Budgets...What do you do?
- Thread starter shineyourlight
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L
Me and my husband do the Dave Ramsey thing too...
We budget our bills every month, choose what we want to spend money on... and he puts 200 out of his check to savings and I put 100 of my check into savings when we both get paid.... and since we are now about to move into our first house... I think we are doing pretty darn good!
We budget our bills every month, choose what we want to spend money on... and he puts 200 out of his check to savings and I put 100 of my check into savings when we both get paid.... and since we are now about to move into our first house... I think we are doing pretty darn good!
Interesting. A woman on a budget. Are you being serious?
I'm going to get clobbered.
Burn those credit cards. In the hands of woman, they are dangerous.
I'm doomed.
I'm going to get clobbered.
Burn those credit cards. In the hands of woman, they are dangerous.
I'm doomed.
Anyways, in response to your FIRST response, thank you for that advice
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G
Woah. Your first comment was wonderful...but now this response is coming off as judgmental and sexist. What happened? Am I misinterpreting this?
Anyways, in response to your FIRST response, thank you for that advice
Anyways, in response to your FIRST response, thank you for that advice
I said I'm doomed.
Glad my first helped.
Blessings
H
if you're single, and one form of income, i'd look at 6 months of expenses set aside for emergency. if you have a second source of income, 3 months would typically be the recommendation. (for married, if one spouse works, 6, dual income home 3)
the reason why you want to have your emergency fund segregated - it provides a buffer between you and incurring additional debt, or tapping into retirement funds. also, peace of mind.
logistically, i would locate your bills and statements for the past quarter to a year, and identify exactly how much it costs you to live each month so you can calculate your target goal for the emergency savings - set up your payroll so that it comes directly out until you reach that target.
whenever you have to dip into the emergency fund, pay yourself back until you're back to the original calculated amount
after that, max out your retirement contributions, in a roth/traditional ira (can do 5500 aggregate between the two for 2015), if you're considered self-employed, i'd take a look at sep ira/solo 401k options
also, the nice thing about roth iras - you can withdraw your principal tax free at any time, (all of it is eventually tax free) and one of the exceptions to 10% early distribution penalty (which would be applicable to the earnings portion) is for qualified education expenses - the point being - good source to dip into for education expenses
you have the best advantage right now - TIME. (good basic tool to use is a time value of money calculation, can google for a tvm calculator online, but it's a great way to break down how much you should be contributing, what rate of return you should be aiming for etc, for planning. i find it SOOOO helpful for educating people)
if it was me, my priorities would be 6 month emergency, then max out retirement contributions, then funnel your income into your other goals and investments.
when you add other things into your life like marriage, children, buying a home, starting a business, then the priorities kind of shift towards things like making sure you have adequate insurances, health coverages, tax efficiency, estate planning, etc
i currently have everything set to automatically contribute to my savings, retirement, and investment accounts from my paycheck (before i can even see the income), and then i manually pay my bills online and other various things.
im frugal about some things, not so frugal on others- i dont have a landline, no cable, i dont purchase physical books/cds/dvds
food - i cook most of my meals, including packing lunch for work.
credit - i personally use a credit card to earn cash (i immediately pay it off, on the same day of a purchase). my thought process is that i may as well be paid on money i was already going to spend
you can find a lot of budget spreadsheet templates online, or a lot of banks will allow you to export your transaction data from their website to excel or quicken so you can manipulate the data as you please -
the most important thing is to have some type of plan, defined in writing, so you have something that you are working towards, and revisit it once a quarter or as needed to evaluate if any changes need to be made (probably preaching to the choir here, miss lifecoach)
the reason why you want to have your emergency fund segregated - it provides a buffer between you and incurring additional debt, or tapping into retirement funds. also, peace of mind.
logistically, i would locate your bills and statements for the past quarter to a year, and identify exactly how much it costs you to live each month so you can calculate your target goal for the emergency savings - set up your payroll so that it comes directly out until you reach that target.
whenever you have to dip into the emergency fund, pay yourself back until you're back to the original calculated amount
after that, max out your retirement contributions, in a roth/traditional ira (can do 5500 aggregate between the two for 2015), if you're considered self-employed, i'd take a look at sep ira/solo 401k options
also, the nice thing about roth iras - you can withdraw your principal tax free at any time, (all of it is eventually tax free) and one of the exceptions to 10% early distribution penalty (which would be applicable to the earnings portion) is for qualified education expenses - the point being - good source to dip into for education expenses
you have the best advantage right now - TIME. (good basic tool to use is a time value of money calculation, can google for a tvm calculator online, but it's a great way to break down how much you should be contributing, what rate of return you should be aiming for etc, for planning. i find it SOOOO helpful for educating people)
if it was me, my priorities would be 6 month emergency, then max out retirement contributions, then funnel your income into your other goals and investments.
when you add other things into your life like marriage, children, buying a home, starting a business, then the priorities kind of shift towards things like making sure you have adequate insurances, health coverages, tax efficiency, estate planning, etc
i currently have everything set to automatically contribute to my savings, retirement, and investment accounts from my paycheck (before i can even see the income), and then i manually pay my bills online and other various things.
