I’m sure we all have learned a lot over the years with budgeting our money. I’d like to get a discussion going to share what are some of your budgeting tips or advice you have to share that has made the biggest impact to your budgeting success?
This is the first year I have created a personal budget for managing my expenses. The best tip I have been learning has been to get a good understanding of where I am spending money. I needed to see the expenses in general categories first. Next year, I plan to utilize more categories to improve my budget estimates. By keeping things simple at first prevented me from getting bogged down in the details and has saved me a lot of time.
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I’ll play. Two from me:
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For the first time this year (and only because Tiller makes it relatively easy to do), I’m budgeting off of gross, rather than net, income. It’s made me much more aware of where my money is going. Not that difficult to implement and worth doing, at least for a little while.
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Along similar lines, stop using AutoCat! I know. That’s one of the features that you’re paying Tiller to provide, but I have found that manually categorizing transactions has made me much more attentive to what I’m actually spending my money on. It doesn’t take that long, and I almost find it therapeutic.
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@dmetiller I like both tips. In fact, I remember you posting about #2 on a different thread. I started to do that too after reading your suggestion. It has also helped me think through how I want to break out my detailed categorizations next year. For #1, I need to do that because I have insurance and social security tax taken out. Thanks for sharing!
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For #1, I’d put a huge plug in for @jpfieber Paycheck Deduction Transaction Generator. It’s a great utility that makes it very easy to track paycheck deductions, which really then makes it trivial to budget off of gross income.
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I totally agree about AutoCat! I used it at first because I just wanted to have everything recorded (I kept telling myself I’d go back and look over everything, but you know how that goes… 
I’ve also started using tags. Now, instead of just “pets”, I know what I’m spending on cats vs. horses. vs. wild bird seed and squirrel feed.
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We’ve used the 50/30/20 rule for many years. Actually changed it to 50/20/30 for our lifestyle. So 50% of income goes to Must Haves, 20% to Wants and 30% to Savings. We’ve always had the mindset to pay ourselves first (savings) then the Must Haves and the remainder goes to the Wants. Keeping our Must Haves at or under 50% allowed us to know exactly what we needed for an emergency fund and built that up to handle 12+ months of unemployment. The peace of mind is really nice to have.
Our main process is to review what we spent the previous year and use that as the starting point for next year. Truth be told, I like data, so I get detailed, but my wife (who lucky us is pretty frugal) gets the “deer in the headlights” look after a short time reviewing/planning for next year. One area we did not think too much about was adding medical insurance deductibles to the yearly budget. Having needed a surprise surgery this year, we didn’t budget for our $6500 deductible. So now I’ll be adding that into next and following years budget. Great if we don’t need it, but that way it’s accounted for in planning. We did not add it to this years planned budget (even though I know it’s due in a couple months), so it will show up as an over budget item at our yearly review for next year. Hope that makes sense. I think the main thing is to understand that life happens and to plan as best you can and not beat yourself up when things go differently.
We just came over to Tiller from Mint at the beginning of the year. I would prefer a 3rd level of Categories as I find the process of adding a Tag to transaction line items a pain, but that’s just me. We currently have 17 Groups and 160 Categories and this is working well for us. I do like the Monthly and Yearly Budget templates in Tiller. We can easily see where we are over or under in our categories and adjust accordingly for the future. Planning becomes easier once you have a few years of data under your belt.
So in general, we use the 50/20/30 rule as a guide, review spending monthly and adjust if needed and plan for next year. We also then use the yearly budget to plan for the next five years, again knowing anything can change at any time.
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@klaykrusher Thank you for sharing your 50/30/20 rule. It is a great guide to start from and then tweak as you did to 50/20/30. I’m at about 80/20/0 right now, but working to understand where changes can and need to be made.