Ask HN: How Do You Budget?

Me and my wife have been using lunch money for a while and it works well for us.

https://lunchmoney.app/

I tried many high tech tracking apps but when I moved to Asia none of them worked with my bank. Now I have one bank account, zero credit cards. Every month I take out a fixed amount of money and put it in envelopes like a Grandpa would. I spend cash from the envelopes. Works like a charm!

In Canada we have these refillable prepaid VISA cards https://www.koho.ca/. Not a plug, but it's honestly solved money management for us.

Every week, my wife and I load some amount into the 'joint' card, and a smaller onto the personal cards. The joint card is for necessities, the personal cards are for fun. It's much more convenient than the cash envelopes we were doing before.

Credit cards don't work for us because it's too easy to cheat, and you only have to feel guilty when you square up the tracking. With the prepaid cards, you get a much harsher signal when you're over budget.

I don’t like tracking things, so a change I made recently was to use larger budget categories. Instead of mortgage, electric, gas, yard, etc. categories it is House as a category and all those things are in there. I used to use the categories as a form of a checklist to make sure bills were paid on time, now with major categories it’s less tracking/paperwork.

The other change was putting as many bills on autopay with a points credit card and just paying the card off every month. If you’re susceptible to carrying a balance then that’s not recommended but it does cut down the number of dates/bills to track.

Having huge budget categories doesn’t let you track how much you spend on lattes, LOL, but if you notice your large category for Living at $1000/month (groceries, dining out, clothes, diapers, etc) is being used faster than $250/week during a month you have a bunch of potential items to cut back on in that category to keep it on goal. With smaller budget categories, I found myself reviewing at end of month and then “trying better” next month and it felt like whack-a-mole.

Me and spouse are lucky enough to earn a decent living. Without that this method wouldn't work. We also use multiple checking accounts from a credit union that doesn't charge insane fees.

We keep track of our monthly recurrent bills. We limit this increase as much as we can. This all comes out of a special checking account. Beginning of month we transfer bills to this from savings. Currently about 40 percent of our income goes to this.

Entire paychecks go into "savings". This is used to transfer to other "budgets".

Also each paycheck has certain HSA, and retirement savings deductions withdrawn. We don't pay attention to this.

We each have our own debit card that we "pay" ourselves with. This is approximately 10 percent of our income. We use this for expenses such as eating out, hobbies, small individual expenses that we don't want to justify to each other.

The remaining money we have an agreement that we must discuss any decisions with each other before using.

There are problems with this method, and sometimes we cheat, or use credit cards. But we have long term goals and love each other and strict money management isn't as important as having a happy relationship without having to constantly worry.

I use a barebones double-entry system (such as GNUCash or Ledger). At the beginning of each month, I set a budget, and I deduct all the forseeable fixed expenses (rent, bills, groceries, eating lunch at work). I also deduct a part for savings and investments. The remainder I divide by the number of days in the month, and that becomes the average amount per day I allow myself to spend on eating out, coffee and other small discretionary purchases. The goal is to have the budget continuosly balance out to zero.

For each of the larger, non-monthly expenditures (travel, quarterly/yearly bills, furniture, electronics) I have virtual accounts in which I put money every month, and take it out when the expense comes, so as to keep the balance of the month at zero. I allow these virtual accounts to go negative, but not often and not for long.

I have a "tab" for shared household expenses; 50% of each shared expense is credited or deducted from the "tab", depending on who paid. This 50% doesn't affect my monthly balance. My partner does his own accounting (i.e. none).

If the months balance is trending positive, I can either increase the daily allocation for the rest of the month, move some to investment, or save more towards a large expenditure.

If the months balance is trending negative, I can decrease the daily allocation for the rest of the month, or save less for future expenditures (which I then have to reduce).

I make the budget of the following month based on what I learned from the previos one(s), and a script that calculates how much money to put into accounts for future expenditures.

This is gonna sound crazy… but at some point I stopped trying to budget because my SO and I couldn’t find anything that worked for both of us. My wife wanted to do the envelope method, but it ended up where she would basically leave the envelopes in her purse and I was dependent on her for any purchase. We switched to YNAB for a little while, but my wife would never enter transactions consistently so I would always end up making one large adjustment at the end of every month.

Ultimately this is what we do now: all routine bills/savings/short and long obligations get paid or deposited first, and there is usual only around a potential $100 variation in those numbers each month. So that ends up being a magic number that we both know we need as a minimum. Outside of that, we basically use our joint credit card account for everything else. When it gets close to a certain number we both stop any unnecessary spending until the next billing cycle and then we pay it off entirely. So far we have maybe hit that number three or four times in the last two years? It gives us a high level view of our spending and we don’t get in the weeds about “can we get this” or stress about every dollar being correctly utilized. If we realize that we can’t afford something we either plan for it during the next billing cycle, or dip into savings if we need it urgently.

We don’t leave each other in the dark on any of this though. We both get a notification on every transaction we make, and we’re both very transparent on our purchases.

I’m not going to recommend you follow my method, but so far it works pretty well for us.

