you're just talking out cash all the time? When I buy something on my card, there's a record on my mobile banking straight away. With cash, the money just disappears without a thought.


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## Monbretia (6 Feb 2016)

Receipts, I work practically exclusively in cash for day to day spend, that's mainly groceries, petrol, etc so only keep receipts until I record them if important enough to.  Credit card for online stuff or big items and direct debits for regular bills.   But then again I live on very little, maybe if one was spending a lot it would be harder to work in cash.  I have several bank accounts designated for various bills but would usually just transfer the money to the atm account when I need to use it, car maintenance for example is one category.   I pay no bank charges on any of these accounts and only have an atm card and credit card so those annual charges are the only ones I incur.

Money never disappears without a thought in my case, I think it's actually harder to spend real money than card money that you can't physically see, it's not as painful when it's not there in your hand 

And as to where the money goes, I could tell you if I wanted to what I spent on petrol/groceries or any other category of spending 20yrs ago.   All receipts for big items freezer/washing machine etc are all filed away in case needed even though I may have paid with cash at the time.


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## Cervelo (6 Feb 2016)

I started to track my spending at least 16 years ago but really started to track everything from 2007, it wasn't for budgeting purposes but rather to see where my money was going. I created a excel spreadsheet and put everything I spend into it, I try not to use cash and ask for a receipt every time I spend. It didn't start as a budgeting exercise but when you see how much money you spend on certain items during the year, it did make me adjust my spending and control it in a better way.

I should add that it is a chore at first remembering to enter everything onto the spreadsheet but once it becomes a habit it takes little or no time.


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## Monbretia (6 Feb 2016)

Exactly, once it becomes habit it's very quick to do.


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