Amazon is the easy one to go in and look at the purchase history. The difficult ones are “Wal-Mart, Target, Costco, Kohl’s”. Was that groceries or clothing or housewares or…
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When my wife was abroad for two weeks, I was worried that the Amazon driver might call-in a welfare check.
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For me that would be easy. None of my Amazon purchases are needs, all “wants”…. it would be an “Amazon Misc” category.
But at our house we don’t look at expenses that closely. We have a jumbo Visa bill, and I know amount/breakdown of monthly autopays. The rest is groceries, gas, car maintenance (subtotals shown annually on Visa summary). Plus a lot of discretionary expenses - annual summary does not always do a great job of splitting out vacation vs restaurant etc… but it is good enough for our purposes.
No matter how you do the exercise, the big things you need to determine are 1) bare minimum monthly expenses** 2) your preferred level of after-tax income, to also cover non-discretionary spending
**As mentioned before, if no car payments that would need to be factored in somehow too.
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@Juno16 and @Mombbg23 am I correct that there is a steep front-loaded learning curve on YNAB? I have done two webinars today and am about to get on a third in a half-hour. Phew. It’s a lot. But I really like the idea that every dollar has its job, and the webinar instructor was able to answer the myriad questions thrown at him, including mine.
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Everything separate is more difficult to track. Since we have everything together (including credit cards) it is no brainer…
-Gas card for gas
- Food card (we have a dedicated one too) - all food
- Double cash - all other spending and bills (except college tuition or taxes)
- Amazon card - all Amazon (this is more like is it worth to go to Target or Walmart, or not really)
- Chase - all drug store/medicine
- Costco - for Costco (that one we are trying to minimize these days with one run per month, and it is indeed comingled and is a black hole
but mostly food or home essentials.)
Since we do not shop much at Target (which somehow does not appeal to me) or Walmart (very far), I do not need to separate types much.
So when one card comes higher than usual, I take a closer look…
Each card has annual categories. We do not use cash and do not withdraw money from ATMs…
It took some time to train family members to use the correct card for a correct category, but they learned
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There is a learning curve. It’s been a couple of years now so I don’t totally remember but I remember having to start over once or twice. I’m sure I don’t use all the functionality either …
This is something dh has talked about, limiting the kinds of spending on each card.
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I may sound a bit anal to some people on CC, but when it comes to budget/money I am not. I fund everything I need to and then everything else is discretionary. I am generally surprised that I have extra at the end of month, and then it’s a woohoo maybe I could buy something to treat myself.
I will sweat over if I have AC on all the time (extra $100 and I would LOL) or if I am taking too many Ubers vs taking public transportation, and i would splurge on a very nice handbag. My kids make fun of me all the time.
I usually spend about the same every month, except for special events, like my kids’ weddings or vacations. I have been funding them with my current earnings. I may need to do more planning when I retire.
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Having the cash was money each of us could spend as desired and the rest was for expenses for our household helped each of us feel we had some “breathing room.” It was for no Qs asked expenses, or could be saved up for bigger splurge.
Some people even have separate envelopes they put cash into so they can visualize their spending. Ours honestly was pretty simple when we just moved into our house. We knew we had barely enough to pay mortgage and utilities, tax and insurance, so we just tried to be and remain as frugal as possible. It worked ok.
In retirement planning, we again started with those same firm categories and knew we’d keep paying them. We did take contributions for H’s retirement out of budget after he aged out of eligibility.
Since H and I mostly agree on spending/saving, it’s worked pretty well.
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We don’t keep a tight budget anymore, but for many years things were lean and we had to. We kept a spreadsheet and accounted for every dollar to gauge what we were actually spending. See what your banking software will easily interface with. We used quicken. Once you designate a retailer as grocery or entertainment, the software automatically designates your purchases in that category. Once you know where you’re spending your money, you can better assess how to trim the fat.
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You can start using it pretty quickly, but it does take time to really get the most out of it and figure out how to reconcile. Lol. I recommend reconciling daily. It takes seconds. When you have a weeks worth and the numbers are off, it’s way more time consuming. There was a ynab Facebook user group that I found very helpful. Moreso than the videos. You could post your specific question and people would help out. Stick with it, it’s worth it! But i was probably still making mistake s even at the 2 month mark. I kept trudging along.
