Has anyone seen Til Debt Do Us Part? It’s basically about couples who are living far above their means and are in serious debt. In one case, if they had kept living the way they were living, this one couple would have been over $1 million in debt within three years.
Gail, is a financial analysis/hard-ass who comes to their homes, assesses how they’re living, and puts them on a strict cash budget. She separates their weekly budget into these little food cans and basically when the can is out of money for the week, their out of money for that one thing.
So, if the gas can runs out, guess their walkin until next week.
That’s Gail, and those are the cans she always uses, except obviously they usually say things like “Gas”, “Entertainment”, “Groceries” etc. on them.
{Source - also some really good budgetting advice here}
And, of course, they have to put a certain amount of money - as much as they can really - towards their ever-growing debt each month.
I’ve always found this a fascinating way to budget. I mean, it’s simple, if the money in the can runs out, your money is done for the week End of story.
But, for someone who makes a different amount of money each month (me!) that’s hard. Depending on how much freelance work I pick up in any given month my income can vary by as much as hundreds of dollars. So it’s hard to budget an exact amount for groceries, gas etc.
For now, I’m tracking my income and expenses in a spreadsheet that my mom created for me. It’s working out really well and I see that I don’t really spend a ton of money on things that aren’t necessary. I never shop for things like clothing. I think if anything, I could cut down on my “miscellaneous” expenses - a starbucks coffee here, a dinner out there etc.
Another thing that I’m finding it difficult to plan for/deal with is unexpected expenses. For example, just the other day I had to take Webster in for his annual shots. I wasn’t anticipating them or the $120 cost. It’s not that I didn’t have the money to pay for them, it just kind of threw me for a loop, you know?
So, tell me, do you budget? And, if so, how do you go about doing it?
{ 48 comments… read them below or add one }
I budget the Dave Ramsey style, which is planning at the beginning of the month how you will spend every dollar, so there is nothing left unaccounted for. Since I’m working to get out of debt, that means that whatever isn’t going to necessary expenses goes to my debt, but I figure out how much that will be (the best I can; my income also varies) at the beginning of the month and then that payment becomes another bill in my mind, so there’s not room for me to make excuses or exceptions. It works really well for me. I do have a budget sheet where I track most things, but I know my bills so well that I can do it all in my head. A lot of people suggest using an envelope method where you put cash in different envelopes dedicated to certain expenses (similar to using cans), but that just doesn’t work for me. I prefer to use my debt card and using mint.com, it’s easy to see exactly where my money is going.
That’s a really great idea. I think budgeting monthly would work for me!
I’m a big fan of Til Debt, I’ve got a bunch DVR’d so that I can watch them when I get a chance.
Interms of a household budget, we use a spreadsheet that I create every January (seperate sheet for each month) that lists our weekly incomes at the top and then down along the side all the expenses/due dates. Works well for us in terms of paying the bills. Although we could probably do better with “misc” spending too. We do have “Entertainment” & “Allowance” $$ in the budget but we generally end up going over.
I haven’t seen that show but I’m sure I would find it fascinating. I think learning about how other people manage money is really interesting. I’m definitely not a spend what I don’t have person, but I can imagine that if people had parents who did that, they may just find it the norm. I do like the cans/envelopes system, but I agree with Ashley that I’d rather use my debit card and track it with mint.com. Like you, I earn different amounts each month because of tutoring. Tutoring is not as consistent as my full time job because if a kid is sick or as a conflict I lose money that week- if we have a holiday or vacation week, I lose money. Where as these things are planned in my teacher job so we still get paid the same amount even if its a month with vacation. My method is to pay myself first, so I put money into my savings account as SOON as I get paid. Most of my tutoring money goes to savings first- and then is used later (some of it) for those unexpected expenses that come up like you were talking about- when you have a house there are a lot of those
I have figured out approx how much I need in my checking account every 2 weeks to pay my bills and live a frugal but normal life. The rest goes to savings. I only dip into savings for unexpected expenses, big treats (my new bike last year!) and trips. I like my system because it allows me to get to do fun things and buy treats every once in awhile, but it also forces me to examine if I run out of money before the two weeks is up where I went wrong, and then I can’t spend any more money for a few days.
I put a lot of my purchases on the credit card but then pay it off about once a week so that I don’t forget that I spent the money. I basically use it like a debit card with one extra step. Except I don’t mind the step because it will eventually become a nice plane ticket haha.
