Who knows how to create a monthly financial budget?

rdevol

So...my husband and I finally got our act together and went to a financial planner to get us on the right track for saving towards retirement. The next step for us is to create a monthly budget. I've tried before, but I find it so hard to predict certain expenses. Predicting fixed expenses is easy, but how do you know if you're gonna need to go to the doctor, or if your car is gonna break down, or your daughter has an unexpected school fee, etc. I'm really struggling with this. Any advice is welcome!

cee134

There are some good websites. Mint is free and helps you with that. There are others too.

Just_J_Now

rdevol wrote: »

So...my husband and I finally got our act together and went to a financial planner to get us on the right track for saving towards retirement. The next step for us is to create a monthly budget. I've tried before, but I find it so hard to predict certain expenses. Predicting fixed expenses is easy, but how do you know if you're gonna need to go to the doctor, or if your car is gonna break down, or your daughter has an unexpected school fee, etc. I'm really struggling with this. Any advice is welcome!

You don't know, which is why you put money aside for emergencies. Don't spend it unless you absolutely have to. Also known as savings.

Motorsheen

Like you said, start with your fixed expenses like mortgage or rent.

There are other expenses that appear to be fixed, but aren't --- like insurance or the grocery bill.

I would say that you need an emergency fund for items like car repair and also set a definitive budget for items like dining out.

Also, track all expenses for 3 months. This means everything.... Starbucks, back to school gear, entertainment - everything. This will give you a handle on where your money is really going.

RoxieDawn

You have decide what cash is left after bills (groceries, gas, rent/mortgage, insurance, etc.) and decide where you are going to put that money. If you leave it in your main account its always accessible and easy to get to.

I used to have a 'mad account' (second checking or savings) where I put in a little bit each paycheck in there. It does not have to be a lot, just a few dollars a week. No emergencies come up, that builds over time.

Unknown

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Caporegiem

MeeseeksAndDestroy wrote: »

If you give me your credit card numbers I'll create a budget for you for free

Cant spend money if those credit cards are maxed out...smart!

caco_ethes

The longer you track expenses, the easier it is to project future expenses. So get cracking with tracking.

zdyb23456

Dave Ramsey suggests setting aside $1000 for emergencies. Birthdays and Christmas are not an emergencies. It comes around every year yet people are not prepared financially for the cost. So set aside money every month for birthdays and Christmas.

Yearly expenses should be divided by 12 to calculate how much to save every month. Stuff like insurance, registration, regular yearly maintenance on vehicles, etc.

Stuff that varies month to month is harder to budget for, but if you start tracking you should get a feel for what is an appropriate amount. People will underestimate then feel like a failure for blowing through their budgeted amount.

Ironandwine69

Have a savings account linked to your checking account. Leave a certain amount there, like $1000. That's to be touched only in case of sudden bills.
Start building up a second emergency fund where you have around 6 months of monthly expenses. This one only gets touched for major things, or if you lose your job etc. I would keep this separate from your checking account where is not very easy to touch/spent. This bigger emergency fund only makes sense if you don't have high interest debt, like credit cards etc.

So small emergency fund first. Then bigger emergency fund.

VeronicaA76

1. Write down ever absolute bill (mortgage, car, insurance, utilities)
2. Save receipts and add up groceries (including person hygene products)
3. Add in regular expenses (gas for the car, lunch money for kids)

This is your minimal monthly budget.

Now, you need to keep track of #2 (this is usually the most varied month to month). Keep a running total so that you know if you need to make any adjustments.

If you find that it is over your allocated budget, it's time to find out where to cut from (going generic on groceries and personal hygiene is a good one)

Lounmoun

For my family-
I list all the expenses: bills, gas for the car, car maintenance, food... if it is around Christmas I budget an amount for gifts.
I don't try to figure out how we will spend every cent of what is leftover in advance. We do try to maintain a certain amount in savings and don't spend wildly. A lot of things are not emergencies just inconveniences so they might wait until next month or until we save up. When the clothes dryer broke we used a clothesline for example.

