Archives For Budgeting

Do you know what’s way more fun than actually budgeting? Reading about budgeting. A Google search for “Budgeting Software” will give you 3+ MILLION results.  It’s clear that people are looking for something to make budgeting easier (or something to help them put off doing the actual budgeting work), but is there really any easy way to budget?

I’ve tried a variety of software types, and I have yet to find one that meets our needs perfectly.  Since we’re also pinching pennies (in order to get out of debt), I’m completely against paying for software, so there are a lot of software types I haven’t tried.  Here’s a few I have looked at, and my thoughts on them:



We’ve used Quicken in the past. Though it’s the top result under “budgeting software,” in my mind this is really a checkbook register. Yes, you can print reports and see where you’re spending your money, but it doesn’t really help you actually create a budget. It’s still helpful, just not the ideal budgeting solution.

This one leans more towards budgeting than Quicken does, but it’s main function is still to help you see where your money is going.  It’s got a very streamlined interface, and you can connect all of your accounts to get a big picture of your family’s finances.  You can also set savings goals and see how well you are doing on reaching them.  One drawback here is privacy – you’re giving them all of your account information.  Though they tout “bank-level security,” it’s still going to make a lot of people nervous.  I’m not a dedicated user.

This one actually is budgeting software (well, technically, it’s a budgeting website). When you first visit the website, all you have to do is enter your expenses and income and it will create a temporary budget for you. In order to access the budget fully (including adding expenses and modifying your temporary budget), you have to subscribe. I couldn’t find any solid numbers for the subscription – their front page only says, “Under $5 per month.” As I said earlier, I’m too cheap to pay for it, so I can’t tell you how well this works.


Dave Ramsey’s Software

Though I don’t agree with Dave on everything, he does have some awesome spreadsheets and budgeting information available.  In fact, we’re currently using a modified version of his budgeting spreadsheet. It’s not perfect (which is why I’m always looking for something new), but it’s the best we’ve found so far. This is another one you have to pay for ($25), though. We’ve had it for years (since before our “spending freeze”), but I don’t think I would spend money on it if I didn’t have it already.


Rather than continue through all three million results, I’ll leave you with one more.  This is another one that helps you track spending, not decide how to budget your money, but this is one that our family currently uses:


If you’re familiar at all with Dave Ramsey, you’ve heard him talk about the envelope system.  He recommends you take out cash for your budget categories and divide the money into envelopes. If you have $100 in your “clothing” category, you know you have $100 you can spend that month. When the envelope is empty, you stop spending.

We’ve used this method with various degrees of success in our family.  We like the idea, but the practicality of withdrawing cash, carrying it around, dividing it between spouses just got too complicated for us and we stopped using it.  This website has solved that problem for us.

Once we’ve finalized our monthly budget, I put the numbers into the “envelopes” on the EEBA website. It will track how much money we have budgeted that month, and we enter each transaction when we spend money and categorize which account it came from, so we always know how much money is left in that “account.” My favorite thing: there’s an app. Since my husband and I both have iPhones, we use the app to input our transactions.  This way, if he spends money at the grocery store, I know about it. Both of us know exactly how much money is left in each category.


So far, creating our own budget and using this app to keep track of our spending is turning out to be the best way for us to stay on the same page.

Is there any software that you can’t live without? What tools do you use to budget and track your spending?

Ramit of IWillTeachYouToBeRich is always up to something. Check out his latest project:

Here’s the idea behind the website in Ramit’s own words:

This year, Americans are planning to spend over $400 on Christmas gifts. Instead of buying things we can’t afford, here’s a way to do something more meaningful.

I like this idea. Especially, when you consider that we still have 12 million people paying off last year’s Christmas!

The other night I went to Kroger to pick up some milk. I was standing in the checkout line behind an older lady. I noticed that she was holding a Lone Star Card, which is our equivalent to Food Stamps. I didn’t have a problem with this lady using a Lone Star Card. What I did have a problem with was what she was buying:

2 – Six packs of candy bars
1 – 20oz. Dr. Pepper
2 – Boxes of Extra Butter microwave popcorn
1 – Bag of Fritos corn chips (it might have been some other kind of chips, I can’t remember)

That’s it! That’s all she was buying and she was paying for it with her Lone Star Card (I mean, with taxpayer dollars). Absolutely nothing of any nutritional value.

So, here’s my question(s) of the day:

Should there be limits on what can be purchased with food stamps?

I have blogged about this topic in the past and one commenter mentioned that it would be cost-prohibitive for stores to place limits on what people can and can’t buy with food stamps. I’m not buying this argument. I think the program should be run similar to WIC, which places limits on what people can and cannot purchase.

I look at it this way:

If people can’t afford to buy groceries on their own, they should have to make some sacrifices just like everday people on a budget. If our budget was tighter, I would have to cut out any extras (Coke, chips, beer, etc.). People on Food Stamps should too!

I think some people are just way too comfortable accepting charity. I would feel guilty buying crap with taxpayer dollars.

You know how I feel. What’s your opinion?

CLARIFICATION: So that you all don’t think I’m some elitist SOB, there was a time when my wife and I were poor. We were both in college and made little money. But,… we never used food stamps or any other type of assistance (except for occasional meals and some groceries from my wife’s parents). We had a very strict budget and we stuck to it. We didn’t have cable TV, cell phones, or anything beyond the basics. We lived within our means. So, I’ve been there and done that.