Also I got a capital one credit card that has travel rewards on it. I’ve already earned $300 towards a plane ticket somewhere
As for you, I don’t think you need to cut down on misc. expenses. You should be able to drink a starbucks coffee or have dinner out once in awhile, that’s allowed (in my expert opinion haha)
Hahaha, aww thanks Kelly. Your opinion definitely counts as expert around here
We use a spreadsheet as well.
I’ve never heard of this show but now I want to watch it! $1 million in debt in 3 years?! That’s insane!!!
I’ve never heard of this show. Sound intriguing.
I don’t explicitly budget for expenses. I have been more aware of how much I have been spending on discretionary items like lattes and books and things like that. I do have a spreadsheet where I track all my different savings accounts. I use that to plan for a future down payment for a house!
I also hate unexpected expenses. Like you, I have the money, but I hate spending it on those annoying expenses.
I’ve put myself on a budget (during Grad School) and stuck to it pretty well! It helped with shopping and not spending too much on groceries - which tend to be my main expenses when I don’t track how much I’m buying!
Those things add up quickly!
I keep it pretty simple - just putting things into an Excel spreadsheet so I can see it add up and see how much is “left” in the allotted amount for the month. Plus, I’m a nerd and I love excel spreadsheets
ha
I’m SLOWLY learning how to budget. Kyla made me an awesome spreadsheet she used for her wedding and I’ve definitely made use of that for ours. It’s a good feeling having a set account solely for wedding expenses so I don’t have to feel bad when I buy that pair of white winter boots for $60 because it’s not an “unexpected” expense. I really want to do something about the more everyday finances though - I like the idea of figuring out how much I can have for a “miscellaneous” budget and just taking it out in cash at the beginning of the week, so if I don’t have it physically on me, I’m not allowed to use my debit card and I can’t overspend. But it’s REALLY hard to commit to
Ya I’ve tried and tried again to only use CASH, but it is really difficult to commit to!
i have an excel spreadsheet that i keep in my gmail files — so i can access it from anywhere!
I usually have a general set of monthly expenses that have pretty much remain the same. so every time we get paid, a certain amount of money goes directly into our joint checking account — this covers our mortgage, condo fees, electric, internet, dtv, cell phones, gym, and the loan to my parents. there’s usually a little left over each month, which is great because it’s gives us a little flexibility if one of the bills suddenly changes each month.
i set up a budget for what i can spend on food and gas each week - usually i stay below. But I don’t really have anything set for miscellaneous expenses — though i’ve been putting $20 into a gift fund. so whenever birthdays and christmas come around, i’m not gonna feel any sticker shocker this time around! and I do put money into an emergency fund which has been building up quite nicely. But i also have wedding expenses this year…. so it’ll be interesting to see how things play out this year.
I do hate those unexpected expenses - it’s definitely not as if we don’t have the money, but it’s just usually not the kind of thing we want to spend the money on!
I absolutely adore budgeting ~ I think it has to do with my background in economics
We have a spreadsheet with a “budgeted expenses” column as well as an “actual expenses” column right beside it, so we can easily compare how much we were SUPPOSED to spend and how much we actually spent and it’s set up so that when we enter a receipt, it automatically calculates how much we have left. There’s a separate section for fixed expenses and variable ones and we use the envelope system (like the can system) for some of the variable ones (eating out, entertainment, etc.) - that helps quite a bit. If there’s no money to go to a movie, we just don’t go! We’ve had a lot of unexpected expenses lately - Baby expenses are hard to predict when you’ve never had a baby before, and of course we need to replace the brakes on both cars (ugh! I think we’ll just do one and park the other one for awhile!), my horse needs her vaccinations and blood tests for show season, our dog needs her vaccinations, the list goes on and on. Thank goodness for income tax refunds!!!
I would LOVE a template of that spreadsheet if you’re willing to share?! Haha, that sounds intense and EXACTLY what I need. Once my mom created the spreadsheet for me I started using it and filling it out but I was always to lazy to create one for myself!
We do a budget at the beginning of each month, and we have tried to use the envelope method for certain expenses. But we have run into several difficulties with it (for us), so I’m currently trying to figure out a different method. I would love to use mint.com, but our bank isn’t supported.
