I Need a "HowTO"

Great question! And as you find answers, your family will greatly benefit!

We went to www.crown.org as a starting point in figuring out how to do a budget. Specifically, check out the "Crown Tools" tab - this will lead you to some great online tools and calculators to help you determine what your budget should look like, what categories to include, what percentage of your paycheck should go to each category, etc. Use this as a starting point, then use either one of their spreadsheet tools or an excel file to keep track of things. Honestly, this website is a wealth of useful information if you take some time to check it out!

After establishing our budget, my husband and I determined we really needed to use a cash system. Sure, Debit/Credit card statements were great at tracking exactly where we were spending our money, but after-the-fact. We often and easily came to the end of a month and realized "too late" that we had over spent in a certain category. We then had to juggle categories - "borrowing" from one to pay another to make things balance!

Then we discovered an envelope cash system (we didn't get our details from Crown.org, but I think they do have some tools and discuss it there). Basically, since we have a budget, we know how much money is available in each category every paycheck. Each pay period, we make a cash withdrawl for the total amount available to spend, then I literally divide the cash up into separate envelopes (you can use a coupon divider type wallet, etc - buy at office supply store). When going to the store, you can spend what is in the envelope! At first we kept receipts in the envelopes to track what we spent, but we no longer do. Once a category is empty, it's gone until the next paycheck! On the other side, other categories (house repairs, haircuts, clothing funds) may accumulate for a while for one bigger purchase.

I've given you a lot of info here, but perhaps not enough detail. Please let me know if you have any questions or if I can help you navigate www.crown.org!

Good Luck!

Hey C.,

No one should laugh at you at all for asking this! It's great that you want to make a budget.

Go to your library (to avoid spending money) and get books by David Bach and Suze Orman. Both of those authors are great at personal finance and their books are quick reads.

Best of luck!

M.

Hi,

One thing my husband and I noticed was that using cash for paying is a really quick way to lose control and to lose track of your expenses. So now we have a set a limit (the same amount every month) that we can withdraw for our personal small expenses. On the 1st and the 15th of every month, we both get the same amount of money (for example, you can set your limit to be $50 per 2 weeks per person) And that is ALL that you can use for cash - so your lunch, starbucks coffee, soda at the vending machine at work or all those small things thats what you use. If you use it all up, well thats too bad. You go without some luxuries for the few days till you can withdraw. If you don't use it up - guess what.. its your money to do what you want! Treat yourself to something... or save that left over cash and in a little while you might have enough to go get a pedicure! Of course, that means you will charge a lot more expenses...but guess what! You can keep track of what you spent through your credit card statement and every month you can say WHY did I buy that or I really need to cut down on such and such so that my credit card bill is lower. It makes you realize how much money you are spending on stuff you probably don't need to or want to!
Other things that helped us out were - taking lunch from home, taking coffee from home instead of starbucks or dunkin donuts - get a coffee maker, a coffee grinder and some beans and a great travel mug and you wont' look back! Its the small things that can really add up.
And if you are computer savvy, use a money managing software like Quicken or Microsoft Money to help you figure out how where your money is going!

Good luck. And its great that you are thinking about this.
Aarti

I use an excel like spreadsheet too. I have a list of repeating bills, what the general amount usually is. When I pay it, I put the amount in it's place each month. There is a total of how much is left, which is for gas, groceries, preschool, etc. This also helps me to compare month to month that the bills are the same, or what has changed.
I also download a file from the bank online so I can drop it into a spreadsheet or money software, and see what I've spent by category. Sometimes it's tedious because I have to categorize everything myself, but it's usually to see how much is spent on food and gas.
If you have storage space, buy some things in bulk. I have a palm pilot with the program Handy Shopper. You can compare two items for the best price. I also use the calculator on my phone or palm to see what something might cost per ounce, per pound, per box, per diaper, etc. When I have more time to myself and can shop without kids, I try to update pricing, etc in my handy shopper program. I also keep a grocery list and a household list in handy shopper, so I don't walk around the store grabbing extra stuff. Though a list on paper does wonders too. Don't walk every aisle. My husband use to do this and it drove me nuts.
Anyways, I said a little much. If you'd like I can send a version of my spreadsheet that is blank for you to try out.
Suze Orman is great! She has articles on yahoo finance too.

C.,

It's not silly. Not at all. What I do and have done for years is a basic Excel Spreadsheet. I total my expenses for the month and divide them by each paycheck (we both get paid the 15th and the 30th). This way, we have excess on each check and we aren't drained with all the bills on one check. One of the "bills" I include is "savings" and I make sure to pay ourselves as if it was any other bill.

