Originally Posted by tropicalbeachiwish View Post
My H & I don't use any sort of software or spreadsheet for budgeting. I think you're smart to do that though. But it seems to be taking on a life of it's own and creating more anxiety. And, I'm sure that wasn't the intent of it.
I'm the one who started using software, but that was before we met. I had just ended a 3 year round of unemployment, and the new job paid 40% less than the one I had before. Happily, I had savings to live on, so no debt occurred. I had also split from my ex, was now a renter instead of homeowner, moved to get the job...lots of financial changes.
A "budget" is a declaration of pre-determined amounts that you will spend on various categories over a specified period of time. For consumers, a year is the best period of time, since none of our bills are payable in larger blocks...property taxes are annual, for instance, and that's the longest one.
But, in a new lifestyle, it's hard to know what budget to set. So, a common thing to do is track every single thing you spend on, and after a few months you have a general idea. And..this was in the early 90s...bank statements online were still in the future. Some vendors would accept only cash, some only cash or checks, some only checks or cards, etc. You had no choice but to use all three forms of payment. Tracking it took software. I could have done it in a spreadsheet, but actual financial software made a lot of it easier and at the time, Quicken was $9.95 and came on one convenient 3.5 inch floppy disk (those were the days!).
Took me only a few months to figure a budget and then set it. For "bills", I figured a year's worth, and placed that amount in a savings account tied to checking. I checked on things maybe quarterly and refilled the savings account when it was below the annual amount. I had been laid off for three years, so my highest priority now was to be capable of another 3 year layoff without financial distress. I was single, doing lots of stuff to socialize, and of course, buying regular groceries. I took the 3 month avg, added 20%, and called that my "minimum" in my checking account. If it dropped below, I'd cut back somewhere for a while. This worked out while maximizing 401k and IRA accounts.
I ignored the software for a while.
Then in '99 I moved and got married, got out the software to once again track the new spending...and the wife got hooked on it. So, phooey on me....
I kept using Quicken after that, but only to track my business expenses for tax purposes.