we have a hard time saving as much money as we should. This is partly due to having 2 separate bank accounts with too many credit cards. We are still saving, but not as much as we should be to buy our first home. What is a good rule for budgeting out money? The obvious money that is going out is rent, car loans, utilities, student loans, and food. How do you budget food and how often you go out/what you spend?
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How do you budget your money?
- Thread starter fLum0x
- Start date
i have multiple CCs..but i only use one to keep better organization/track.
also reevaluate spending. so i think every time i shop for groceries i know i will have spent my money better than the previous trip. now i buy in very small volumes because i have lots of things that go to waste... rice and grains-based meals will stretch your dollar alot and lasts longer
also reevaluate spending. so i think every time i shop for groceries i know i will have spent my money better than the previous trip. now i buy in very small volumes because i have lots of things that go to waste... rice and grains-based meals will stretch your dollar alot and lasts longer
HeroOfPellinor
Lifer
What we're going to start doing is downloading all our statements from the bank and credit cards to Microsft Money and then sitting down together once a month to look at how that month's spending went.
fisheerman
Senior member
I was in the exact same boat a long time ago in a galaxy far far away........
actually not that long ago.
The best way to save money is know what you are going to save each month and treat it as a bill. Don't get into the trap of "Ill just save what is leftover each month" cause there ain't going be anything left or it won't be much.
Figure all your bills plus a good living expense.
What I did was figure all my bills and then I figured what should be my weekly expense money. (gas, eating out, bar, etc). whatever was left became a savings "bill".
so every pay day i had the bank withdraw the savings "bill" from the checking to the savings account.
So basically you are saving it before you have a chance to spend it.
Hope this helps you out.
-fish
actually not that long ago.
The best way to save money is know what you are going to save each month and treat it as a bill. Don't get into the trap of "Ill just save what is leftover each month" cause there ain't going be anything left or it won't be much.
Figure all your bills plus a good living expense.
What I did was figure all my bills and then I figured what should be my weekly expense money. (gas, eating out, bar, etc). whatever was left became a savings "bill".
so every pay day i had the bank withdraw the savings "bill" from the checking to the savings account.
So basically you are saving it before you have a chance to spend it.
Hope this helps you out.
-fish
AmpedSilence
Platinum Member
I've found this solution to work quite effectively for me.
Here is the calculator (the link to the article is also there) - The 60% Rule
Here is the calculator (the link to the article is also there) - The 60% Rule
If you know your not saving enough, start saving more. Eat out less. Spend less money on things you dont NEED. Its a good idea to ask others but in reality everyone else is in a completely different financal situation. Everyone is going to have different incomes/bills/hobbies/medical conditions/locations/etc. You completed the first step which was to recognise that you were not saving enough.
My suggestion is take your income and subract all your regular bills (rent/loans/utilities). Then subtract the amount you think you should be saving. What ever is left is used to pay for food/fun etc. If you dont have a lot for food and such start buying generic products and such to save a bit more (or coupons). If that is still not enough start cutting other places like cable and cell phones.
kranky
Elite Member
I suggest you start by knowing exactly where all your money is going. Don't forget to include anything other than taxes which might be deducted automatically from your paycheck. Too many people end up with hundreds of dollars every month that they can't account for.
Really, the problem isn't multiple bank accounts and credit cards, it's not knowing where it's going.
Then start allocating money to the generally stable expenses - rent, car loans, utilities, student loans, gas, car insurance, renters insurance, etc.
What's left is the money you can work with. Decide how much you want to set aside in savings. Whatever is left after that, you split up into categories however you want - food, entertainment. If you have enough money to do everything you want, congratulations. Just make sure you put that money in savings every month first, before you start spending on the optional items.
You might find that that is all you need to do - control the spending on the discretionary categories.
Really, the problem isn't multiple bank accounts and credit cards, it's not knowing where it's going.
Then start allocating money to the generally stable expenses - rent, car loans, utilities, student loans, gas, car insurance, renters insurance, etc.
What's left is the money you can work with. Decide how much you want to set aside in savings. Whatever is left after that, you split up into categories however you want - food, entertainment. If you have enough money to do everything you want, congratulations. Just make sure you put that money in savings every month first, before you start spending on the optional items.
You might find that that is all you need to do - control the spending on the discretionary categories.
HeroOfPellinor
Lifer
Well, if you feel it's that out of control, then you need to preempt it. Have your employers deposit a percentage of each of your checks to a second account that you never touch. It will be easier to "save" if you aren't seeing the money in your main account and you'll kind of force yourself to live within those means.