I've been using YNAB for about 7 years now and it works for me. I'm not particularly attached to their service (I think it's really expensive if you don't use their bank integrations which don't work for my banks anyway), but the basic principle has clicked in my mind early on.

If I were to start fresh now, I would probably use Actual[0], which uses pretty much the same idea as YNAB, but has certain features like e2e encryption that I value.

Going to sound insane, and it probably is.. But we don't budget, we have never budgeted, we have no idea how much money flows in or out. But we do a real effort not to spend money.. We don't buy random crap all the time, we don't have subscriptions to anything but water, power, internet, cellphones and netflix. We don't eat out. We buy food when they're on sale. We cook the food we buy, we eat the food we cook, we don't throw out food. We don't live in expensive areas. We own two homes (both paid in cash), we have never taken out a loan, we own two cars and have a son.

We live consistently below our means and have a surplus of capital every month. We don't earn amazing salaries.

So… I used to budget but it didn’t really helped my wife and I, so now I only track our finances.

When my paycheck arrives, it arrives to an “income” account, which is ONLY used to receive the paycheck money.

From there I transfer money to a “charity”, a “recurring expenses”, a “day to day” and a “saving” accounts, and the money is simply divided by percentages.

All of my bills, debt payments, subscriptions, etc, are linked to my recurring expenses account.

All of my expenses like groceries, fuel, restaurants, coffee, misc purchases are covered with the day to day account. We use a credit card (for the points!) but all I need to do is compare the amount in the credit card vs in the day to day account to know if I’m on track or if we can afford this month that extra thing.

Saving and charity are kind of self explanatory.

But from all this, separating the recurring expenses (plus 10%) from everything has brought the biggest reward!! I’m no longer stressed that we might no have to cover a bill. If we are running tight, in only in the day to day and we can always skip a restaurant :)

This is just my method of doing money (inspired by the book profit first) and it’s been working for us pretty good!

I hope you find something that works for you too!

Excel for me. Add the known expenses and income from the past couple months, have a separate column for the yearly cost of less frequent things (quarterly or annual bills, etc). Works well for me and is pretty accurate. It's really not much paperwork once it's set up - just adjust the amounts or add a new row.

I think the real question is, what are you expecting to get out of it?

All it will really do is show you how much income you have and where the income is going. It can help you hit a savings goal or cut costs to know how much is left after expenses or what your biggest expenses are. The action of actually using that information is up to you.

Joint account for all expenses. All fixed and most of variable expenses are budgeted. There is some leeway for spending money given that we maintain some buffer on the joint account. I have a ridiculously small amount for spending allocated for myself but then again I don't need much :)

I have a spreadsheet for yearly forecast for income and budgeted expenses. I track income and spending every month using a script I wrote in Python. It takes all our bank and card statements as input, categorizes automatically most of them and then asks me to categorize the rest of expenses. I get CSV as an output that I can import as a sheet in my spreadsheet.

My paychecks technically go to my company, then I pay myself a small portion of that. The rest of it gets put into a company buffer (which I am still building up) and taxes. Once the buffer is built up sufficiently I'll start investing everything except for salary and tax into low cost index funds.

Once the small salary hits me, I have a monthly limit of spending money that I try not to go over. This limit excludes rent but includes all other necessities and entertainment. I don't always succeed in staying under the limit, but I always hover around it and don't raise it regardless of income changes. Any remainder goes into a vacation or emergency buffer.

More detailed forms of manual budgeting have not been something I've been able to stick with consistently (yes, I've tried YNAB). There used to be a handy automatic option that showed me a great breakdown of my spending categories and such, but that service got shut down. So now I just have the one limit.

We just have joint and personal accounts. Joint is for groceries and fixed bills everything else goes into personal after a set amount goes into savings. Super simple. Only works if you aren’t really sensitive to expenses like food gas etc. If +200 affects you much then it’s not a good nerd

Well I love being able to visualize gains and losses in our monthly budget, goals, and upcoming expenses. I too have tried so many options including apps that link directly into my bank / credit (wasn't crazy about that.... But needed to find a working solution). Finally after years what has worked and still is for us is a self hosted solution called Firefliii https://github.com/firefly-iii/firefly-iii

It takes some discipline to keep up with the flow but now that its part of my daily tasks it takes a few minutes a day before bed to do and it helps me keep an eye on where I'm spending. The one big thing is getting use to no more bi-weekly budgeting. Make it a one month budget and stick to it.

Best of luck to you and your family!

Qube Money. After about 9 years of using systems that required us to import transactions, the tap to spend from virtual debit card method of Qube Money is a huge time saver!

Excel file ;-) started in 2011 and I am creating a new file each year.

I'd argue this kind of paperwork isn't worth it. Mental cycles better spent on learning skills that can earn you more. Time better spent on money saving tricks / life hacks such as (1) walk/cycle to store (2) make your own bread, saves a fortune (3) hunt around for best deals. Just my 2p ...

Paycheck arrives. We put 50% into savings account automatically. Fixed amounts get moved to household expense accounts, from where bills and rent are paid automatically. What we have left is what we live on, both for groceries and entertainment.

Only the household account is shared. We keep our savings separate. It's good practice.