Need help budgeting/saving money.

superhappypanda

Crux of the matter is that I'm terrible with money. I tend to be pretty impulsive and that doesn't help with the cash.

I was hoping some folks might have some advice on what has worked for them in the past to start budgeting, saving some cash, pay off their bills, and get a decent amount of cash in savings in case you get laid off and need to live off savings for 6 mos to a year.

Lord Palington

For basic savings and budgeting, Dave Ramsey has some pretty good ideas. You can listen to his radio show (beware: he has weird ideas on macroeconomics and is kind of conservative), and I do like his 'get rich really slowly over time by being responsible with your money' message. Instead of, y'know, some get rich quick scheme.

But he's got a format for budgeting, paying bills, etc that might be a good starting point.

Varinn

An accountant I talked to in the past once gave me some incredible advice on saving.

Make more money, or spend less.

Brilliance! But really the key to saving money (as far as I have seen) is to do an honest sit down and review of all your expenses. Go through all of your bank and creditcard statements for a few months and note your income, in comparison to your spendings. Impulsive buying is absolutely murderous for your savings account, finding what it is that is the bane of your self control is key to cutting this off.

Look into your cell plan and cut back the excess to tailor your plan to your own personal needs. Driving to the store? walk. It's the little things that add up the most, only you can decide what you feel is important enough to allow yourself to spend and what is excess weight.

It's amazing how quickly the little things add up to be huge drains on your bank account. Take for example eating out, that $10-$15 fast food meal 5 days a week is suddenly up to $300 a month. Starbucks every day? $125 a month. Can't resist buying the new games right when they come out? $50-$60 each a few times a month, let's call it $180. I don't know where your downfalls lay so take a look at your bank statements and find the sub $20 purchases that are showing up often. Add them up and sit back in awe of how much you TRULY spend on those little trinkets or snacks.

Entriech

Regarding managing individual finances, I'm a big fan of Gail Vaz-Oxlade. She's an author/TV show personality, but I've always found her advice to be pretty solid. She's got a great site and blog that she posts to regularly, including resources on building a budget and tracking it.

She's got a good guide on creating a monthly budget using an interactive worksheet she provides here. I used some of this notion to make my own Excel spreadsheet that I use to budget and track expenses, and it's done a lot for keeping our household in control of its finances.

Poke around her site, and see if her ideas work for you. Or look up some of her TV shows to get some general overview. I've always found them to be entertaining (if not educational).

nhod

The company I work has a savings plan which will automatically withdraw X% of my paycheck to a separate account not associated with my normal bank. It provides a nice buffer that forces me to save and budget as though I make X% less.

I would also recommend checking out David Chilton's work, The Wealthy Barber/The Wealthy Barber Returns. Very good resource there, with the concepts explained pretty clearly.

superhappypanda

Thanks for the advice so far. I've started keeping some tabs on where my money has been going lately and the biggest offenders are eating out and hobby related stuff of which has been curtailed. Eating out is still a challenge to cut back on but I'm working on getting better and packing a lunch for work. Some nights though, I just don't feel like cooking and wind up getting take out which in Seattle can add up real fast as food out here tends to be pretty pricey.

I don't drive much and can usually get by on about $20-40 a month on gas. The majority of my transportation is by bus and my work pays for my pass on that.

NightDragon

superhappypanda wrote: »

Eating out is still a challenge to cut back on but I'm working on getting better and packing a lunch for work. Some nights though, I just don't feel like cooking and wind up getting take out which in Seattle can add up real fast as food out here tends to be pretty pricey.

Try cooking in bulk, and eating leftovers...or freezing the leftovers. It's cheaper to buy food in bulk, and that way you don't have to cook every night. Another plus is that if you do this a few times, and freeze leftovers...you can have a choice about which meal to have during the week, and all it requires is some reheating.

kaliyama

it would help to break down your expenses for us, because (a) we can give more relevant advice and (b) the act of tracking itself is likely to make you more cost-conscious.