I also do a little trick in my check book. Everytime I put in an entry, I write down the amount (ex $21.25) but I round up to the next $5 increment and deduct that from my running total (ex $25 deducted on $21.25). When I deposit, I round down (ex $143 would be added as $140). At this point, I have an extra $500 in my account. I usually build up about $100 a month or so - depending on what I've done that month. When I hit a certain amount, I transfer it to savings or spend it on something special for myself!

Good luck. The others offered some great tips, too.

T.

EDITED TO ADD: Not sure why this posted twice. Sorry about that. :)

For one month write down every penny you spend. Then at the end of the month, take a close look and figure out where you can trim expenses. Maybe it's eating out less, or buying generic products instead of name-brand. Maybe it's avoiding the mall for awhile or buying young children's clothes/toys second hand. For every purchase, ask yourself if you could do without that item.

Here's what we did that worked:
We created a sheet of paper that got stuck on our fridge with categories like
groceries
household
eating out
car expenses
discretionary (me)
discretionary (husband)
personal care (haircuts etc)

We put some "goals" at the bottom of each category and the rule was that EVERYTHING you spent, you'd save the receipt and write it down on the sheet. (even if you put it on the credit card - that bill would have to be paid each month after all).

We did one sheet per month and made sure that before any of this out of pocket stuff was on the list the mortgage and utilities were paid. Plus, we saved/invested money at the beginning of the month right after getting paid, so we never saw that money.

After a few months we could see where we were spending too much and could cut back, or where our expectations were completely unrealistic (we spent way more on household stuff like Target runs than we thought we did!) It was nice to have a whole year's worth of sheets like this b/c some of this stuff fluctuated from month to month (most of my husband's discretionary money is spent on golf during the summer, whereas mine is more of a slow trickle throughout the year).

Hello since I am in school full time and my hubby works we also have to have a budget. We put the bills in a place where we can see them. As soon as the pay check comes in I pay what I need to pay out of that check. We also use coupons and try to shop on double coupon days along with aldi's. I also when shopping comp others ad's at Wal-mart. I know it sounds like a lot of work but it is more money in our pocket. My family is allowed to eat out one night a week because it is not cheap and money goes fast this way. We have also learned that just because it says Kraft or hidden Valley does not mean that the cheaper brand is gross. I am not sure if you have gas but during these cold months we have caught ourself's wanting to turn the heat up when watching tv only for it to be to hot when we went to bed. Instead we bought (off ebay) electric blanket thorws. I thing that it is also a great idea to set up a savings account. Because it is hard for me to save money I will be starting this new plan at putting 20.00 min in my savings account a week. in one year or right around christmas time I will have 1000.00 plus interest. There is my christmas shopping money. You just have to set up a plan and stick too it. For example instead of renting movies from movie gallery or block buster my family rents form the local libary there free and have the new realease you might have to wait a week to get it but it was worth it to us. We were spending any where for 15.00 to 25.00 a weekend that was 100.00 a month. if you do not stick to what ever you come up with it will never work. Good Luck!!

Hi C.,
We're working on "perfecting" our budgeting skills as well. One thing that is helping a HUGE amount is doing most of our grocery shopping at ALDI'S. I will not go to Dominick's or Jewel after shopping at Aldi's and seeing so clearly that I am honestly paying less than 50% on my groceries. I even did Peapod for a while - where they deliver. Of course, I'm the crazy lady with two little ones throwing fits and trying to get out of the cart, but it's so worth bagging your own groceries. I also like not having to deal with the baggers at some of the grocery stores. The quality of the food is also excellent. The milk is a similar price - a little cheaper, but you pay $1.28 for a thing of apple juice. $1.99 for a frozen pepperoni pizza. The pizzas are heavier than Jewels frozen pizzas and taste better. The toilet paper for a thick 4 pack - you know, the big rolls is $2.20 something. Oh, and you do have to look over their produce - that's something that you do have to watch out on their. You can get really fresh stuff. You can get a whole bunch of bananas for less than a dollar and always get a loaf of bread for .89, cream cheese for .89, a bag of salad for .99. You really do have to check it out! I love that place. I also got toys for the kids there for Christmas. I got a Thomas Carry along set that retailed at Target for $29. At Aldi's, it was $19. I also purchased several cool princess dress up outfits the week before Christmas for $6.
Okay, I don't work for that store and don't know anyone that does but I just think it really helps with the buget in a major way. That and we don't have cell phones and for our internet/cable/home phone we use Wow. It's new and is available in some of the western burbs. It's a great service though - it's $99 per month and it includes unlimited long distance calls, high speed internet and 72 cable chanels, including the on demand and the dvr capabilities. So we can record what we want and not pay an arm and a leg. Also, we get the paper delivered. It's so much cheaper to always at least have the paper to read. Otherwise I would buy a magazine here and there...good luck!