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The Facebook group is ynab (you need a budget) fans!
One thing that caused me trouble was I had multiple bank savings account to sort out my money (ex vacation acct, new car acct, roof acct etc). But with ynab, the categories tell you what you have for each expense or long term saving category and the multiple savings accounts weren’t needed. They just caused confusion for me.
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One idea I’ve often had is that it might be good to have one credit card (or debit card) for necessities and another for “wants”. But for simplicity we’ve kept just one Chase Visa to rack up United frequent flier miles.
My financial relationship with my spouse evolved to where I keep the financial records and handle most of the spending, mostly out of one account. My spouse is artistically inclined and instinctively frugal, and tends to want to craft or make stuff rather than buy new clothes or eat out alot. I am a DIYer, and try to do minor repairs by myself.
I don’t make a budget, but keep track of all financial transactions using at first Quicken, then Banktivity. Most of my bills (utility, mortgage and credit cards) are on autopay, and so they get entered as soon as the bill comes, so through the month I can see the expenses accumulating. Automatic savings to Roth IRAs or investment accounts are also entered. Income is entered as it is received. I can get a picture of the month and hopefully see that the expenses are lower than income. If so, then some of the “excess” income can to go to more savings, pay down a HELOC, or just held for more discretionary spending. If there has been an unusually high expense, then a transfer from savings may be needed. We have been at this long enough that there are few surprises.
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I think to be fiscally responsible you need to restrain from both the little expenses (grabbing that breakfast, coffee, or lunch everyday) and the big expenses (new car instead of keeping your old car). However, I find that the unexpected big expenses are impossible to avoid, the sudden home or car repair.
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Yes, I’d forgotten - I had to get my head wrapped around keeping large sums (for me) in my checking account. It was hard to keep track of separate savings accounts - to YNAB it’s all just money. You could do it but I found it too hard. If I think I’ll spend it within the year it just stays in my checking account now. I don’t keep track of retirement savings there as they are not relevant for spending/budgeting right now and any contributions are direct from paycheck so no need to account for them in a budget (if that makes sense). If I use the 529 - which I do when I can’t otherwise cash flow a payment to the college - I transfer it in as needed - I also account for money I contribute (so I get the tax credit - it goes in and out) but not the money that is in there or stays there for now.
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That’s what an emergency fund is for–so you don’t wreck your budget or go into debt.
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I’ll be honest, H and I never have had an “on paper” budget. Neither of us are over spenders and what mattered was attending first to the major items: mortgage, kids tuition (they attended Catholic school PreSchool - 8), household expenses like food, gas, reasonable kids activities,etc and for a long time fees associated with a second small property which was our only vacation source. We’ve never had big “entertainment” fees beyond maybe a moderate meal out 2-3 times a month. We’ve both got state pensions.
I sort of wish we had budgeted some - just to really see exactly where our $$ was going. But I guess our spending habits were also pretty good so we’ve managed without an official system. I imagine there are others like us.
I have encouraged our kids to start out with a budget though. I think it’s a good learning tool especially when you first start earning a regular paycheck and are paying your own bills.
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We do not budget and are not overspenders. We are careful with spending frivolously and have always placed a priority to investments and any expense related to our kids’ education and activities.
We emphasize on Jan 1 to put the max% in each paycheck in the 401K until it hits the max allowable. We also ensure we put away money in other investment opportunities (for example, my bonus will go towards investments- and in my industry, the bonus can be a sizable part of total comp). So we are working backwards with savings coming first and the rest towards discretionary purchases.
We eat out maybe 1-2x a week (usually 1x as we are health conscious). I spend $$$ on very good ingredients and cooking most everything from scratch, but that means I am not overpaying for crappy, unhealthy prepared food. I never do Starbucks and other types of daily discretionary food purchases. If I lived in a walkable city, I probably would be more tempted, but getting in a car to do something really is a deterrent!
We have no credit card balance and I enter each transaction of the mindset if I really need it. I hate shopping so perhaps that helps! We have 2 credit cards and but mainly use only 1.
I think my kids have seen how we are careful with money. I actually think my son has gotten a little too “cheap”. 
. My daughter is always amazed how she has friends who get those $$$$ and extremely caloric coffee drinks and get Uber eats everyday instead of just eating at her sorority where meals are part of the dues.
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