TychoCelchuuu

If you buy most/all things with a credit card or are good about putting in your purchases manually, mint.com is great for tracking expenses and finding out where you can cut back.

djmitchella

youneedabudget.com has worked amazingly well for us -- it costs money, and it took a couple of months to get into the swing of things, but it makes it much easier to track where money is coming from/going to now we've got into the habit. Even if you don't use their software, they have a good method for tracking your finances, which you could convert to Excel/googledocs/whatever.

http://www.youneedabudget.com/method/rule-one

for how they suggest you do things. (disclaimer: I'm not associated with them in any way, just a happy customer)

zeromyst

double post - ignore this

zeromyst

1 - Use a spreadsheet to track your spending (if you do not want to use an online service i.e. mint.com). This is good because you see where you money is going. Save your receipts and update it once a week.

2 - This may vary on your situation but deposit at least 10% of each paycheck in a savings account. If you can deposit another 5% in a separate emergency fund account (car repair, home/apartment repair, health, etc.)

3 - Create weekly budgets - for example

$600 per week

$40 Household Items (laundry detergent, soap, trash bags, toilet paper, etc.)
$60 Gas/Transportation
$100 Food
$300 Bills (cell phone, cable, internet, rent/mortgage, etc.)
$100 Entertainment (movies, gaming, concerts, shopping, etc.)

Anything left over at the end of the week roll it into the following week. If you have any left over by the end of the month roll it into savings and/or emergency fund accounts.

Challenge yourself to live off a certain amount of money per week. Don't starve yourself though, lol

4 - Check out these blogs

getrichslowly.org (has some good articles - try the older articles first - early 2012 and older)
wisebread.com
lifehacker.com/money/
fivecentnickel.com

NightDragon wrote: »

Try cooking in bulk, and eating leftovers...or freezing the leftovers. It's cheaper to buy food in bulk, and that way you don't have to cook every night.

100% agree - did this in college and still do it today.

crashhelmet

NightDragon wrote: »

superhappypanda wrote: »

Eating out is still a challenge to cut back on but I'm working on getting better and packing a lunch for work. Some nights though, I just don't feel like cooking and wind up getting take out which in Seattle can add up real fast as food out here tends to be pretty pricey.

Try cooking in bulk, and eating leftovers...or freezing the leftovers. It's cheaper to buy food in bulk, and that way you don't have to cook every night. Another plus is that if you do this a few times, and freeze leftovers...you can have a choice about which meal to have during the week, and all it requires is some reheating.

This. I do this to not only save money, but eat healthier too.

Every Sunday I spend about an hour cooking chicken, brown rice, and vegetables to have for lunch through the week. Sometimes, if the chicken is on sale, I've got some extras for dinner as well. All in all, it averages out to about $10 a week. That's a hell of a lot better than the average of about $7 per meal at a fast food place or $15-$20 in a restaurant.

A lot of people think they don't have time to cook. If you have time to do laundry or play video games, you have time to cook. Multi-tasking is your friend.

Thundyrkatz

pay your savings account like a bill. We have ours do an auto withdrawl every week from our account.

Create a budget, but be honest with where your cash is going. don;t leave any slush for stuff like coffee in the morning, this can add up fast.

we have multiple accounts, this helps us segregate the cash. if its all in one checking account, we tend to overestimate how much money we have to play with.

I have a separate play account, and pay myself an allowance each week. That's my play cash, and when its gone its gone. till next week.

Have a goal!

Griswold

For me, setting up automatic deposits to savings/401(k) was the best method for me. If I never see the money, I can't spend it.

As far as actually curbing spending, I've found it helps to have barriers between me and my money. I noticed that if I carry cash, I tend to spend that cash, so I only carry a small amount and take more out only when I know I'm going to need cash specifically (cab fare, nights out). Try to force yourself to consider big purchases for 24 hours before committing. And, if you're like me and hate grocery shopping, buy non-perishable/freezable shit in fairly large amounts. Even like a Stouffer's lasagna is ~half the cost of eating out at most fast food places.

