September Mortgage Update and I hate budgeting

Last month (August):
Balance: $75,266.62
Years left: 6
P =$912.18, I = $302.22, Escrow = 613.58

This month (September):
Balance: $74,178.15
Years left: 5.9167
P =$916.47, I = $297.93, Escrow = 613.58

One month’s prepayment savings: $0.68

Many of the pf bloggers we read talk about their budgets on a regular basis.

I hate budgeting.  I hate sitting down before the month starts and trying to figure out how much we’re going to spend at the grocery store or wherever.  I never remember everything and that always irritates me when I have to pay the bill of the unexpected thing that costs me that month.  These days, those emergency or forgotten fixed expenses tend to even out and are about the same amount every month, or at least are about the same amount averaged over 3 months.  I don’t need to put a name to each dollar so long as the dollar amounts are predictable.

The worst thing about budgeting is that it makes me think about spending money and that makes me want to spend money.  Suddenly I feel like I must make purchases I’d been putting off for sometime in the future, or wouldn’t it be nice someday.  Which means either I spend money that I wouldn’t have spent otherwise, or I feel trapped and poor because I can’t spend that money.  Even if it’s for things I wouldn’t have thought about normally.

Technically we’ve never really budgeted. At first we didn’t spend anything that wasn’t fixed or necessary, so no need to budget. I kept mental track of how much every purchase and kept a sharp eye on how much was left in savings to make sure we didn’t go over.  We never spent more than we had, so there was sort of a budget, but only in a very loose sense.

Then when we had more money, any time I wanted to spend on something optional I’d look at how much we had in savings compared to how much we’d need before we got paid next (plus a month cushion) and if we had more than we needed, I’d feel fine about the spending. If we didn’t have enough we wouldn’t buy anything.

Then we had so much extra money (60%+ take-home pay saving rate, dropping to 40% after baby #2) that I could just buy whatever and not worry about it.

Now, with DH no longer bringing in a large paycheck, we’re back to our spending being similar to our earning so I’m still trying to figure out how to deal with budgets going forward. We’re in flux and, as you may have noticed, I keep changing my mind about what to do.

I’ve been playing with Mint, but it is unsatisfactory.  I don’t like the way many of our expenditures don’t show up until days later, so even if we end the month “under-budget” it often turns out a few days later we’re over-budget in one category or another, and we can’t go back after the month is over to rejigger categories.

Most likely we’ll move to a look-back approach, “did we overspend last month”, or we’ll use a “is there enough in savings” approach. I dunno. Last time our earnings were this close to our spending, I’d keep stuff in savings and every time our savings got over a certain amount I’d put that money into the stock market, either into IRAs or taxable.  That way I never felt rich enough to go on a spending spree.  And I could do that again if I un-automated my extra 403(b) and the kids’ 529s, because that would allow an extra monthly income cushion in case of accidental overspending.  But it’s harder to re-automate those accounts than it was to buy an IRA.

Right now I’ve calculated how much money we need in savings by next May (because of the unpaid summer and next year’s tuition) and I’ve set-up stop-losses.  Once we drop below a certain number, I undo the 403b, then the 529.  Then below another number I undrip taxable stocks for their income flow.  It isn’t straight budgeting, but I hope it will do.

I don’t have the mental power to guess what we’re going to need on the first of the month or to research how much it will cost, especially with DH doing most of the grocery shopping.

[Breaking news update:  I got a COL raise this year !  Woooo!]

Do you budget?  How do you keep your spending below your income?  How do you decide what you can afford?

53 Responses to “September Mortgage Update and I hate budgeting”

  1. Kellen Says:

    I like Mint’s rollover budgets – I spend $500 on the garden this month, but set my budget to $100. Then, I am “over budget” until 5 months have passed.
    Unfortunately, Mint just had a little snafu and lost the rollover data for some of the budgets for a bunch of people.
    Nothing I tried before Mint worked for me at all – I would try to track spending in excel, etc, and I would never keep up with it. So Mint is much better than nothing for me.
    I wonder if Quicken’s paid and downloadable programs might be better for you? It might give you more flexibility in making changes in the past, etc. I would guess that they can also automatically pull data from bank accounts the way mint does.