I would LOVE to use mint.com too, but it’s not available in Canada
For start, I LOVE that show! Gail is brilliant and I love her “tough love” attitude! The people on the show amazing me sometimes.
Anyway, I wouldn’t say I have a strict budget for myself, but I try to keep in mind what bills are coming up when I’m thinking about buying something. Like right now, my credit card bill is a little high, so no new shoes for me for a while.
I take $40 out of each paycheck and that’s my spending money until my next payday. Kyle’s far more savvy with money and he’s really helped me figure out what I can afford to spend per month. It’s helpful, especially when we’re trying to save up to buy a house sometime this year. THEN the budgeting will really begin!
That’s too funny, I’m definitely the savvy one with money when it comes to me and Eric. It’s just so hard right now because I’m only working part-time and his work is SO up and down he’ll put in 100+ hours one pay period and like 20 the next. It’s hard to budget when you don’t know EXACTLY how much money you’ll bring in that month!
That’s the funny thing about trades, eh? They’re SOOO up and down right now. Hopefully Kyle will be able to find a sturdy job once he gets all his hours done for his A ticket. It will make buying a house a lot more reassuring, that’s for sure.
I LOVE Gail!! I love that show, it has singlehandedly inspired me to think more realistically about my finances and my future.
I budget each paycheque and allocate the money to where it is supposed to go. I don’t do the cans thing, but every Monday I tak out $100 and that is what gets me through to the next Monday - that covers things like entertainment, mini-grocery shops, clothing, concert tickets, etc. The rest of my paycheque goes to savings and paying back debts (like student loans and small credit card debt).
For some reason I find it difficul to budget monthly. I guess it’s because I never know what kind of surprise expenses pop up and it’s difficult for me to think that widely (at this point in my life).
A blog I love reading is storiesfromacountrygirl.blogspot.com and she speaks a bit about personal finances, in a very real way. She posts her budgets and actual costs and the variables inbetween.
We budget, and we have spent years building a “rainy day” find for unexpected expenses. After living through Hurricane Katrina and experiencing a sudden loss of income we realized we needed to have several months of living expenses in savings in case another hurricane hits. It was tough to build it up while I was in school (basically I cut out all “fun” stuff for months!), but now that we have it it comes in handy for surprise car repairs or unexpected funeral travel. We just make sure we replace what we use.
I totally need to check out that book. My finances aren’t out of control, but I could be doing better.
I understand the boat you’re in - I’m 1/2 in the same one. While I get a regular wage from both jobs I work at, the majority of the money I make comes from tips. I kept track of the money I made for a few months, and then took the LOWEST month and based all my bills and expenses on that. If you keep keeping track, then if your profits go up consistently, then change your spending correspondingly! it worked!
Hmmm, great tip! I will try that!
I started budgeting last year, but then fell off the band wagon, when I started working a second job. I regret that and am trying to climb back on the wagon, as I am back down too one job.
My husband and I are terrible at budgeting. And we have some debt (though, not the kind of debt on that show - not even close). And we’re in a financial situation where we really shouldn’t have any debt. None. That’s why we finally met with a financial planner a few weeks ago. And we have a follow-up appointment with him tonight. Regardless of your method, I think the idea is to be an active participant in your own financial matters. Know what comes in each month. Know what goes out. And figure out the best way to control the outgoing cash. For most people, we don’t even realize that all those little, mindless purchases add up every month.
I think we all know that I do, indeed, budget.
I start my budget by laying down my fixed expenses - rent, bills, groceries, etc. After that I decide how much to put towards my student loan debt/savings. Anything after that is pretty much fair game most months - sometimes I buy things (hello, KitchenAid mixer) and other times I put a little extra towards debt repayment or savings.
The amount I make every month from my full-time job is pretty much set in stone, but my total income varies depending on how many perogies/household items I sell that month. I like to think of that “extra” income as a bonus, and work with it as it comes. So far so good!
Lucas and I aren’t really big on buying things like DVDs, etc. which can really eat up cash. We’re also lucky that I get free beer from work, so we never buy liquor unless I want a bottle of wine or we go out with friends.
I don”t budget. I make sure I have enough to cover my rent, and try not to live TOO outwith my means, but that’s about it. I usually manage okay though. Although I have no savings to speak of. Which is something I need to sort out asap.