Essee

Griswold wrote: »

And, if you're like me and hate grocery shopping, buy non-perishable/freezable shit in fairly large amounts. Even like a Stouffer's lasagna is ~half the cost of eating out at most fast food places.

This is actually something I was gonna say... just 'cause you don't want to cook doesn't mean you have to go out to eat. Have some soup kicking around or something, man! You can definitely eat a decent meal for <$5, or whatever you're paying by going out. Depending on what you buy, you can probably even eat for <$3 (watch for sales on stuff you're cool with eating). The only reason I'm sometimes personally able to eat out for decent prices is I eat, like, half of what normal people do. And I'm starting to eat more, so that won't even help me.

Obviously cooking is better, but I feel you on not wanting to cook all the time. I'm really trying to work on "just cook stuff, for crying out loud, it isn't that hard"... but until I get into the habit, at least I'm eating cheaper than going out all the time (even without resorting to stuff like ramen).

saint2e

Something like mint.com might help you track your spending habits, setup budgets, and warn you when you're nearing your monthly limits.

If you're comfortable with a website doing that, that is.

Mugaaz

I think most of this stuff about buying in bulk, walking instead of driving, etc. is all really fluff advice. It's such a miniscule difference and not worth the mental effort. I think there's only 2 things you really need to focus on:

You should pay off your debt and live debt free as close as possible with exceptions for car, college, home as needed. Paying interest on debt is the fastest way to poverty. If you have debt pay it off as fast as you can without endangering yourself.

After that I'd spend 90% of my focus on figuring out how to earn an extra dollar, not on how to save 25cents. Making more money is paramount, making more allows you to save more, which allows you to earn interest on your savings and investments. People just don't put enough focus on making more money. I've had several large income jumps in my career. These income jumps brought in more money than I could ever have achieved by saving through bulk buying, walking, higher gas mileage car, owning instead of renting, etc. Also, focusing on making more money is going to save you money through spending differently, the money you'd normally use on entertainment goes into things that improve your skills or education.

If you're having problems with constantly impulse buying TVs, computers, and tablets I don't think you have a budgeting problem, you have other problems and they are destroying your budget as a side effect of the real underlying issues.

LadyDustBunny

Dave Ramsey has worked great for my husband and I (we have a 19 month old daughter too). My husband created an excel sheet (b/c he loves doing these things) and we have little budget meetings at least twice a month ( middle and end of the month). It's a great way to keep focused on our goals and recently our dishwasher broke (granted the thing was about 10-15 years old) and we were able to purchase a brand new one with cash without having to worry because we had prepared with a buffer for just this sort of thing.

Bowen

Superhappypanda : how comfortable are you with giving specifics?

Generally it goes something like:

20-30% for housing (rent)
10-15% for transportation
15% for utilities
10% for food
20% for general savings
5-10% for retirement (aim for the upper echelon if you have employer matching on a 401k)

darqness

I used to have a weekly auto-deposit from my checking into savings the day after payday. Usually $50-$100 a week. I noticed that if the money wasn't there and easily accessible, that I wouldn't spend it.

EWom

I want to try some of this advice as well. My wife and I are horrible with money, and the number one, beyond a shadow of a doubt offender is, eating out.

I like the idea of a spreadsheet, does anyone know of an open source/legally free spreadsheet program? I don't want to upload all this stuff to the internet, I'd rather have it on my laptop. Because we don't currently have internet at home.

TychoCelchuuu

LibreOffice is free.

Slo

Put a 20$ bill in a narrow scotch bottle (or, for the less refined, some other alcohol.) every week/paycheck/what have you.

Being UNABLE to get at it without breaking said bottle is a great incentive to leave it in there. Break it when you have a problem/want to deposit it/reached your savings goal.

It's basically a visible (And therefor more rewarding IMO) small time deduction on your paycheck.