Your method for budgeting

[cranbarrier]

Hey grads!

I am looking to start budgeting regularly as I go into my PhD program - and am using it to predict my funding situation, as well.

What is your main method for keeping track of your budget? An app? A cool excel template? 

 

[TakeruK]

My main method is a spreadsheet. During my student days, I kept a super detailed sheet. I had like 15-20 categories (depending on the year). I budgeted an annual amount for each category to ensure they added up to be within my income. That was the budget part. I also used the spreadsheet to track expenses and compare with the budget. I had a sheet for each month with the categories (annual amounts divided by 12) and a separate section for one-time (or other non-monthly expenses, such as car insurance payment). I entered expenses into each monthly sheet every week and tracked my spending.

At first, when our budget was really tight, this was a good way to ensure I stayed within budget and helped me not stress about running out of money. Later, as our family income grew, we no longer used it to keep within budget but instead just to track how we were spending. Maybe once a month we would review it and be aware of any areas that we might be overspending and make small adjustments, but we didn't change each week's grocery spending (for example) to match the budget any more.

After graduation, life became much more complicated with lots of non-regular expenses (lots of startup costs to having a kid for example!) So now I still use a spreadsheet but I'm no longer tracking each individual receipt/expense. I basically only log things that go in or out of our bank accounts (so it's just a glorified bank statement that tracks all income/expenses across all of our bank accounts). No more categories either---we no longer find it helpful to track all these complicated categories, just an overall picture of how we're spending. However, we put everything on the credit card (so only the credit card payment appears on my budget sheet now) and the credit card online account breaks our spending into their categories for us, which is not always accurate but still a little helpful.

Although I don't use it, I have also heard great things about the Mint app. My main hesitation is that the best use of Mint involves linking your bank account with it (best as in, automatically updates your entries) but I don't really want to link that. You can avoid the linking by manually entering each transaction but that is too much work for me at this point.

[Bayesian1701]

Here is the template I used to outline my budget and I use the EveryDollar app to keep track of expenses.   I don't like using excel to keep track of what I am spending on a day to day basis but I love excel for figuring out how much I can afford to spend in a category.

[cranbarrier]

1 hour ago, Bayesian1701 said:

Here is the template I used to outline my budget and I use the EveryDollar app to keep track of expenses.   I don't like using excel to keep track of what I am spending on a day to day basis but I love excel for figuring out how much I can afford to spend in a category.

Unfortunately it seems that template is no longer available, but I have been checking out Mint and EveryDollar for expenses and they seem like good options!

[cranbarrier]

9 hours ago, TakeruK said:

My main method is a spreadsheet. During my student days, I kept a super detailed sheet. I had like 15-20 categories (depending on the year). I budgeted an annual amount for each category to ensure they added up to be within my income. That was the budget part. I also used the spreadsheet to track expenses and compare with the budget. I had a sheet for each month with the categories (annual amounts divided by 12) and a separate section for one-time (or other non-monthly expenses, such as car insurance payment). I entered expenses into each monthly sheet every week and tracked my spending.

At first, when our budget was really tight, this was a good way to ensure I stayed within budget and helped me not stress about running out of money. Later, as our family income grew, we no longer used it to keep within budget but instead just to track how we were spending. Maybe once a month we would review it and be aware of any areas that we might be overspending and make small adjustments, but we didn't change each week's grocery spending (for example) to match the budget any more.

After graduation, life became much more complicated with lots of non-regular expenses (lots of startup costs to having a kid for example!) So now I still use a spreadsheet but I'm no longer tracking each individual receipt/expense. I basically only log things that go in or out of our bank accounts (so it's just a glorified bank statement that tracks all income/expenses across all of our bank accounts). No more categories either---we no longer find it helpful to track all these complicated categories, just an overall picture of how we're spending. However, we put everything on the credit card (so only the credit card payment appears on my budget sheet now) and the credit card online account breaks our spending into their categories for us, which is not always accurate but still a little helpful.

Although I don't use it, I have also heard great things about the Mint app. My main hesitation is that the best use of Mint involves linking your bank account with it (best as in, automatically updates your entries) but I don't really want to link that. You can avoid the linking by manually entering each transaction but that is too much work for me at this point.

Yeah, on the mint thing I totally get that - I do not want to link my bank accounts. I would rather enter manually. I just dislike the idea of linking anything to an outside app. I am trying to determine is a detailed spreadsheet would be more or less work than manually using Mint or Everydollar.