    • nicoleandmaggie Says:

      I don’t think I actually *want* to budget at all. Mint just sort of does it automagically. And the OCD in me doesn’t like things about mint that are truly irrelevant.

      (What I want is to make more money so I can go back to not thinking about our spending at all! Alas…)

  2. NoTrustFund Says:

    I also hate bugeting. For a long time we’ve been saving such a large percentage of our income that it hasn’t been a big deal and I’ve focused more on savings goals. As we enter month two of my new job that required me to take a big paycheck [cut], we’re still figuring this out. I’ve always loved the balanced money formula for it’s big picture approach. Right now I can’t contribute to my 401k (and I put more in at my old job before I left in anticipation of this) which makes my paycheck artificially large right now. I’m trying to bank this money so we have more wiggle room once I have a 401k again.

    But yes, I hate strict budgets. I know they work well for some people but never for me.

    Happy Labor Day!

  3. Mrs. Pop @ Planting Our Pennies Says:

    We use mint, which I like since we can both be synced on it easily with our phones. We have budget categories (some of which are rollover – things like travel, cat, etc) but some categories we assign no budget to and any spending is technically “overspending”. But since we don’t do a zero budget, we “budget” about 30% of an average month’s take home pay, we have plenty of buffer room with that type of “overspending”.

    What do you mean by “we can’t go back after the month is over to regigger categories”?
    You can change categories, dates, split transactions of pretty much anything at any time. Mr PoP ran out of coffee beans on the 31st, but was already over on his coffee budget, so he changed the date on his coffee purchase after it came through mint to the first of the next month. No biggie, the only annoyance is that you have to wait until after the transaction is no longer marked pending (the italics) to do so.

    • nicoleandmaggie Says:

      Can’t change the budget sizes. Can change transactions, but some transactions update say Sept 2nd for an August 30th purchase and suddenly one is overbudget last month for that category.

      • Kellen Says:

        You can also change the date on transactions I think.

      • nicoleandmaggie Says:

        But I don’t want to change the dates on transactions– that part is accurate. I really did go to the grocery store on August 31st, even though it doesn’t post (that I want on August 31st) until September 3rd when the credit card company finally posts it. I want to be able to change the budget after the month is over so I’m not suddenly over my grocery “budget”.

  4. anandar Says:

    Another budget hater here. Honestly, I don’t care how we spend money during the month, I only care that we save enough, so I have no interest in setting up spending categories (which I would then inevitably need to rejigger). Major saving categories (retirement, college) get automatically taken out at the beginning of the month; leftover at end of the month goes into general savings. If we have enough months of little or no leftover, I issue a stern frugality warning.

    I’ve been thinking, though, that we need to set up beginning of the month auto deductions for charitable giving and some larger house related projects. Otherwise I feel too cheap to give the way i’d like, and the house stuff feel like we’ll never get around to it.

  5. Bardiac Says:

    My first several years on this job, with a nine month pay plan, I really budgeted so that I’d have enough saved for summer. As other income came in and I got in certain habits, I got a lot less strict about the budgeting. But I still keep an eye on being able to pay certain big bills: house taxes in December, insurance in August, and summer living, including some travel.

    Is there a beginning budgeting app or whatever to help new folks deal with a nine month pay plan?

    • nicoleandmaggie Says:

      That’s a good question! I’ve always wondered why credit unions have Christmas clubs but not Unpaid Summer clubs. Except I think all the K-12 teachers at least around here are paid over 12 months even though they earn over 9. Our uni has that option as well, but it’s opt-in. I think #2 doesn’t have the option and gets paid over 12.