That show sounds awesome. I’ll have to check it out. I’m the budget savvy one in the relationship, which can be hard when I like to shop. But, it’s also forcing me to get better bc the bf is working on some debt and I don’t want to be waltzing around just shopping for clothes when I really don’t need to. He’s trying and getting a lot better. Structure (aka some type of budget) would be great for us, but I think he’s feeling too overwhelmed right now to even attempt something like that. He has mentioned that he wouldn’t mind seeing a financial planner though.
My budget strategy goes as far as this…I calculate my expenses for the month +a few hundred extra $$ (race fees, dinners out, etc) and put the rest of my paycheck in savings. I’ve also been really trying to avoid Target or the mall, where I can easily just begin shopping to my heart’s content.
I am HORRIBLE at budgeting. I’ve tried over the years, and always seem to fail. Normally I’m pretty good about not spending more than I make (including bills). So I don’t usually worry about it too much. I have money automatically set aside each month for retirement and savings. The savings don’t last for long though. Luckily my fiancé is much more dedicated to saving then I am. We do plan on coming up with a budget of sorts in the next month or so since we want to get ahead a bit more.
I don’t technically budget, but I keep a spreadsheet of my expenses and am pretty good about keeping it around the same amount each month. I do get thrown for a loop occasionally though…like this month I had to replace my vehicle’s battery and I got the bill for xrays I had in January, which was unexpected (I’ll take you up on that healthcare offer!)
. Like you, I had the money, but it just stresses me out because in my head I know how much I spend each month and this month is going to be more.
One of my goals that I want to start with my next paycheck is to start tracking my spending. Right now, after downsizing, we’re doing OK on the bills front. My mom works 2 jobs and we can pay all our bills with no problem, and still have money left over. (With our old apartment, it would take both of her paychecks to pay rent — with no money left over for food or any surprise expenses. NOT an easy way to live!)
But I do have some credit card debt that I’m trying to gain control over. I have tuition due on Friday but have already planned for that. But I just want to see where my money is going and what I need to cut down to start really paying off my debt. I’m like you: I don’t do a lot of shopping but all those little expenses really add up!
I don’t reaaally budget but I’ve always been very good at saving money. I get paid once a month, on the last day of the month. I pay for rent, my cell phone & my monthly transit fare on the first, my car insurance is automatically withdrawn on the 28th and I pay off my Visa balance weekly. At the beginning of the month I put away a good chunk of my paycheque into my savings account, and any money left over at the end of the month goes into the savings account as well. It isn’t perfect, but by putting the money I want to save into an account that I can’t access via my debit card I guarantee that money isn’t touched. As we’re getting closer to buying a house, I should really be getting better at watching where I spend my money, instead of having a huge chunk of money to spend on whatever I feel like buying. Basically, it works, but it could be better.
Also, I HATE that mint.com doesn’t work in Canada. We desperately need something similar up here.
I’m basically the same way as you. I don’t “budget” but I’ve always been really good at putting money into my savings! When saving up for big things - like Europe - I save more and more. It’s not the saving part that I have a problem with it’s the figuring out where all my “spending” money goes. I swear it feels like it disappears sometimes!
I feel for you, it really is tough on a fluctuating budget. And those unexpected expenses can really throw you off guard! That’s why you need a flush fund for all of them, because the one thing you can count on is that unplanned expenses WILL pop up! I guess the best you can do is estimate how much these random things cost you and sweep some money into a fund especially for it. Personally I like having separate accounts for bills, travel, savings etc, but some people put it all in one big pot and just track the amounts on a spreadsheet.
PS - have you tried Budgetpulse perhaps as an alternative to Mint?
I love when you post about money! I need to buy a book to help me budget better! Im just like you and dont make the same amount each week and its so hard to figure out my budget. After spring break im going to knuckle down and seriously figure out how much HAS to be spent and what i can save and what i allow myself! phew! thats a mouth full!
It seems like unexpected expenses, especially house related, blow our budget every month. Ugh!
I budget pretty simply each month … something like this:
Food - 600
Car - 350
etc.
Then whatever is left I use toward a vacation and to spend.
my husband budgets for us.. it’s ridiculous. we have multiple divisions in our savings account.. future kids, vacation, rainy day, house improvement, saved bills… etc.. depending on my fluctuating income we get an allowance every two weeks.. that we can spend on things for ourselves.. so i typically have 30-40 bucks every two weeks to spend on whatever.. but in the summer like none.. but yeah he is a nazi with the money.