[brainlass]

I use the app Goodbudget. It is not linked to bank accounts, which is good if you have concerns about security. Instead, you can set it to auto top-up your funds each month with a set amount (i.e., your monthly stipend allocation). You organize your funds and expenses by envelopes. For example, I have envelopes for groceries, household goods, transportation, etc. I also have one for the X amount I want to be saving each month. Your monthly sum of money gets divvied up into your envelopes, and you log expenses to subtract money from each category. I like that it also gives you feedback on whether you are using money at a rate above or below what would be expected if expenses were steady throughout the month. You can also link it across devices if there are multiple members of your household!

[jvvne]

Hi @cranbarrier! I'm finishing up a 3-year masters program where i lived on less than 15k a year, and before that I did an Americorps program where i made (if you can believe it) EVEN less than that. and I was vegetarian/vegan the whole time. budgeting is practically a part-time job for me. 

I found the Mint app incredibly helpful, but I personally didn't have many reservations to linking my banking because honestly I don't have that many finances to steal or mess with. I would notice pretty immediately if anything looked off. If you don't feel comfortable using that app, though, I still find their general formatting to be straightforward and a good balance of forgiving yourself for having to spend money sometimes vs. real-talk about not making stupid financial decisions. They pool your credit card debt, expected/regular monthly deductions (rent, utilities, car payments, student loans,etc), and any other debt to show your total "unavoidable" or necessary expenditures. this was incredibly good for me, since i tended, especially as a young(er) person, to mentally categorize credit card spending in some "other" money, not as what it really is: an actual deduction from your checking/saving account money. This also kept me from getting too down in the dumps about having to spend all this money just to exist since I still ALWAYS managed to have enough to live off of. All this just to say, I found it helpful to see all my debts lumped together into one sum so that i could see how much spending money was actually left.

From there, I would break it down into only three categories, which helped me to actually enjoy tracking spending and not find it some big numerical mess:

-things I cannot exist without: groceries, gas, & pet food.

-household items--things i can theoretically live without and/or don't buy very frequently

-things I should only buy if there is $ left over: clothes, makeup, dining out, extras

and then whatever else was left at the end of the month (usually less than $100, but hey!), i would put right into savings! i would use these savings to, as needed, buy big things--furniture, appliances--or when moving apartments/houses, put down security deposits, etc.

Edited March 29, 2018 by jvvne

[rising_star]

I used a less common bizarre budgeting method in grad school. I put everything I bought on one of two credit cards, both of which I earn cashback on. I used one for essentials (grocery, gas, rent, utilities) and the other for everything else. I paid them both off in full every month. 

[TakeruK]

5 minutes ago, rising_star said:

I used a less common bizarre budgeting method in grad school. I put everything I bought on one of two credit cards, both of which I earn cashback on. I used one for essentials (grocery, gas, rent, utilities) and the other for everything else. I paid them both off in full every month. 

This is how I paid for everything too (sometimes just one credit card if I want to earn more there but sometimes two since some cards have better bonuses on different categories). I guess  in my post above, I wasn't considering the method of payment to be part of budgeting, just how much is spent!

[rising_star]

6 minutes ago, TakeruK said:

This is how I paid for everything too (sometimes just one credit card if I want to earn more there but sometimes two since some cards have better bonuses on different categories). I guess  in my post above, I wasn't considering the method of payment to be part of budgeting, just how much is spent!

For me, it was part of the budget. I knew I couldn't let the total number go above a certain amount or I wouldn't be able to pay it off. But, that also meant not having to worry much about which categories I was spending money on. 

[Adelaide9216]

Although I still live with my family, and even if I pay out of my own pocket for the vast majority of my expenses, I don't know how to save money or to put money aside... I hope I'll learn that skill when I'll move out for PhD programs...it's definetly something I struggle with (and feel ashamed of as well). 

[shiningorb]

On 3/26/2018 at 11:46 PM, TakeruK said:

My main method is a spreadsheet. During my student days, I kept a super detailed sheet. I had like 15-20 categories (depending on the year). I budgeted an annual amount for each category to ensure they added up to be within my income. That was the budget part. I also used the spreadsheet to track expenses and compare with the budget. I had a sheet for each month with the categories (annual amounts divided by 12) and a separate section for one-time (or other non-monthly expenses, such as car insurance payment). I entered expenses into each monthly sheet every week and tracked my spending.