Remember our kitchen renovation from last year? Well, I recently discovered an unplanned consequence of that renovation. I found it out after I signed up for an online account with our electric company and started looking at our billing history. Here’s a comparison of our energy usage in 2008 and 2007:

Bottom line: we’re using a lot more energy! Why? Because prior to our renovation, the kitchen was a separate room and most of the heat was contained in the kitchen. Now with that wall gone the heat is allowed into the famly room. Another important thing to point out is that we decided to recirculate the built-in microwave’s vent back into the room so the heat isn’t allowed to escape. We’ll most likely be changing this in the future.

I read an interesting and funny article by Karen Blumenthal in today’s Wall Street Journal titled Vanishing Act: The Law of Household Economics ($). She defines “The Law of Household Economics” as for every financial windfall, an equal, unexpected cost. She then goes on to lament the fact that everytime she and her husband experience a financial windfall, something comes up that requires them to spend that very windfall:

Our family first stumbled on this reality [the law of household economics] several years ago when we cleaned out closets and kids’ toys to join in a family garage sale. We loaded up the minivan with stuff the day before the sale and my husband stuck a dolly in the back just in case someone needed it. It shifted, and when he slammed the back door, the handle of the dolly crashed through the rear window.

Some colorful words were shared. But despite the setback, the garage sale went on. When the organizer tallied up the proceeds, she challenged us to guess our take.

“Three hundred and twelve dollars,” my husband replied.

She looked stunned. He was off by maybe a couple of bucks. “How did you know?” she asked.

“That’s what it cost to fix the minivan window,” he sighed.

Been there, done that! Actually, I would call that “luck” rather than bad luck. There’s nothing worse than an unexpected expense when you don’t have the money. So, although it may be frustrating, I would consider it a blessing when there’s extra money to pay for an unexpected expense. There’s lots of people out there that aren’t quite so lucky.

I received the following email last week:

I was hoping you could throw this one out to the group of readers:

I’m a relatively frugal recent college grad, working hard to save as much as I can. I left my job at Bear Stearns in April and started a new position at a small but stable financial services firm last Wednesday. The analysts on my team frequently go out to lunch, and have been inviting me each time. I went with the group on my first day, and we all paid for our own meals. I viewed that expense as part of team building rather than as the cost of a meal which I would have otherwise brown-bagged, but I am not interested in spending money on lunch more than once a week or so, and when I do spend that money I’m not terribly interested in eating with work colleagues (my wife works nearby and when she’s not around I enjoy relaxing alone with a book and my food). What to do?

Thank you!


My opinion:

I think you have to ask yourself what you have to gain by eating with your colleagues. If you’re the new kid on the block, it may be a good idea to forge some relationships with your new colleagues. If the only way to do that is by eating lunch with them, then perhaps you should consider doing so once or twice a week. I definitely don’t think it is necessary to eat out with them every day.

Another way to build friendship with colleagues would be to go out to lunch with one or two of them at a time. People are more likely to talk if they’re not in a large group.

The main thing is to be careful that you don’t become the office loner.

Now it’s time for AFM readers to weigh in. What’s your advice for Jay? How do you balance frugality with camaraderie?

NOTE: I messed up. I had originally titled this: “How I Could Find $19,000 Per Year If I Had To.” Well, I made a cut and paste error in excel, which led to my numbers being off by $6,000. The error was caught by a reader and I decided to fix it. Sorry for the mistake. I try to do a better job of proof-reading my posts but sometimes I mess up.

Below is a small list of things that I could cut out of our budget if it became necessary. No, it wouldn’t be fun, but it could be done if I had to. I urge you to create your own list. I think you’ll be surprised just how much you could save if you had to. My list could potentially save nearly $13,000 per year!

Beer – I like beer. I enjoy trying different beers. But, I could give it up if our budget required it. My guess is that I could save $50 per month if I quit buying beer.

Coke – I know, I know. Coke is nasty stuff and I shouldn’t be drinking it. But,… me likes it! I could cut it out of our budget and save $10 – $20 per month.

All other non-essential groceries – These items include things like cereal bars, ice cream, fancy cheeses, and any other items that aren’t essential groceries. I have already cut out ice cream unless it is on sale. I’m just not gonna pay $6+ for a half gallon of ice cream. My best guess is that I could save $400 per month on groceries if I cut out non-essentials.

CDs – I like music and collecting CDs is a hobby of mine. But,… if it came down to it, I could cut out my CD-buying ways and save several hundred dollars a year.

Eating out – Our family spent over $5,700 eating out last year. Obviously we could save lots of money if we buckled down and refused to go out to eat.

Cut out cable and high speed internet – Things would have to be really bad for me to go this far. Why? Because we have a new HDTV and watching regular TV on an HDTV sucks. I’m also on the internet a lot so getting rid of high speed internet would not be good. That said, if I were to get rid of both cable TV and internet, I could save $107 per month.

Ditch my cell phone or landline – My landline costs around $42 per month and my cell phone is around $30 per month. If I ditched the landline, I would most likely have to upgrade my cell plan as it is currrently 250 minutes per month with 1,000 nights and weekends. If I split the difference, I could most likely save another $20 per month.

Those were just a few things I could think of at the time of this writing. What about you? Do you have a suggestion that I could add to the list?