For fun, I created a quick poll below. But I was also wondering if you follow a particular budgeting approach, like zero-sum, envelope, or 50/30/20. My answer follows below.
I never make or follow a budget.
I prefer to track my spending rather than following a budget.
I make a budget, but don’t really stick to it - and I’m ok with that.
I make a budget, but don’t really stick to it, and wish I did.
Personally, Tiller Money has transformed how I budget.
I use a modified version of the 50/30/20 budget. It’s more like a 40/30/30 budget, with 40% going to living expenses, 30% to savings and investments, and 30% to “everything else.”
However, I don’t strictly follow this budget. Instead, I use it as a planning tool to set financial priorities.
This approach only works for me because my saving and investments goals are automated. That money leaves my main bank account before I even see it.
My primary financial practice is obsessive tracking of my spending.
I check in and categorize my latest transactions each day. For this job, Tiller Money has saved hours of data entry. Read why I think Tiller is the best tool for tracking spending.
This is kind of hard to categorize. For us, we’ve automated much of our budget (bills, savings, house projects, and investments) so we what we track is the spending. Most of our conversations are about checking in with each other about whether we felt it fit in with our goals and current situation.
An example - some months we got out to eat more. We may ask ourselves was it worth it and adjust accordingly.
So we have a budget, but the week to week conversation is about spending.
We have a monthly budget based around categories (bills, living necessities, and a couple ‘niceties of life’), which really helps knowing our bottom line and what can be cut when something unexpected comes up. Bills are automated out of a separate bank account, so they’re pretty hands off.
Everything beyond that is more about adjusting the budget month to month based on projected spending, so we know what we can afford and what needs to wait. Building a winter wardrobe this month? Ok, the video games and movie theatre needs to wait, etc.
It’s a composite approach that works pretty well for us to hold us accountable to our priorities and spending power, while not being constricted into an envelope or zero sum method.
Budgeting is like a wish, it may or may not come true. It is more important to me to manage cash flow, bill statements and scheduling bill payments. Tracking daily spending is how I budget. Would love to see the addition of bill payments, imagine…One place for all of your accounting and bill payments.
I guess you’d call ours zero-sum virtual envelope budgeting. Maybe? Our budget pre-allocates every dollar of income to categories, balancing all planned income with all planned expenses, which is the zero-sum part. Many of our categories are spent month-to-month from our checking (mortgage, groceries, gas, etc.) but a bunch of categories are longer term (auto repairs, home repairs, money set aside for charitable giving, etc.). We “virtual envelope budget” those by putting the money from those categories in a separate savings account and deposit/pull from it as needed. I have a custom tab on our Tiller sheet where I track the running balances in each “envelope” by pulling the numbers from the Budget History tab.
With all income accounted for (zero-sum) and longer term / irregular spending envelope budgeted, and all of our big stuff automated (mortgage, retirement savings, etc.), it’s mostly just a matter of categorizing spending (which we do about every 2 weeks) and moving some money between checking and savings at the end of each month to reconcile the “envelopes”.
We analyze our spending and whether we’re over/under spending certain categories every 6 months or so and adjust the budget as needed. From that perspective, the budget is more of a guide than a strict thing we adhere to week-to-week.
I am retired. Each year I create a budget for my wife and me. Then I use one of the on line tools to see how likely it is that our funds will last as long as we need them. During the year I use the budget as a general guide to how we are doing rather than a limit on what we can do.
I find Tiller an excellent way to do this.I like being able to modify it to suite my specific needs.
I make savings my number 1 priority and don’t let this money touch my everyday checking account…I max 401-Ks, HSAs, backdoor Roth, and make a monthly contribution to my kids 529…by having this money go directly into a specific account or secondary checking account I never really see it.
After that I don’t really care what the milk costs unless it starts to impact my ability to save.
My wife and I have never really budgeted but I too consider myself an obsessive tracker of spending. We have always lived well within our means which allowed us to plow money into various savings vehicles, etc. Those decisions we made early in life, along with its trade offs, are paying huge dividends now. I would rather start the race strong and coast at the end versus the other way around. Tiller allows me to know my money and this knowledge (whether good or bad) equates to less stress and a lower blood pressure. I would much rather know than not know. I would rather address issues now and head on rather than put my head in the sand. Now that I am retired, the goals have shifted. Like others, we know how to save. Now we need to learn how to spend…so to speak. We need to focus on our health. Giving back to society and helping others is important too, as is spending time with family and friends. Also, present gifting and leaving as much to the next generation are goals all while being sure we live in a manner as to not outlive our money.