Budget Guideline formula?

hare_ball_rabbitJanuary 22, 2003

I am looking for a site, or sites or just a good formula for the budget. I can't seem to come up with what I need on a google search. (just not putting in the right words I guess)

The type where it suggests what percentage of income a person should budget to go to mortgage, food, entertainment, etc...

I used to have a great site with a calculator in it that you could type in your figures and it tell you where you go over, and stay under a logical budget.

Anyone have a site to share? or just the formula?

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Check out the household finances forum. Look for the post that says something to the effect "what percentage of income goes to mortgage". There are some good guidelines listed in there.

    Bookmark   January 22, 2003 at 10:50AM
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thank you. I saw that post awhile back and thought it was here! I scoured this forum and couldn't find it. Now I know why...
duh me!

    Bookmark   January 22, 2003 at 11:02AM
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Rabbit - where have you been hiding? We miss you at OTH!

    Bookmark   January 22, 2003 at 4:46PM
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my hubby and I went through alot of different 'budgeting' books and advice... and finally settled on a system that works very well. (Some of the systems are crazy!)

in case it would help you, this is what we do...

First, add all of your 'fixed' expenses (these are the things which must be paid, in an exact amount, every month, or bad things will happen... ie your mortgage, your car payments, etc.). Mark that amount as "fixed".

Then add all of your 'necessary but not fixed' expenses in another column (things which must be purchased, but vary in cost, such as food, electric, phone, gas, etc.) and mark it "variable". Give yourself good estimates of what these will cost.

Then add a third column of 'unnecessary' expenses with things like vacation, restaurants, presents, etc. Mark this "extras".

If you are not trying to save every penny you can, but want to be sure to save some of your income, you might want to put 'savings account' in your fixed column.

Figure out your net pay each month (if you have a variable income, look at last years total for the year, divide by 12, and allow for a big margin of error). Subtract your 'fixed' expenses from your net pay. Subtract your 'variable' expenses next. If you have a negative number, then you need to adjust your spending on these, and refigure the column. Once this number is positive, you know how much you have left to spend or save. you can save or spend more by cutting back your 'variable' expenses.

We keep $2000 in our checking account at all times, before checks are added in, and before bills are paid. At the end of the month, we figure out what is left after all the checks have been cashed and paychecks deposited. Since we pinch every penny, our checking account tends to grow. When it reaches $2500, we transfer the extra $500 to savings. We try to keep $2000 in savings at all times. This is for deductibles, emergencies, etc. When our savings grows to over $3000, we transfer the excess to outstanding debts. If we had no debts, we'd invest the surplus.

Hopefully this may help you as you figure out a system that works for you. Obviously, you may need to keep more or less in checking or savings. We don't have any children, health problems, etc. We only have one car. So our 'emergencies' fund doesn't need to be as large.

    Bookmark   January 24, 2003 at 11:45AM
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Hello all,

This thread may offer some help to recent comers (even some old-timers with short memories) who are coping with budgettng.

Don't look on a budget as a system that bosses you - but as an ongoing project, adjustable as you go along, to enable you to enjoy more financial freedom.

A budget is your creature, to obey your needs - not a slave-driver pushing you this way and that.

Its job is to enable you to take more charge of your money and make it work more effectively to help you achieve your desired goals more easily - thus freeing up more money for you to use as you choose.

Productive budgetting, all. If you feel the need for some advice, there's a variety of it here, free for the asking (but without arm-twisting).


    Bookmark   March 9, 2004 at 6:17PM
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