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What's involved in your budgeting method? (lemmy.world)

submitted 10 months ago by [email protected] to c/[email protected]

34 comments fedilink hide all child comments

I think budgeting and practical finances should be taught at multiple stages throughout a student's life. I thought I knew the general idea but didn't appreciate how much neglecting it would set me back.

What is your process for budgeting? As a starting point this article lists a few methods.

I use zero based budgeting where every dollar is assigned a purpose. I don't end up sticking exactly to the plan, but I do keep a spreadsheet which lists my current balances and all expected expenses, so I can see my future balance and avoid going in the red. A couple times a month I cross off expenses which have been paid and update the balance. This is especially helpful to me because a big portion of my income is irregular month to month.

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[–] [email protected] 13 points 10 months ago

I'm really lazy, so I use the jar method (they article calls it cash stuffing or the envelope method). But I use multiple accounts and automated transfers.

Basically: I have one account for personal spending, one for bills, one for insurance, one for groceries, one for vacation money, etc. I get paid regularly, so I have automated transfers move money into the appropriate accounts.

When it comes time to make an expense in the given category (e.g. insurance), I pay it out of the appropriate account.

The benefits

I don't need to think about it after it's set.
If I overspend in a category, it doesn't reduce cash available in other categories.
It's easy to tell if my budget is wrong: ie, if an account is building up cash, or doesn't have enough money, it's time to revisit the budget.

The first item is the most important to me. I'm not consistent enough to manage a spreadsheet.