What kind of emergencies have you had in the last year or so? What is going on in your life? That would give you an idea of how much you might need for future.

tcunbeliever

I have a weekly "miscelaneous" bucket that random non-standard items are applied to - like dr copay or kid is sick and needs a bunch of OTC medicine, or school fees, or birthday party, or dog food because we only buy that every couple months...etc. Every week I put money in that envelope, but sometimes it's several weeks before an expense of that type comes up, so I just keep putting it in...some weeks there are 5 expenses from it all at once...it's a catch-all category...most financial planners don't like generic categories, but for me it works quite well.

rdevol

Thanks everyone for your ideas. We do have a $1000 emergency fund. I've done tracking before, and I guess I know I have to do it again - it's grueling, though. We haven't really built up a long-term savings account, though, as we're trying to put as much into retirement as possible right now.

@tcunbeliever: I like the idea of a miscellaneous fund. I know these kinds of expenses come up each month, but I never know exactly what they'll be. Would you feel comfortable telling me approximately how much you put in it? I know it will be different for everyone, but it might be helpful to start with a ballpark figure. We're a family of three (mother/father/daughter).

@MeseeksAndDestroys: I just sent you all of my credit card numbers, and my SS#, too, in case you need it. Thanks for taking such a personal interest in my request!

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SoulRadiation

You might be able to find your medical records from your insurance provider...many have a website you can log in, and you can then see the explanation of benefits for your year which you could use to estimate stuff like doctor's visits, prescription medication, etc...

Health Savings Accounts are a huge pain but if it's available to you I suggest you go through the effort to take advantage of it because it's money you are leaving on the table not to...you're going to have predictable medical expenses.

_pi3_

My bf has my food budget fixed for the entire house including cat expenses and household cleaning stuff so yeh

vikinglander

feedthepig.org

SomebodyWakeUpHIcks

Keto has kept me on budget!

rdevol

@Cutaway_Collar: about 15-20 years, but we haven't done that great a job about saving for retirement so far.

rsclause

For medical I have a HSA and since I am healthy I use it as a emergency medical savings account so it just sits there for the unexpected hit on my $3000.00 deductible. I can budget a set amount each month to add to it. For the rest of the unexpected you need that emergency fund of your combined earnings over 6 to 12 months. After that is set you just need to budget a set amount to set aside for things you "want" like vacations & toys. Its also not a bad idea to pay off a car and keep making payments into savings above the emergency fund. You can save a lot of money making the loan term shorter or avoiding the loan altogether. It is amazing how much longer you can resist the new car bug if you have to actually write the check.

tcunbeliever

@rdevol - I put in $50 a week, we are a family of 4 currently (2 adults, 2 kids) but the amount was the same when we were 5 before my oldest moved out...also, we have pets, 1 dog, 1 cat, 1 goat, and about a dozen ducks.

SomebodyWakeUpHIcks

@BowlingForHollars wrote: »

Every time someone pisses me off in here or is full of *kitten*, I put a quarter into a 5 gal water bottle. I retire on Monday.

Let Chase Private handle it

Just_J_Now

Cutaway_Collar wrote: »

rdevol wrote: »

@Cutaway_Collar: about 15-20 years, but we haven't done that great a job about saving for retirement so far.

That is good enough time to plan. Personally I don't like retirement. I see men in their 70s and even late 70s suiting up and coming in and out of work. They are slow but determined. They make good salaries and show no signs of retiring. One of them told me - "I won't know what to do with myself". Their career is a passion. So I recommend working for as long as possible.

Oh heck NO! If I could retire today I would. I'd certainly know what to do with myself. If you're healthy and wealthy the possibilities are endless. I'm not one that wants to be working until I'm close to dying.

But whatever floats your boat I guess.

p.s. Besides, what good is having all that retirement money anyway if you're planning to work till you're almost dead.

SomebodyWakeUpHIcks

@Cutaway_Collar wrote: »

rdevol wrote: »

@Cutaway_Collar: about 15-20 years, but we haven't done that great a job about saving for retirement so far.

