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Budget - it's never too late



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amother
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Post Tue, Apr 05 2016, 6:25 pm
Is it?

I would like to attempt to start budgeting. I read that one needs to keep track of their spending for 3 months, write everything down, and at the end of the 3 months u see where you've spent what. But how does one know how much to allocate for their various household expenses? Ie food (which the price fluxuates so often), how much everything SHOULD cost I.e. groceries per week, clothes, gifts, household emergencies.
I'm sure there are loads of websites out there with good ideas.

Any recommendations?
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seeker




 
 
    
 

Post Tue, Apr 05 2016, 11:43 pm
The point is that after keeping track for 3 months, you'll have an idea of how much to allocate for each expense.

food prices don't fluctuate so much, so often. Once in a while there's a big blip like when egg prices shot up earlier this year, but usually they stay pretty steady. Sales go in cycles, but unless you specifically wait for sales before buying anything it all evens out. I do groceries per month, not week, because I don't buy new food every week - I stock up on non-perishables on sale and only replenish produce every week.

Emergencies are separate from your budget - you should budget to put aside a certain amount of money each month to save for when an emergency comes up but the point is that you can't predict when and how much you'll need.

Clothes and gifts tend to average out over a year or so. I find clothes the hardest thing to budget for because it's so hard to predict. The kids grew quickly as babies, then slowed down, but then their clothes got more expensive and then trends started to matter. I was rolling along fine on my pre-existing wardrobe for a couple of years and then suddenly it all got old and died at once (or seemed to, anyway.) Etc. What I did was basically set an arbitrary number to budget toward clothes based on how much money was left after the easy things were accounted for (I.e. tuition and rent which stay the same, followed by food, gas, and metro cards, then a portion of what was left became the clothes budget.) If I don't need to buy any clothes one month, that money goes toward the next time I do need. When I do need, if it's more than the budget, I think really hard about how much it's an actual need and sometimes borrow against future budget, but if I see that it's constantly never enough then I know there was something wrong with my budgeted number in the first place.

I find mint.com very useful because there is no way I'd be able to keep track of all that myself.
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little_mage




 
 
    
 

Post Wed, Apr 06 2016, 7:23 am
Kosheronabudget.com is great. She recently did a series on how to build your budget. We used mint for a while, but now we're using You Need a Budget. It's not free, unlike mint, although they do have a free trial. They also have a bunch of budgeting classes on their website, although I don't know if you can access them without signing up. A lot of people really like Dave Ramsey. I didn't find him all that useful, but we don't really have a lot of debt and my husband is completely opposed to a cash system.

I think focusing on "should cost" is an unhelpful way to think. There's too much variation regionally. Not to mention that people have different priorities. My husband and I don't own a car, partially because we don't want to spend the money on it, but we absolutely want to spend the money on amazon prime. Now, that is obviously just a personal example, but other people might make different determinations.
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