Ummm that sounds awesome. And intense! Haha I am pretty darn savvy with money but not that savvy. And Eric… Well.. don’t get me started
Nah, he’s pretty good with money but sometimes I think it would be nice to have a Money Nazi around to control us both! Haha
This is such a great post. I have been having trouble budgeting and this sounds like the perfect plan for me. I will get out the cash I can use for the week and once it is gone…I guess I am walking.
I have tried spreadsheets and computer programs and always failed….guess I will try this.
We’re really big on budgeting, but we also budget our savings which is a HUGE help for anticipating expenses.
Our method is to figure out our main budget in terms of expenses and then pad the whole thing by 10% in case of unexpected expenses just in general.
But, being an organizational freak we go one step further: what is the average cost of our vet bills, if we have one big annual checkup and one accidental appointment? Take that, divide it by 12, it goes into a savings account and is tracked. What is the cost of one seasonal oil change on the car? Take that, times it by four, divide that by 12, it goes into a savings account and is tracked. We also save 2% of the value of our home for repairs, and have broken down the approximate cost of a big fun trip and divided it by 12 too. Before we were married and merged our finances, we had a joint bank account and paid into it on this basis for any shared expenses and any shared savings (like trips).
It’s slightly anal, but the reality is that there is NO guessing at all about the money in our accounts. If something goes wrong we have the money, no questions asked, no wondering, no fighting. Padding our whole budget by 10% has also helped us to keep our vision of our finances extremely reality based- just because we have a spreadsheet doesn’t mean we won’t mess up - and it has helped us save a lot faster than we would have without a plan.
I don’t really have a budget, but I do track my expenses on a spreadsheet every month. And while I do have a credit card, in general I pay it off at the end of every month, I guess I send within my means. It does help that like you I don’t really splurge, unless you can’t Starbucks coffee or meals out. If anything there’s where my money goes because besides food I don’t buy a lot for myself.
My parents have been on a budget for the past several years. It used to drive me crazy. Now they’re retired. At 45. (They use the same jar-style method that’s done in ‘Til Debt Do Us Part, except with envelopes.)
My budget hasn’t been as successful…
Great post A! I’m lovin’ Mint.com. I can’t wait to check this out though. She sounds like she really knows what she is doing. With Mint I’m watching where my money is going right now and then I plan to tighten my purse strings a little more. Maybe save up for a vacuum…yeah that would be good!
I dont have a budget though I really should. I have been more careful in the past few months with watching what I spend. The cash thing, doesnt work for me. If I have cash I have no idea where it goes. With my debit card I can better track and its easier for me to see where my money goes. If I have cash I’ll spend it without thinking. Sites like Mint.com dont work for me because I use a small hometown bank. I do ok, but I know I could do a whole lot better.
I got super uptight when I have to make an unexpected purchase. Like for example when I have to take my car in for maintenance. It’s not that I don’t have the money in savings to pay for, it’s just that I haven’t planned for it, so I freak out and go into lockdown mode for a while on spending. Probably not the most mentally healthy way to deal with big expenditures.
Eeeep I have a love hate with budgeting!! I’m the one that runs the numbers each month and for months in advance. Because we know how much we both make and when we’re getting paid andddd when and how much our automatic bills are, I have it down to the penny. Then the “other” things like bus passes or if its cheaper that month for bus tickets, groceries, toiletries, date nights and anything like the dentist, haircuts, classes, gas in the car and savings. Then anything that’s left is cut in half and put towards extra savings or a bill. Right now we are TIGHT…..we’re trying to pay a bunch of things this June before the baby gets here *_* Like the car a whole year early, credit cards and taxes. It makes me wish we could have done this earlier, we make more then enough money to not have any debit but we liked to live “in the moment” instead of paying things off and being set free sooner. I have to say the love part of budgeting is finding the little ways to save……lol….this is fun because we didn’t do it before, so simple things like coupons, or finding things on sale, or my recent huge on was saving us $2000 a year on the insurance for our two cars and house!!!! YAY ME!! Also we started making supper everynight and making enough to have left overs for lunch the next day, which saves us $100/week in not buying lunch and it cuts down about $60/week on not buying lunch stuff like soups and uncle bens rice lol I’m sure we’ll keep it up even after June, it just makes sense