Comments on: How to Make a Budget That Works

By: Ryan

Ryan — Mon, 08 Aug 2011 20:49:07 +0000

Nice post — Listing the most important categories first is actually a really good idea. I hadn’t considered that.

By: Amy Saves

Amy Saves — Wed, 20 Apr 2011 00:08:55 +0000

thanks Bill! I know most of my money goes towards dining out and random expenses. All these little things add up.

By: Bill

Bill — Tue, 19 Apr 2011 21:46:36 +0000

Amy, I felt the same way until I wrote my first budget. Once I gathered my courage and had all my income and all my expenses on one sheet of paper I found out that I had an excess of about $400 income every month that was simply vanishing. It was disappearing at fastfood restaurants, malls, movie theaters, and bars. Two months later I had caught up on all my past due bills by following a budget and applying the $800 I identified toward my debt.

Start today and I bet you’ll thank yourself in a month or two too!

By: Amy Saves

Amy Saves — Tue, 19 Apr 2011 21:22:46 +0000

i should totally make a list of income and expenses. i think i’m just scared to see it on paper. haha.

By: Heather

Heather — Tue, 21 Apr 2009 20:44:46 +0000

Great article. Here’s a few thoughts to add:
-Think about your purchases and how they relate to the budget you have set up.
-Establish broad categories and assign an estimate of your expected expenses; this goes along with the adjustments each month.
-The more micro-managed your budget becomes, the harder it is to execute.
-Use broad categories like food, transportation, clothing, housing, and discretionary.
I’ve been using Mint.com for a little over a year now and have found it quite helpful in managing my budget. Quicken has also recently dropped their online fee, so it is also a good alternative to regular spreadsheets and/or pen and paper.

By: Dorian Wales

Dorian Wales — Sat, 18 Apr 2009 12:31:41 +0000

It is important to remember that a budget is not just a tool for tracking expense. A budget is basically a planning tool in which one sets goals one hopes to meet. Measuring performance vs. goals is where the budget really kicks in as a great tool for feedback on our behavior.

By: Chiko777

Chiko777 — Thu, 16 Apr 2009 12:33:54 +0000

I currently use Mint.com and I love the way it bring all my accounts together for a simplified personal fiance examination.

By: Imee

Imee — Thu, 16 Apr 2009 10:08:57 +0000

I feel lucky that my mom’s always been frugal and that I learned to budget because of her. I’m always scared to end up like a relative of ours who’s buried in debt, so I’ve always tried to be careful with my money but can still be generous when needed.

By: Pinyo

Pinyo — Thu, 16 Apr 2009 01:02:00 +0000

@Baker – Thank you. That’s a good way to do it, but the most challenging part for most people is becoming one month ahead. I’ve been looking at YNAB and this seems to be one of the key step that the software helps you with.

@Ken – Yes, irregular expenses (some call it variable expenses) are the ones you have to be careful with.

@Craig – Right. You can still spend money on whatever. As long as you’re honest about it and budget for it, it’s not a problem.

@Michelle – That’s a strong endorsement of YNAB. Thank you for sharing.

@Bill – Thank you for that big compliment! Great point about including treats for yourself in the budget — incentives are good.

By: Bill

Bill — Wed, 15 Apr 2009 21:13:20 +0000

One of the best budget creation posts I’ve read!

I especially like the advice in #5 on balancing the budget of having a trusted outsider evaluate your budget if you can’t get it to balance yourself.

#7 is the tricky one though. Don’t forget to pay yourself or you’ll have no incentive to stick to it. By that I mean, if your budget is so tight that you can’t afford one meal a month out with your family, or enough to pay your softball league fee, whatever, then your chance for success is severely diminished.

Call me crazy, but I budget for essentials first (food, transportation, mortgage/rent, insurance) and then I pay myself ($50 every two weeks) and the rest goes toward wiping out debt! Trust me, I’m on a very tight budget but I always pay myself (and my wife!) before the creditors.

Again, great post. Very well done.