Approaches to Budgeting

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.
 
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.
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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!
 
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
 
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.
 
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
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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.
 
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 ?
 
grenzgebiet said:
all you need to do is plug in all your receipts/transactions at the end of the day/week.
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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 :)
 
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".
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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.
 
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.
 
'Pocket Money' or 'Spending Money' is a legitimate category. No problem there.

Anyone know of a successor to the old Microsoft Money ?
 
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.
 
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.
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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.
 
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.
 
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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