Would you mind sharing what categories you used? 

[TakeruK]

2 hours ago, shiningorb said:

Would you mind sharing what categories you used? 

Sure. Here's from my most recent year where I did the full categories method, with some added notes for context in brackets. There are some lines that should be in the opposite section, but some of the "Routine" items were created before we thought of making a separate section for irregular expenses and then for ease of keeping the same spreadsheet line number between years, we never moved them. And some of the "irregular" items were indeed irregular when we started paying for them but then circumstances changed and made them regular monthly payments---however we kept them for the same reason as above.

Routine items:
Groceries and Supplies ("supplies" were things that are expendable such as toilet paper etc.)
Furniture/Housewares 
Laundry
Gas/Transportation
Entertainment
Personal (my partner and I had separate personal expense accounts that gave us a small amount of money that we could do whatever with---the rest of our financials were all joint)
Rent
Utilities + Internet
Phone
School Related (textbooks etc.)
Car Payments (monthly payment)
Clothes (this should have gone in the section below, but for historical reasons it was up here)
Presents for People (this also should have gone in the section below)
Miscellaneous (this was just a place to put random small expenses that didn't warrant a category, like mailing in tax forms for example)

Irregular expenses (not paid every month)
Car Maintenance / Parking (Parking later became a monthly expense but didn't move to the top section)
Car Insurance (We paid twice per year)
Renters + Umbrella Insurance (we paid once per year)
Life Insurance (we paid once per year)
Travel
Health and Dental Plan (originally, we paid once per semester but this became a monthly expense; however we never moved it up to the top section)
Medical (out of pocket, deductibles etc.)
Emergencies
Car Down Payment (for budgeting purposes although we made the down payment in the first year, I amortized the down payment across the same time period as the car loan payments)

----

As you can see this is kind of an unmanageable mess of things! I promise that it did start out much more reasonable when I started in 2010-2011 but it became a monster over the years so that prompted the "reset" I mentioned above. Also you might guess that this level of over-micromanaging actually didn't really help in the long run.

It took me many many years into grad school to realise this, but now I can see why I did it this way. As a kid, money was always tight in our family and I think that stress came with me when I moved out on my own for grad school. I felt like no matter how well off we were (grad school didn't pay much but it was still more money I ever made in my life before), I used to have this huge stress where if I could not account for every expense, I felt like my spending would slip away from me and we'll end up accidentally broke. So the way I coped was to literally save every single receipt and write them all into this spreadsheet so that I could feel like I knew where every cent went. This was indeed important for a few years of grad school when money was indeed tight due to circumstances, but it was actually causing me unnecessary stress in the later years so I eventually realised this and stopped. 

If I were to do it again, I would probably still have the many categories but I'd probably group more of them together and use my long list as potential subcategories. I'd only use these lines to help plan a monthly/annual budget but I would pick some other simplified system of tracking spending that didn't involve typing in every receipt and doing a "good enough" job of approximating where I had budgeted well and where I didn't. 

[rising_star]

If you want a basic example of categories, the budget templates in Excel might be helpful.

@Adelaide9216, the easiest/ best way to save is to pay yourself first. I have an automatic monthly transfer from my checking account (where my paycheck is direct deposited) to my savings account. Once the money is in savings, I try not to touch it other than to invest it into my retirement account once I have a sufficient emergency fund (the amount I deem sufficient has gone up as I've made more money and had more expenses). The automatic transfer is basically what all financial advisors recommend. 

[Eigen]

I never did an ultra specific budget. My wife and I would sit down a few times a year and work out what our fixed expenses were (health insurance, car/renters insurance, rent, utilities) and then work out what we wanted to donate each year, and approximately what we felt like we could spend on regular expenses (groceries), and a side amount for those once-a-year expenses that crop up every month (car maintenance, vet bills, etc.). 

Then we just tried to keep our spending as minimal as possible, and save what we could. We found credit cards and paying them off weren't great (at least for me), but I get daily updated emails on our checking account and we use our debit cards for pretty much everything. 

That made it easy to see what we were spending on a regular basis and adjust accordingly. 

The one thing we did to in a very regimented fashion was emergency funds. We scrimped a lot until we had a 1 month (then 6 month) salary emergency fund built up, and now it's over a years salary. With that built up, there's more ebb and flow in our regular finances.