Simplest way to budget?

Hey all, I have used spreadsheets, and apps like YNAB, but I find they make budgeting complicated very quickly, does anyone else have this problem? How have you made budgeting simple?

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I started by tracking and categorizing all my expenses in Quicken. I then dumped the data to Excel, printed it out, and took highlighters to every line item.

  • Red: “Why am I spending on this? I can get rid of it.”
  • Green: “This is core and important, and I’m not going to cut it unless we’re talking life or death type situations.”
  • Yellow: “I don’t want to completely stop spending on this, but I didn’t realize how much I was spending on this until I started tracking it.”

On top of those tracked actual expenses, I added an estimate for “expected but not monthly” costs like Christmas, car repairs, and vacations.

Knowing what my out-go was and knowing what my income was, turning that into a budget became a matter of making priority calls among the reds and yellows and maybe turning a few greens into yellows and prioritizing accordingly…

I found that starting with where my money was actually going was easier than starting with a “from scratch” dream state. The downside I tend to see with that opposite approach is that it’s too easy to forget about the “absent minded” purchases like auto-renewed subscriptions until they have already busted your budget.

Regards,
-Chuck

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The easy way is go through your check and/or credit card statements, collect the data for ideally a year (or at least a few months) and see how you spend your money. Don’t forget annual bills for taxes, insurance, etc.

Put is all in a spreadsheet in categories that matter to you. Then maybe add some goals retirement saving, downpayment for a house, new car, educate kids, travel, etc.

See what changes might be possible to meet those goals. And especially if you are young just starting out, make sure something goes into savings every month. Tough when you have lots of needs and wants. But at minimum when you get a raise or promotion make sure some of the money goes into savings.

In the good old days many carried cash. Maybe not any more. But if you do try to keep receipts and see where your cash goes. Notes at the end of the day can do if.

If you are into getting lattes every day or buying lottery tickets, see how much you are spending annually. Couldn’t some of that go to savings?

My purpose is different, but each tax season I download all the transactions of the past year from all my credit cards and my checking account. Each gets loaded into its own tab in an Excel spreadsheet, then combined into one more tab. A vast amount of information, easily sorted and explored. I’ve learned a lot from that.

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Hi @CorneliusV,

Welcome to the Fool!

My question is what are you trying to actually do?

  1. Track current expenditures to make a budget?
  2. Create a budget to follow?
  3. Track ongoing expenses to monitor them?

For all 3, I suggest Quicken.

In the 1960’s, I used paper in a 3 ring binder. I used that basic system through the 1990’s. At that time I started using Quicken.

A part of Quicken is the Lifetime Planner. It uses all the data you have in Quicken plus some additional planning numbers and allows you to see the financial info for each future year through the end of the plan.

This planner is the reason we retired in 2005 rather than in 2016/2017 which was recommended by a professional retirement planner as the earliest we could possibly retire.

While you have the option of downloading things from your financial institutions, I always manually enter everything.

Manual entry is very fast. Quicken memorizes the payees. In the payee block, I can type “joa” and hit the key, enter the dollar amount and press . The complete transaction is filled-out for me, date, Joann Fabric Store, 73.21, Sewing (category).

I have identified fraudulent charges a couple times when I reconcile with the statements. If I used the download method, I probably would have missed them.

Does that help you?

Gene
All holdings and some statistics on my Fool profile page
https://discussion.fool.com/u/gdett2/activity (Click Expand)

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I’ll 2nd Gene’s recommendation. We’ve used Quicken since 1994. It gets better as more data is collected. And like Gene, we manually input everything.

The one thing we don’t do is list our account numbers in Quicken. They are listed by name only. I’m sure Quicken is secure, but I just don’t want to risk my files being hacked.

Also, I’ve never had much luck having my tax information from Quicken accurately transfer into Turbo Tax. I’m sure it would if I would take the time to look into it, but I find it just as easy to print the Tax Schedule or the Tax Summary reports and then key those totals into Turbo Tax manually.

I also endorse Quicken with one BIG exception. They (Intuit) have yet to fix the dreaded Elan Financial Services issue. I still can’t import my Fidelity CC into Quicken. At one time I could but Elan keeps changing their web site requirements for logging on and it apparently confuses the heck out of Quicken. Of course Quicken techs won’t talk to Elan techs to figure out an answer to the problem so here we sit.

Hi @CorneliusV,

I should mention I am using Quicken Premiere 2017. Newer versions may be a bit different.

My win-doze PC has been air-gapped since 2018 so it gets no updates or other inputs. I keep the PC solely to run Quicken and ThumbsPlus.

Does that help you?

Gene
All holdings and some statistics on my Fool profile page
https://discussion.fool.com/u/gdett2/activity (Click Expand)

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