    • Contingent Cassandra Says:

      It’s pretty easy to set up the equivalent of an “unpaid summer club” using split direct deposits and a savings account (if an institution doesn’t allow split direct deposits, then one could do an automatic transfer to savings set for a day or two after the pay date).

  6. monsterzero Says:

    I track all of my spending (spreadsheet) but I don’t really budget. I have a vague sort of budget written down, but there’s no mechanism to keep me compliant. Except that where I work we have the option to split our pay among up to four (!) different accounts via direct deposit. So I can divert my rent money and my savings and my Roth money before it hits my checking. This in theory keeps me from overspending, but in reality I often end up transferring some money back out of savings.

    The closest thing to adhering to a budget that I do is I keep an eye on how much I’m spending on groceries vs. restaurants. If the restaurant total approaches or exceeds groceries, I cut back on eating out for a while.

    • nicoleandmaggie Says:

      Our grocery spending has been skyrocketing lately. That’s a depressing thing to watch. But watch I do… Also DH has cut down our fancy cheese purchases, which is depressing. I’m getting a little tired of unobjectionable cheddar.

  7. Debbie M Says:

    I set up my current budget basically by tracking my spending and then assuming future spending would match. Then each year, when I got a raise, I would add a cost-of-living increase to all the categories and then see if I had any extra to increase something.

    I definitely go over budget lots of months, but I don’t care about that so long as it averages out. For example, my grocery budget it $103/month and my actual spending this year was: $126, $36, $67, $149, $119, $130, $108, and $48. My average so far is $98. In months after I go overboard, I look around a little harder in the fridge and pantry–surely after all that spending I have something that can be used up. This casual attitude lets me buy up things when they are available or on sale or whatever. At the end of the year, if I spent more than the budget, I change next year’s budget to reflect that reality.

    So what’s the benefit for me if apparently I feel I can just ignore it most of the time? There are three benefits I can think of right now. One is that I know how much money I need to live in the manner to which I’ve become accustomed. This lets me calculate when I can afford to leave the workforce.

    One is that some of my categories are for cyclical and unknown expenses: house maintenance, house insurance and taxes, car maintenance and insurance, and health expenditures. Most months I spending nothing or very little. But I still deposit the budgeted amount. I figure that if I insist on living a life involving home ownership, car ownership, and, uh, housing my soul in a body, then I am racking up the expenses even if they aren’t actually due yet. Then when I do need something expensive, it’s no big deal because the money is there.

    The third benefit is the category I call long-term fun, which is for rare but expensive things that I want but don’t need–usually vacations or electronics, but it could also be for furniture. Oh, and I have a related category for renovations. By putting away a certain amount each month, I give myself space to buy some things guilt-free. If I have the money. If not, then I don’t spend. Very easy.

    So every year I see if things need adjusting. Like one year I had to drastically increase my car savings–my “new” car was clearly costing more than my old car had. (And I had to decide what to shrink, too.) One year I added a category for health–normally I can fit that spending into my regular monthly “short-term fun” category, but I realized that I’m getting older and that probably won’t always be true, so I should start saving up. One year I added an extra category for selfish charities. My main charitable contributions focus on important problems like poverty, torture, and environmental destruction. This extra category is for stuff like local bike lanes and a local planetarium.

    My only problem is that I always want to maximize whatever budget category I’m thinking about. But having all the budget categories in front of me reminds me about the opportunity costs.

  8. hush Says:

    I have never typed out a budget even once in my life – and yet I’ve never had problems with money. Ever. And I did not come from money. Now I earn a lot and spend very little of it. This way of living just comes naturally to my personality. My financial life is automated so I pay my future self first. I’m insured against everything. Somehow I can afford everything I want, and my material wants are few. Then I married someone on the exact same page as me. I’m lucky.

