My ‘How Do You Budget?‘ post was a nice success, and the giveaway winner has been notified. Here is a breakdown of the replies:

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The comments in my last post went off in a wonderful direction – people sharing how they budget. I’ve haven’t yet improved my own simple but ineffective budgeting system, so clearly I need some new ideas, as I’m sure others do as well. Therefore – How do YOU budget?

Do you use pen and paper? Excel spreadsheet? Which one? Quicken? MS Money? Open-source version? Online software? Spousal nagging?

If you contribute, you will be entered in a drawing for a free 1-year subscription to either Forbes or SmartMoney. Spread the word and share!
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Just because I have been ignoring my budget (my last budget update was back in early December), doesn’t mean you should! Someone just sent me a link about MySpendingPlan.com, a free online budgeting software system that works on the ‘envelope system’.

I’ve made an account and fooled around a bit, but haven’t really gave it a real trial run yet. It looks like you still have to enter all your transactions manually, similar to the You Need A Budget System (review), so I have a feeling I personally won’t go for it. The site does also ask some weirdly probing questions (why do they need to know my address?), most likely because they seem get their revenue by hooking you up with mortgage brokers and real estate agents. But hey, it’s free, so I can’t complain.

Here’s a tough question I got via e-mail, paraphrased:

“I finally got a stable job. I have $9,000 in credit card debt, half at 12.99% and half at 8.99% APR. I have no emergency funds at all, that is why I have so much debt. Should I pay down the credit cards or should I build a backup money fund? Do you think I should apply for more credit cards to lower the APR?”

This was in response to my Emergency Fund options post. As I am not the best person to ask about getting out of credit card debt, I’m throwing this out there for feedback. Here’s what I have off the top of my head:
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I’ve decided there are three types of people out there:

1) One who needs a budget, otherwise they’ll spend whatever they can get their hands on, and then some,
2) One who does a pretty good job by themselves, stays out of debt, but could defintely benefit from a proper budget, or
3) One who is so anal about their money, that they don’t need a budget. They already scrutinize every purchase before they make it.

Let’s face it. Most of us are #1 or #2. So that’s why I agreed to review the YouNeedABudget (YNAB) Budgeting Spreadsheets.
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Even though I track our net worth monthly, it can be difficult to determine exactly how well we are building our wealth due to large recurring expenses we have that do not bill on a monthly basis. For example, we may have saved up $1,000, but if it happens to be time to pay our insurance dues then all that may be gone. Also, our savings in later months will then be inflated. So I am going to try and smooth out these bumps by creating an account to send monthly payments too in preparation for an upcoming bill. So instead of a $600 bill in 6 months, I will put away $100 a month into a high-yield savings account and pay off the bill when it comes due with no spikes in our net worth.

First, I need to make a list of all the expenses and their billing interval:
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As expected, since we hosted my family for Thanksgiving, we blew through the Dining and Groceries budget guidelines this month. It takes a bunch of food to keep 6 people fed for 6 days. We finally finished our ham and turkey leftovers though! Everything else seemed alright, we must have spent a whole tank of gas just on outlet mall hopping. Hurray for American Consumer Day (aka 12/25). Speaking of which, our tally for holiday gifts is almost complete, I’ll share that in a bit.

I replaced my landline telephone service and switched to SunRocket VoIP service back in February. I got a whole year of unlimited local and long distance, with tons of features, for $199 a year or $16.58 a month. Now that I’ve had it for 10 months, I’d though I’d give it a review. The short version is, it’s definitely not perfect, but for the price and my current needs it rocks.

Pros:
Simple, no-hassle pricing – The $199 includes everything, ALL features, ALL taxes, I haven’t been charged a penny since my first $199 bill. There are no rebates to mess with. There is no cancellation charge. If you cancel within 31-days, you get a full refund. If you cancel after, you still get a prorated amount back of your unused time. Even the shipping for your free equipment is free.
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Here are our results our Target Budget Areas for October:

Overall, a solid showing. Most importantly, we had minimal miscellaneous expenses, which includes stuff like clothing, household things, pet care, travel, medical – all those little things that add up quick. Gas and entertainment were okay. I felt like we ate out a lot last month, but I we were still close to our total food cost goal.
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Here are our budget results for September via Quicken:

We did fine overall in most areas including Gas, Dining Out, and Groceries. I try to drive as little as possible these days, and use public transportation for school. Our entertainment bill was $50 less this month, because of our requested cable bill reduction, and the fact that they bill one month ahead and applied the discount retroactively to last month’s bill.
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Here are our budget results for August:

Gas – We ended up not spending that much on gas this month, I think it just balanced out with going over on gas in July. The high prices haven’t really affected us since we don’t drive all that much.

Dining Out – We are getting used to eating out less and cooking more. It is making me dine out more consciously so I can still try all the new restaurants that we want.
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