Also, don't use credit cards. We only use one and it's a rewards card for gas and groceries and we pay it in full each month. Pay cash for stuff or don't buy it.
HeroOfPellinor
Lifer
Ah, student loans? You may want to stop paying them down. I haven't heard a single financial advisor suggest anything other than making the minimum payment on student loans. The interest rate is low enough in almost every case. Whatever extra interest you end up paying in the long run will be dwarfed by the equity/amortization you accrue in your house after only a few months.
It's sounds like you guys are doing well then if everything is being paid off each month. I'm not sure why you'd have trouble saving.
ShockwaveVT
Senior member
From personal experience the trick is to make your savings disappear out of your bank account before you have a chance to spend it. What it took for me was to set up an automatic transfers to an ING savings account every payday that sends a decent chunk of change into savings without me getting to spend it. For budgeting purposes I pretend that money doesn't exist. That way I'm not tempted to spend it.
Another option is to pay your savings an equal (or some %) amount to any spending you do beyond basic needs (rent/heat/water/groceries). So you spend $75 on cable TV, you pay your savings $75. You spend $128 taking your lady out for a nice dinner, you pay your savings $128. A friend did this for a while to save up $ for a down payment on a house.
Another option is to pay your savings an equal (or some %) amount to any spending you do beyond basic needs (rent/heat/water/groceries). So you spend $75 on cable TV, you pay your savings $75. You spend $128 taking your lady out for a nice dinner, you pay your savings $128. A friend did this for a while to save up $ for a down payment on a house.
dullard
Elite Member
I second that idea. Find out where your money is going first. Otherwise no one can help you. I took it to the extreme several years back. I started an Excel spreadsheet and put every expense on it. Spend 25 cents for parking? I put 25 cents on the spreadsheet under car expenses. Spend $1.09 on soap? I put it on the spreadsheet too under Misc.
After a little bit of time, I knew exactly where my money was and was not going. I was stunned to see how much was spent on food, an item that 30 seconds after it is gone, you'll never know if you ate a $5 ribeye or a $50 petite filet. Food money is a complete waste. Note: I'm not advocating geting cheap food that is unhealthy, but just look at your food with a good eye. Compare what you spend eating out to what you spend at the grocery store for example.
Even more shocking was the items I thought were a massive waste of money ended up being a miniscule fraction of my budget. For example, I thought I spent to much money on gifts for various reasons. After looking at the budget, it was far less than 1% of my total money spent. I could double gift spending, and never notice the difference on my budget. So I did, and I've never felt guilty about it.
Knowing where your money is going is 90% of the battle. THEN and only then can you change your ways and find out what to cut that will seriously impact your savings. For me, if I cut gift spending, I wouldn't have had any impact on my savings even though I thought I was spending too much on gifts.
George P Burdell
Lifer
Brain v1.0 tells me where my money is going.
Right off the bat 5% goes into 401k with 5% match.
After that I know that $xxx goes to rent/water (check), electricty (CC), cable/internet (CC), gas (CC), auto gas (CC), cell phone (CC) and food (CC, food has a weekly budget).
If it's that time, I will pay off the CC in full. Nothing else gets charged to the CC unless it is absolutely necessary (new underwear or something of the like), or well thought out and within budget. I pay my car insurance every 6 months on the CC also. Then the rest goes into my INGDirect acct, and I leave $200-300 in the checking acct.
I will save even more religiously once I finish school and tie up my $$ in higher-yielding accounts, but that plan has done me well with the amount of money I make. In the past 4 months or so I have saved more than $5000, so it's possible for anyone to save.
Right off the bat 5% goes into 401k with 5% match.
After that I know that $xxx goes to rent/water (check), electricty (CC), cable/internet (CC), gas (CC), auto gas (CC), cell phone (CC) and food (CC, food has a weekly budget).
If it's that time, I will pay off the CC in full. Nothing else gets charged to the CC unless it is absolutely necessary (new underwear or something of the like), or well thought out and within budget. I pay my car insurance every 6 months on the CC also. Then the rest goes into my INGDirect acct, and I leave $200-300 in the checking acct.
I will save even more religiously once I finish school and tie up my $$ in higher-yielding accounts, but that plan has done me well with the amount of money I make. In the past 4 months or so I have saved more than $5000, so it's possible for anyone to save.
AmpedSilence
Platinum Member
dude, what are you doing? Even when i was unemployed living off of my unemployment check i was still able to save at least 10% of that!
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