  9. rented life Says:

    I don’t like budgeting, but it’s like a household chore and I don’t like most of those either. Budgeting makes me be sure I don’t spend too much, but also just helps me wrap my ahead around when to pay things since pay day and due dates are never the same and I don’t auto pay. If I’m not paying attention, we’d spend more money than we should that month. I don’t do by the penny. Things like groceries and gas for example, I put in a rough figure every week and by the end of the month, the total amount is enough. Because my income is different each check, I always under estimate how much we’ll bring in and do the budget off of that. Then if I make more, it goes to debt or savings, depending on what’s going on. I take a rough estimate of how much we’re bringing in, subtract our bills that must be paid, and then decide what to do with whatever’s left. Knowing I won’t have maternity leave, right now that money is going half to save for after baby is born and half to current debt. We will have one less bill before the baby comes on this plan, which will be very helpful.

  10. psycgirl Says:

    I don’t like budgeting, but if I don’t I end up over on spending every month (and overdrawn). If I made $400/month extra I’d have no problems. I use a spreadsheet I downloaded from Gail Vaz Oxlade’s website that a friend recommended to me. I get cash out every Friday and use it for the week, although sometimes I’m not really strict about what category the cash comes from (if I need more groceries, I will dip into my misc. fund, for example). I don’t keep a detailed budget after that – if the cash is gone, the cash is gone. Vaz Oxlade recommends you write down everything that you spend the cash on, but I am just too busy.

    • Liz Says:

      “If I made $400/month extra I’d have no problems.”

      This is a statement that causes me to worry. I think the same thing: if I only had X more, I’d be fine! But in reality, my spending simply reflects my priorities, and the things I “WANT” to spend more on (if I only had more) are probably less important to me than I’d like to admit. Of course, spending out $500/month on student loans (to pay them off quickly, that is…) takes almost 1/6 of my budget out of circulation every month. One day, by just paying off my loans, I *will* have that X more a month. Until then, I have to face the reality of my spending priorities and stop wishing so hard for something that isn’t going to happen.

      • nicoleandmaggie Says:

        It’s actually true for us though– when we were making more, we didn’t have any problems. Technically we don’t have any problems now (yet) either (otherwise DH wouldn’t have been able to quit), but I have to keep an eye on it or we might start having them.

    • Liz Says:

      I write down everything I spend money on, to the penny if possible. It doesn’t work for some people, sure, but it helps hold myself accountable to my loans (my priority), my spending realities (food, dog, miscellaneous), and spending wishes (moar savings!).

      Other people round, and that just wouldn’t work for me. Perhaps if I used a cash system, I wouldn’t care so much: I’d either have it, or I wouldn’t. But I find comfort in knowing what I’m doing.

      • nicoleandmaggie Says:

        I like the cash system even less than budgeting!

      • rented life Says:

        Same here, I can’t imagine doing the cash system. My mom does and it works really well for her (and boy did she need a budget plan for awhile, she had no clue what her money was doing). If we have cash on hand we tend to spend it faster, even though all the advice says it makes you more mindful than using the card, that just doesn’t work for us.

  11. Jacq Says:

    My bank app allows me to go back for a one month period – so something like 08/15-09/15. That’s how I used to see if I was on track reasonably on a total basis and doing that picked up the phone and cable charges that came in at the end of the month. It worked for quite some time because almost 100% of my random spending was done on weekends and I could just not buy anything but necessities on a given weekend at the end of the month. I didn’t really have to do that much though. My bank app now shows authorized but not cleared transactions on CC’s and that’s pretty handy since it looks like they show up immediately.

    Now that I’m randomly spending all the time – DON’T have 5 times my spending coming in the door – AND my spending has increased by a good 20% or more (I’m so bad I’m not even looking at it anymore – but there’s a certain freeing feeling in an extra $500 or so a month although I don’t really need all these clothes or kitchen gadgets and restaurants are getting boring) just enjoying life, I might (shudder) go to cash. Or I might be going back to work 5-7 days a month from Oct-Dec in which case I can go back to my newly profligate ways and not think about this crap. Meh, I’ll worry about it in January. I like being retired from the spending police force.

