budgeting tips?? | Imamother

shoebox

Wed, Aug 31 2011, 1:04 am

I'm taking over the household budget and paying bills. I have never done this before and I am taking over what has been my husbands job since we are married. I cannot do what he has been doing since the reason I am taking over is because our finances are a mess.
So please tell me what works, how to budget, how to figure out where to cut, and any advice!!!

thanx ahead of time!

Tova

Wed, Aug 31 2011, 1:11 am

Have you heard of the envelope method of budgeting? Either with actual cash in envelopes or in an electronic system? It is the recommended method to start people off on budgeting/saving.

Dolly Welsh

Wed, Aug 31 2011, 1:32 am

Get an 8x11 inch notebook that has divisions in it. Buy a calculator. Hide these things.

Think by months. List, and add up, what the basics cost, housing, transportation to work, phone and electricity and gas, laundry and dry cleaning, then a general figure for food. Add in a guess at medical care. Add in a guess for clothes buying. See what it all comes to.

Now add up what is coming in, from all the various sources.

When bills come in, open them, then write, large, on the envelope, how much and when due. Fudge. If it's $126.89, write $130. If it's due Sept 14, write Sept 12 or 13. Place these bills where you can really see them and the kids can't reach them.

Now, think about the rhythm of your income: is it coming in every two weeks, or on the first and fifteenth of the month? Keep all stubs neatly in one place. Keep an envelope for charitable receipts. Keep a careful and clear check register, putting a big black check mark next to checks that have cleared.

Have a personal calendar from Staples called Month At A Glance, or a larger calendar. Write a $ sign to show paydays, on that day. Ask yourself if the bills are for This Pay Period or will fall into Next Pay Period.

Use only 2 credit cards, each from a different major bank. Use only one most of the time, and keep the other just in case of problems with the first one. Pay them off hard, completely, and fast at the ATM.

If you have debt, get a debt consolidation loan. Avoid new debt. Cancel all other lines except for an overdraft line on your checking account. If you use that, pay it off immediately and try very hard not to use it because it costs the earth. It is only there to protect you from the social miseries of bounced checks. Not to use any other way.

Now, start to cook rice, potatoes, pasta and dried beans in the crock pot and stop buying prepared foods to the extent that is practical. Build a wardrobe that never needs dry cleaning except winter coats. Into the cold water wash it goes. DH's stuff excepted.

Check the bank balance by phone almost every day, making those big black check marks next to canceled checks in your check register, and seeing if the remaining balance will cover what has not cleared yet. You can add crudely in your head: round all your check dollar amounts up. Round your balance down. If you have $176.34 dollars left, call it $150. If a check is for $157.98, call it $160. Use round numbers - always exagerating what's going out, and minimizing a little what's still there.

Assign a day-to-day style liquid savings account for DH, for his cash needs, at the ATM, and don't touch it for anything else. Make sure there is always a decided-upon amount in it. You can check the balance, and also transfer money into it by phone. He is not to touch checking, ever.

Automatic payment of bills is good. The various companies will set this up for free, don't pay a bank to do it. But - you have to have the money in there. You don't want to hit the overdraft line.

Keep note in your notebook, note progress, record thrifty ideas gleaned from Imamother and the posters' websites.

This is a ton of work but it gives a nice feeling to be in control of the money beast. It is worth the work and you will get used to it, and better at it. Feel absolutely no shame when you tell your kids, no. We don't have the money for that. But I will make you one. A doll, a toy, a dress. Remain calm, proud and sure of yourself. Never fight, never cry, never feel ashamed. Money is no more emotional than the weather.

Dolly Welsh

Wed, Aug 31 2011, 1:41 am

Yes, Tova, that is what our ancestors did. I think the wooden kitchen table had a drawer in it, where the envelopes were. Great idea. Might be good to have a locked drawer, if it's cash.

Seraph

Wed, Aug 31 2011, 4:49 am

Dolly, I like much of what you said, but disagree about the credit cards.

If your finances are a mess, don't use ANY credit cards. Switch to debit cards only, or better yet, cash only. Once you get your finances under control and are able to do things smartly and not overspend, then maybe you can use credit cards to benefit you, but credit cards are absolutely a no no while finances are a mess.

I suggest writing down all sources of income you have coming in each month. Then write down all the expenses you have each month, including big and little things. First write what you actually think you spend, then keep track over the course of a month every last cent you make. Write it all down in an excell type spreadsheet.

Add up the total you actually spent, subtract it from your total income, and if its more, see what you can possibly cut back to get your spending within your means.

Mrs.K

Wed, Aug 31 2011, 6:30 am

Seraph wrote:

If your finances are a mess, don't use ANY credit cards. Switch to debit cards only, or better yet, cash only.

BeershevaBubby

Wed, Aug 31 2011, 10:11 am

We use Google docs spreadsheets for making our budget. We also use the envelope system.

shoebox

Fri, Sep 02 2011, 5:39 pm

OP here
thanx dolly that was amazingly helpful!!!!!!!!!!!!!!!
I skimmed thru and dont have time to really sit and understand it now, but I will be back.
sounds like youve been there done that :-) I appreciate ure time it took to write the post

Tova

Fri, Sep 02 2011, 6:09 pm

Dolly, can I please give some feedback about your system? I don't mean that you should change what you are doing, because it's obviously working for you and that is the main thing. But in terms of writing basic klallim:

You do not need to check your bank balance daily at all. Just keep a running check register and everytime you write a check, deduct it immediately. Then it really does not matter when it clears. I balance my checkbook twice a month, after each payday and then mark off what clears but that is just to keep on top of it. The bank's balance is really not important. What is important is YOUR check register where you deduct checks when written (includes debit card uses which get automatically withdrawn).

Basically, what I like to do is have subaccounts to help organize things. As well as assign my income to expenses if that makes sense. I'll explain. This year is our first year of paying tuition b"H. We opened up a new checking account just for that purpose. For my son's tuition (which will get automatically withdrawn) and my daughter's playgroup. We assigned my husband's income - kollel checks, leining, etc. - to just about cover that so he will deposit all of his checks into that new account. That leaves my paycheck for everything else. I get paid the last day of the month and the 15th of the month. The last day of the month goes to pay the next month's mortgage, utilities, phone bill, auto insurance, tzedakkah and remainder to general savings. The 15th of the month paycheck goes to credit card bill (this is ALL of our food, toiletries, repairs, etc.) and kid's savings account. There usually isn't too much extra on this one but if for some reason there is more than $100 extra I try to assign it a purpose - either splurge or restock freezer with chicken or put to savings.

3Qts

Fri, Sep 02 2011, 6:25 pm

mint.com
Extremely easy budgeting website that imports all your account, Credit card, Bank, mortgage, investments and lets you know if you going over your budget

Smiling Wife

Thu, Oct 06 2011, 11:54 am

Shoebox how is it going so far? I also took on household budgeting recently ( actually in July). I used good old pen and paper, and a calculator. b"H after a bit of trial and error these past 2 months were good in terms of sticking to a budget and actually being more comfortable with the system. Would love to know what is the progress