That is good enough time to plan. Personally I don't like retirement. I see men in their 70s and even late 70s suiting up and coming in and out of work. They are slow but determined. They make good salaries and show no signs of retiring. One of them told me - "I won't know what to do with myself". Their career is a passion. So I recommend working for as long as possible.

Currently, you need to divide your expenses by discretionary versus non-discretionary categories. In the disc category, sub-categorize it such as clothes, take-out, vacation etc., and with 6 months of data, you can see a trend - and start slashing one of the categories and send it to savings. Vacation is one area where Americans spend a lot of unnecessary money. A single outing costs about 3 to 5k and is money worth saving.

I recommend chase private client but they have a 250K min deposit you need to maintain. If that is not feasible, wells fargo has a robust retirement department with advisers. They are not as expensive as others, though they are embroiled in scandal at the moment.

When you get an adviser, you need to be engaged in how they diversify your retirement portfolio - how much in treasures, fixed income securities, low and high risk stocks. They will not disclose unless you ask. They have an online account these days where you can monitor on how your investments are doing (it is your adviser's job to explain it to you and you need to challenge him on his choices). You have to constantly keep tab of your investments or else one day it will vanish - it did for many people in 08 when the subprime mortgages tanked.

So what's your net worth?

rdevol

J_Surita3 wrote: »

Cutaway_Collar wrote: »

rdevol wrote: »

@Cutaway_Collar: about 15-20 years, but we haven't done that great a job about saving for retirement so far.

That is good enough time to plan. Personally I don't like retirement. I see men in their 70s and even late 70s suiting up and coming in and out of work. They are slow but determined. They make good salaries and show no signs of retiring. One of them told me - "I won't know what to do with myself". Their career is a passion. So I recommend working for as long as possible.

Oh heck NO! If I could retire today I would. I'd certainly know what to do with myself. If you're healthy and wealthy the possibilities are endless. I'm not one that wants to be working until I'm close to dying.

But whatever floats your boat I guess.

p.s. Besides, what good is having all that retirement money anyway if you're planning to work till you're almost dead.

@ J_Surita3: I'm totally with you, girl! I want to retire as soon as I possibly can and enjoy life. I want to do volunteer work, putter around in my garden, do crafts, travel, lunch with friends, hopefully have grandchildren by then to enjoy... If work is your life, then I see why you'd want to work as long as possible, but that's definitely not me.

Thanks for everyone's advice. I feel like we are putting a good plan in place. We just need to tighten our belts with our monthly spending, mostly.

Just_J_Now

rdevol wrote: »

J_Surita3 wrote: »

Cutaway_Collar wrote: »

rdevol wrote: »

@Cutaway_Collar: about 15-20 years, but we haven't done that great a job about saving for retirement so far.

That is good enough time to plan. Personally I don't like retirement. I see men in their 70s and even late 70s suiting up and coming in and out of work. They are slow but determined. They make good salaries and show no signs of retiring. One of them told me - "I won't know what to do with myself". Their career is a passion. So I recommend working for as long as possible.

Oh heck NO! If I could retire today I would. I'd certainly know what to do with myself. If you're healthy and wealthy the possibilities are endless. I'm not one that wants to be working until I'm close to dying.

But whatever floats your boat I guess.

p.s. Besides, what good is having all that retirement money anyway if you're planning to work till you're almost dead.

@ J_Surita3: I'm totally with you, girl! I want to retire as soon as I possibly can and enjoy life. I want to do volunteer work, putter around in my garden, do crafts, travel, lunch with friends, hopefully have grandchildren by then to enjoy... If work is your life, then I see why you'd want to work as long as possible, but that's definitely not me.

Thanks for everyone's advice. I feel like we are putting a good plan in place. We just need to tighten our belts with our monthly spending, mostly.

If work is your life (no matter how much you enjoy your job) I think it's pretty sad. That's just my opinion though. As I said, whatever floats your boat.

Good luck to you!