    • nicoleandmaggie Says:

      neat on the bank app!

      We really miss your blog posts on how you’re doing the quasi-early-retirement thing.

      It does suck when restaurants get boring. But I guess it’s less expensive when they do (so long as they’re not boring because you expense them for required work meals).

  12. Sapience Says:

    I use iBank, which I sync with my banks records. I take 15 minutes once a week and make sure I haven’t gone over budget in any of my categories. Doing it that often means that the amount I have to spend is always fresh, and I won’t accidentally go over. I’m also trying to keep so busy with work that I don’t have time to spend money.

    I have to keep a lot tighter track of my budget this year than in past years because while my pay ostensibly doubled as I went from being a grad student to a post-doc, I’m no longer guaranteed “extra” summer pay, I moved to an urban area from a rural one, I went up a tax bracket, and I’m living on my own without a housemate for the first time in a decade. I was putting 10% of my income in savings as a grad student. If I keep to my really strict budget (stricter than what I had as a grad student), I’ll be able to put the same absolute amount of money in. Of course, in my current job, I am required to automatically put money towards retirement (matched by my employer), so I’m saving more than it feels like.

    • nicoleandmaggie Says:

      It’s amazing how those expenses go up after graduation. I remember when we first graduated, my salary seemed insanely high, but now it feels kind of tight. But yay automatic retirement saving!

  13. Leigh Says:

    I hate budgeting too. I’ve been doing it for long enough now that it really requires no work to set a budget for the following month, which makes it much less annoying. I mostly use my budget to average out those yearly/bimonthly fixed expenses and variable discretionary spending and to forecast how much I can save each month.

    I keep my spending below my income because I’m simply not good enough at spending money to spend that much money each month/year.

    I decide what I can afford by if I want it. If it doesn’t fit into my budget, I try to think about it for a bit and then I’ll make it work if I really want it. It works for me, but I’m sure it would work for everyone… I hope that if I some day have a lower income, I could reduce my spending.

    I don’t like cash. I just spend it. Credit/debit cards make me feel more accountable. It doesn’t really matter which since I see credit cards as a negative marker on my checking account (offsetting the balance).

  14. Revanche Says:

    There are aspects of budgeting I like, and some aspects I just don’t do anymore. I don’t have time to track my spending daily like I used to when I had nearly no money to speak of but I also actually make real money now, so I just set annual spending limits (spend up to X and no more). That lives in a spreadsheet and I do monthly check-ins to add up how much was spent and therefore how I should recalibrate whether and how I spend on various categories. I don’t check things six times a month, I don’t keep my daily spending running balance on the side anymore. I like knowing that I’m below projections, when I am.
    I stopped using both Yodlee and Mint b/c I don’t like how both of them aren’t flexible enough and can’t download all the relevant information seamlessly without giving me errors. I’d like something that just auto-magically imported all my income, spending (cash or credit), and annual projections and set up a spreadsheet with bill reminders. But since that’s not going to happen ….

    • nicoleandmaggie Says:

      I think I’d like to go back to monthly recalibrations like we did when we were RAs (and were no longer spending 20K/year on housing). I dunno. Perhaps the stop-loss stuff is enough.

  15. J Liedl Says:

    Shh. I don’t budget. I allocate a fair bit of money. I finally learned to save first, no matter how painful that felt. Cutting spending through couponing as well as watching for sales on regular expenditures helps me a lot more than watching a budget to track all the purchases across the household on an ongoing basis, however. I will never pay regular retail for toilet paper again!

    • nicoleandmaggie Says:

      Saving first makes me a lot happier too! Though we usually pay retail for toilet paper these days. (Back in grad school though, TP was the one thing that I was scrupulous about couponing for– 25 cents or less a roll of the premium stuff was my goal.)

