Comments on: Actual vs. Budget Report, January 2008

By: thomas

thomas — Wed, 13 Feb 2008 05:34:51 +0000

I ran a budget last year and even though it didn’t keep my spending in line necessarily, it did help me plan for other events.

I was able to contribute more to my ESPP plan, make sure I maxed out my IRA, and even increased my 401k.

As mentioned in one of the comments, the big concern is finding out where the hot spots are. Spending too much eating out or at Target can be a killer.

By: PT

PT — Tue, 12 Feb 2008 21:05:54 +0000

Flexo, I agree with your thoughts on budgeting. Like you, I did a Jan budget, but after doing the actuals I realized it’s mainly to keep me focused on eliminating the frivilous spending in a couple of categories.

Therefore, my only suggestion would be to dial in a bit closer on the categories you are really concerned about. For me, I see myself moving towards a food/entertainment/houshold goods ONLY budget. Everything else, is either quasi-fixed (utilities) or changes radically from month to month (vacations).

Thanks for posing the question. It really got me thinking about why I actually budget.

I use a monthly tracker to assist in paying bills on time. Maybe the tracker in combination with the food/ent budget is a good solution.

By: Flexo

Flexo — Fri, 08 Feb 2008 20:19:15 +0000

djc: I’d rather keep all of my financial information in one piece of software, which at this time is Quicken (and Excel for spreadsheet manipulation). Adding a separate, incompatible piece of software would require me to keep up-to-date financial information in more than one place. Despite the relative ease of YNAB, PearBudget, and other online tools, I’d rather not add to the amount of work I already do.

By: djc

djc — Fri, 08 Feb 2008 20:15:06 +0000

Why not use “You Need a Budget”, then you can see budgeted vs actual at every step of the way as you go along? With the new account tracking in the latest version of YNAB Pro it is even easier to use.

By: Matt

Matt — Fri, 08 Feb 2008 13:54:31 +0000

Personally I don’t like budgeting but like you I understand its usefulness as a tool. You might be surprised at the all the little details it unravels in your spending. Though I do have to ask shouldn’t your budget be fluid? if you’re all of a sudden going to be paying more or less for something why keep that budget item fixed to the original amount?

By: Andy

Andy — Fri, 08 Feb 2008 02:14:17 +0000

Budgeting is a good habit – but budgeting is good for determining how you spend, it doesn’t control why you spend. However as a first step, budgeting is good, but to really benefit and save you should review your spending habits. I have written a few articles on this topic at my finance blog as well. You have a lot of useful information on this blog and will be adding it to my blogroll for regular reading.

By: SavingDiva

SavingDiva — Thu, 07 Feb 2008 19:26:17 +0000

I agree with Megan. I also edit my budget monthly. I try to make sure that I’m hitting all of my year end savings goals, but I switch it up every months.

By: Bryan

Bryan — Thu, 07 Feb 2008 19:07:48 +0000

My wife and I use a budget that takes into account both of what we earn, and then leaves us with proportionally equal amounts leftover to spend on “whatever”.

An explanatory video and template spreadsheet are available here.

By: Flexo

Flexo — Thu, 07 Feb 2008 16:28:53 +0000

MF: Here is my 2008 budget.

By: MF

MF — Thu, 07 Feb 2008 16:14:41 +0000

Flexo-
Do you have this budget posted somewhere?

By: MF

MF — Thu, 07 Feb 2008 16:11:09 +0000

Ed-

I’d love to see that report. I’ve made quite a few over the past year. I’d love to see another one. Can you post it somewhere? divshare.com putfile.com etc?

By: Ed

Ed — Thu, 07 Feb 2008 15:30:31 +0000

I have a more detailed one that I made over the past few years. I can send it to you if you would like.

By: Flexo

Flexo — Thu, 07 Feb 2008 14:59:30 +0000

Thanks for the correction, Dan. I’ll have to wait until this evening to fix the chart, but you’re right, I was using the wrong calculation for the total variance.

By: Dan

Dan — Thu, 07 Feb 2008 14:46:52 +0000

I like to budget monthly as an exercise to remind myself of my goals and make sure I put my money towards them.

Hate to nitpick, but your math in the variance column doesn’t add up correctly. Your surplus variance is $2,466, not $4,367.

By: The Saving Freak

The Saving Freak — Thu, 07 Feb 2008 14:05:38 +0000

To make our budget run smoother, and rack up some rewards, we started using a credit card to pay all of the utilities. This meant that we knew exactly what the bill would be for that month because the sum total was already known. Now we have now surprises just a credit card to pay in full.

By: Megan

Megan — Thu, 07 Feb 2008 13:47:14 +0000

If you know that you’ll be over budget in one category for the rest of the year, why not edit that budget category? I budget monthly rather than yearly, so some months, I up a category if I know that I’m going to be spending more. I use zero based budgeting and try to set aside a fixed amount of money, so if, say, I know that I’ll be spending more on travel one month, then maybe I’ll cut my spending on entertainment. I would suggest editing that category so it truly reflects what you expect to spend, rather than just planning to be over budget for the majority of the year.