im frugal about some things, not so frugal on others- i dont have a landline, no cable, i dont purchase physical books/cds/dvds
food - i cook most of my meals, including packing lunch for work.
credit - i personally use a credit card to earn cash (i immediately pay it off, on the same day of a purchase). my thought process is that i may as well be paid on money i was already going to spend
you can find a lot of budget spreadsheet templates online, or a lot of banks will allow you to export your transaction data from their website to excel or quicken so you can manipulate the data as you please -
the most important thing is to have some type of plan, defined in writing, so you have something that you are working towards, and revisit it once a quarter or as needed to evaluate if any changes need to be made (probably preaching to the choir here, miss lifecoach)
C
Wow... that's all so complicated... or I'm just a simplist... hehehe
I only put money on my savings account... and manage that... everything else goes into the monthly budget...
I pay everything by credit card, so I can use the points to travel and save on that, and that's pretty much it... not much fuss!
I only put money on my savings account... and manage that... everything else goes into the monthly budget...
I pay everything by credit card, so I can use the points to travel and save on that, and that's pretty much it... not much fuss!
J
Budgeting! I do that daily for my clients! SYL - I am super proud you are planning ahead! EVERYTHING you can put away is important. Make sure you are earning money on the money! An EMERGENCY FUND is important, just as a vacation fund is. Keeping accounts separate...making the contributions as if they were a bill with a minimum of $50 per a month to be taken directly from the checking into what ever account you are using to separate them. Then if you can add more, do so. DO NOT rush into the stock market, annuities, etc. Unless you truly understand them. DIVERSIFICATION is the key to make the money grow. However if you do not like risk, do not take it. To simply have separate savings accounts even with the piddly interest rates is better than nothing at all. Good Luck.
People don't realize that the problem with savings accounts is that they're often causing you to lose money.
I was looking at some credit union rates today (which are supposed to be better than banks), and the going rate interest rate even on their money market savings account was 0.01%!!!
If inflation is at 2%... you're losing a significant amount money (because the cost of living is going up 2% a year and you're only earning 0.01% on your money.)
It's not that one shouldn't use a savings account, it's just that a person will likely never get ahead if that's all they rely on.
I was looking at some credit union rates today (which are supposed to be better than banks), and the going rate interest rate even on their money market savings account was 0.01%!!!
If inflation is at 2%... you're losing a significant amount money (because the cost of living is going up 2% a year and you're only earning 0.01% on your money.)
It's not that one shouldn't use a savings account, it's just that a person will likely never get ahead if that's all they rely on.
H
So much this. Inflation is real, and people DO lose purchasing power. It's just as important as investment risk.
you don't have to take a crazy amount of risk if you are just looking to keep up with inflation, there are a lot of strategies available from conservative bonds and bond funds, preferred debt, a whole universe of etfs, divided paying utility stocks, that yield more than the best savings account rate or cd available at any bank or credit union. You just have to review the risks associated with the investment, and there are so many tools and research readily available to help with making those selections. (Or for those who would rather be hands off, there are professionals who can assist)
Many may find it a tad extreme, but I just invest everything I don't readily need liquid for emergencies... because of what seoulsearch just pointed out- less than a tenth of a percent does absolutely nothing for me.
you don't have to take a crazy amount of risk if you are just looking to keep up with inflation, there are a lot of strategies available from conservative bonds and bond funds, preferred debt, a whole universe of etfs, divided paying utility stocks, that yield more than the best savings account rate or cd available at any bank or credit union. You just have to review the risks associated with the investment, and there are so many tools and research readily available to help with making those selections. (Or for those who would rather be hands off, there are professionals who can assist)
Many may find it a tad extreme, but I just invest everything I don't readily need liquid for emergencies... because of what seoulsearch just pointed out- less than a tenth of a percent does absolutely nothing for me.
S
Lots to touch on. Some things I've been taught:
- Find accounts with a good rate of return (in other words, avoid savings with banks or even credit unions; they're laughable).
- If you have more than one debt, look into Dave Ramsey's "debt snowballing" (also known as "debt stacking").
- An emergency fund is not a bad idea and you don't have to contribute to it forever.
- Don't buy what you can't afford.
[video=youtube;Qb8hTzUoI54]https://www.youtube.com/watch?v=Qb8hTzUoI54[/video]
- Find accounts with a good rate of return (in other words, avoid savings with banks or even credit unions; they're laughable).
- If you have more than one debt, look into Dave Ramsey's "debt snowballing" (also known as "debt stacking").
- An emergency fund is not a bad idea and you don't have to contribute to it forever.
- Don't buy what you can't afford.
[video=youtube;Qb8hTzUoI54]https://www.youtube.com/watch?v=Qb8hTzUoI54[/video]
C
That is true... but I don't really understand all these different investment stuff, and I don't like to dabble in what I don't understand... so I end up with the savings account... there are the monthly bills, taxes, trips, mortgage... it's too much to handle... I need to keep things simples... or else I'll loose track of things...