Budgeting

Getting Started

    When setting up a budget for our family, I initially downloaded a budget template on Excel and painstakingly went through our credit card statements and checkbooks, categorized each transaction, then totalled them all up. What a pain! It took forever. Then my husband told me about mint.com.

     If you haven't yet - check out Mint. It's a great, free, site to manage your finances. If, like me, basically all of your purchases are on credit cards, it's pretty amazing. (And really purchasing everything on credit card then just paying it all off at the end of the month is the way to go since you get points, which is basically free money.) Anyway, mint.com syncs up with your online accounts for your banks and credit cards, so all of that junk I was doing in Excel? Mint does that for you automatically. Every single purchase you make on your credit card gets categorized automatically and it will total up expenses in each category. If you set a budget it will show you how much you've already spent each month in each category you set, so you have a good visual on how you're doing throughout the month. It took a little bit of tweaking to get it set the way I wanted, but once you do that it's pretty low maintenance.

How much to budget?

    To figure out how much to budget I first went through all of our set costs - the things that are the same every month: the mortgage, student loan payments, internet/tv bills, etc. Then after subtracting that amount from our monthly income that's what we had left for things that change month to month like food expenses, utilities, gas for the car, general shopping, and other miscellaneous spending. Some things I had a basic idea, like for gas - we usually fill up once a week, so I budgeted about 120 dollars a month. Some things I just took a random guess - baby supplies? 100 dollars a month - and we'll see how that turns out.

     In an attempt to be somewhat scientific I found average monthly food costs as per the USDA. For a family of 2, a moderate budget is around $600/month, "low-cost" around $480/month, and "thrifty" around $375/month. I guess we're somewhere in between. I set a budget of $250/month for groceries but also $250/month for restaurants/coffee shops etc. So $500/month for food. Though I do count non-food items in grocery like buying toothpaste or trash bags. Too hard to separate it all out.

Keeping it up

     I hope to use this blog to help keep track of my progress and document some good finds and money saving ideas. I plan to make one more post as an overview of how I'm doing up to now, then get going in real-time.