MrAngryFace
Banned
Im not good at it, I need to be. Tips? Debit card bad? Cash only? Tricks to keep you from spending?
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Balancing Your Budget - How?
- Thread starter MrAngryFace
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I only use a debit card, and I have a savings account (ING Direct) that I move money into when I don't want myself to touch it. I keep a record of every transaction with my checking account (purchases, withdrawals, deposits) in Excel so that I always know exactly where I am, and I use the same worksheet to plan biweekly budgets. Knowing how much I can spend and how much I have spent usually keeps me sober as far as spending.
Setting a budget, and sticking TO a budget, are different things.
A good tip in setting up a budget is to not allocate all of your yearly income to the budget. For example: I get paid every two weeks, which means 26 paychecks a year. However, my budget is set up so that I assume I only get 2 paychecks per month, which is true most of the time. The two "bonus" checks are completely outside of the plan as a nice cushion in case something completely unexpected comes up -- car repairs, appliance failure, etc. If all goes well, then it's extra money in the bank.
Along the same lines, don't allocate all of your MONTHLY income to the budget, either. You should include line items for mandatory savings/investment contributions, and sometimes it makes sense to include an item labeled "cushion" as a fudge factor if you're not 100% sure about your estimates.
Many budgets fail because they are not realistic. Utility bills are easy to figure out -- average the last 4-5 to get a feel for the baseline -- and things like rent and car payments are fixed. Also, don't forget to calculate what you need to pay towards your credit cards to not just keep up with monthly minimums, but to knock them down to zero over time. However, most people have little feel for how much they spend on food, gas, and small discretionary items -- "oh, I'll just pick up a CD while I'm out." Track what you spend over the course of a week or two, and you'll be surprised how fast those things add up.
What do you do if you find yourself overspending your budget? The single best thing you can do is to track your spending on a weekly basis -- it's a best practice for management, and it works in your personal life too. When you see how fast you're burning through the discretionary part of your income, you can slow down so you don't go over your budget by the end of your month. If you find that you need to cut some corners, there are some classic places to look: cell phone plans, "fun" purchases like CDs/books/games, eating at home vs. eating out, and so on.
Oh, one more thing. Debit cards can be deadly since you don't "feel" how much money you're spending. If you only allocate, say, $100 in "pocket money" for the week in your budget, then stop at the ATM on Sunday night and take out the $100 in cash. You won't have to look any farther than your wallet to know how you're doing on your plan.
The bottom line is that saying "no" to a purchase requires discipline, and there is no getting around it. By reminding yourself about your financial status and your goals, though, it's easier to make the right choice.
A good tip in setting up a budget is to not allocate all of your yearly income to the budget. For example: I get paid every two weeks, which means 26 paychecks a year. However, my budget is set up so that I assume I only get 2 paychecks per month, which is true most of the time. The two "bonus" checks are completely outside of the plan as a nice cushion in case something completely unexpected comes up -- car repairs, appliance failure, etc. If all goes well, then it's extra money in the bank.
Along the same lines, don't allocate all of your MONTHLY income to the budget, either. You should include line items for mandatory savings/investment contributions, and sometimes it makes sense to include an item labeled "cushion" as a fudge factor if you're not 100% sure about your estimates.
Many budgets fail because they are not realistic. Utility bills are easy to figure out -- average the last 4-5 to get a feel for the baseline -- and things like rent and car payments are fixed. Also, don't forget to calculate what you need to pay towards your credit cards to not just keep up with monthly minimums, but to knock them down to zero over time. However, most people have little feel for how much they spend on food, gas, and small discretionary items -- "oh, I'll just pick up a CD while I'm out." Track what you spend over the course of a week or two, and you'll be surprised how fast those things add up.
What do you do if you find yourself overspending your budget? The single best thing you can do is to track your spending on a weekly basis -- it's a best practice for management, and it works in your personal life too. When you see how fast you're burning through the discretionary part of your income, you can slow down so you don't go over your budget by the end of your month. If you find that you need to cut some corners, there are some classic places to look: cell phone plans, "fun" purchases like CDs/books/games, eating at home vs. eating out, and so on.
Oh, one more thing. Debit cards can be deadly since you don't "feel" how much money you're spending. If you only allocate, say, $100 in "pocket money" for the week in your budget, then stop at the ATM on Sunday night and take out the $100 in cash. You won't have to look any farther than your wallet to know how you're doing on your plan.
The bottom line is that saying "no" to a purchase requires discipline, and there is no getting around it. By reminding yourself about your financial status and your goals, though, it's easier to make the right choice.
Are credit card purchases the cause of your overspending? Or cash? Just curious.
Either way, I think monthly cash budget is the way to go. I personally use envelopes to designate where the money should go. Such as food week1/week2, gas, eating out money, and so on. Figure out a decent amount, you don't want too much, or too little budgeted. Just the right amount. You could do this weekly, but I prefer monthly. You just want to get out of the habit of going to the ATM machine. If you go weekly, the easier it will be to get some extra money out. Weekly would be ok though. Also, I am not fond of using credit or debit cards. Way too easy to purchase things spur of the moment. You do need them for emergencies though.
Either way, I think monthly cash budget is the way to go. I personally use envelopes to designate where the money should go. Such as food week1/week2, gas, eating out money, and so on. Figure out a decent amount, you don't want too much, or too little budgeted. Just the right amount. You could do this weekly, but I prefer monthly. You just want to get out of the habit of going to the ATM machine. If you go weekly, the easier it will be to get some extra money out. Weekly would be ok though. Also, I am not fond of using credit or debit cards. Way too easy to purchase things spur of the moment. You do need them for emergencies though.
Spike Spiegel
Member
Nah, that doesn't work. You'll still find ways to spend money you don't have.Tazznum1 said:
MrAngryFace
Banned
I dunno, when I was in AZ the situation was weird, I couldnt eat at home, and I drove 70 miles a day. So the cost of gas and eating out was a problem. Right now my problem is that I have effectively taken a week off work and spent gobs of cash moving up here since gas was as much as 2.50 some places and I had to stop twice.
Phoenix
Member
MrAngryFace said:
NO! Debit card GOOD, Credit card BAD. When you run out of money in your bank account, your budget is balanced really quick
What I would recommend is using your banks bill pay system and your bills will be deducted from your account on a day of your choosing (like pay day), then you know for certain what you've got left.
MrAngryFace
Banned
I need to stop using my debit as credit. Maybe carry cash as back up if they dont do direct debit. Credit on a Debit always bites me in the ass.
In a side story that relates to using debit cards as credit one of the reasons I've had issue with many banks is that their PC banking is terrible at tracking debit card transactions.... that's why I recently joined IMO the devil...Bank of America... as soon as you do a debit card transaction if you log in to their PC banking you can immediately see who the debit card transaction was to and what the actual hold amount is.
I've been with banks that take a day just to even show the transaction, and don't even show who it is until a few days later. That sucked.
I've been with banks that take a day just to even show the transaction, and don't even show who it is until a few days later. That sucked.
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