  16. Laura Vanderkam (@lvanderkam) Says:

    There’s a book out tomorrow called Scarcity that talks about this (I think — obviously haven’t read it yet!) When you think something is scarce, you fixate on it and make worse decisions than if you don’t think it’s scarce. Can be any limited resource — time is a big one. When you feel time is scarce you feel less happy about it, and spend it in less than optimal ways.

    • nicoleandmaggie Says:

      Sendhil has some good talks on the internet about it too. It’s hilarious because he really used to do some stupid stuff when he was time short. (I shared an office with one of his roommates once. They regularly forgot, just forgot, to pay their bills.)

  17. Linda Says:

    It’s been many years since I’ve had to create and follow a strict budget, and I’m grateful for that. When I first moved out on my own after college, I used to make very strict budgets and stick to buying only what was on my list at the grocery store.

    Now I track my expenses and income using Mint and set some general goals for how I spend, but I don’t stress over the fact that I’m often over or under budget. As long as I’m making more than I’m spending and keeping up with my savings goals, I’m happy with my money management.

    Frankly, I’ve never been able to make that budget feature in Mint work for me. I have few rigidly fixed categories, and since there is always some varying amount left over every month even after my savings goals have been met, I could never figure out how to set it up in Mint so that it didn’t look like I was over or under budget. Even the rolling budget thing hasn’t been making sense to me.

  18. Rosa Says:

    would it work to have a mixed set & not set system – like not set an amount for “groceries” but do have an amount for “all unfixed spending” and only care if you go over *that* and then check Mint to see what it was if that happens? We do that with cash – fixed bills are budgeted, other than that we get a certain amount of cash a week to spend (that covers groceries because so much of my food spending is at Aldi or the farmer’s market that I use cash for it). So last week we spent like $80 at the state fair and it came out of that amorphous part of the budget.

    A friend of mine uses Mint and it just emailed her that she was over budget for vet bills because her cat got really ill & she had to put it to sleep. It really bothered her.

    • nicoleandmaggie Says:

      logically, yes (and this is sort of what we’re doing, except really it’s one big slush fund, but I’m trying to keep under a certain $ limit each month)
      aesthetically, no! Mint with the red bars… so sad.

      • Rosa Says:

        maybe it’s a blunter instrument of communication than you need.

        what i really want is something that looks just like the excel spreadsheet I use for myself when i’m not too lazy, that makes 3 separate pie charts – all fixed spending by category, all unfixed spending by category (this is the part i never actually update and the one that would be useful) and all savings by investment category. In my dream world it would update automagically and have, like, tree rings of growth for each month on the pie chart.

  19. Ana Says:

    We don’t budget. I’ve never budgeted. My husband keeps an excel spreadsheet that we glance it, with recurring expenses set in and updated every month, so we know when we need to be careful. When I need to cut back spending, I just stop buying things (clothes, books, etc…) and we stop eating out (mostly….) and that usually sets things back on track unless unexpected expenses come up during a low point. We always pay ourselves first in savings so anything we spend comes out of the excess. Unless things change, I have no intention of making a strict budget. That would just stress me out. We have discussed sitting down and making ourselves an annual “Fun” budget for entertainment/restaurants/date nights and a “self” budget for clothes/books/music and other non-essential purchases.
    I would never use cash. Cash just…disappears on me. Also we get really good cash rewards with our cc (AE Blue Cash)—we paid our last month’s CC bill solely on rewards from the last year.

  20. oilandgarlic Says:

    I keep an excel sheet and try to enter accurate figures for all fixed costs, from groceries to gifts to auto/renter insurance. However, I do just add a line item or increase amounts when necessary which makes it look like we’re overbudget (by about $400 !) every month. We do pull from savings at times, but we try to put $ in retirement first and we don’t touch those accounts.

  21. myscientificlife Says:

    We don’t really budget, but our online banking (PNC) keeps track of general categories of purchases so we can see where we are if we were interested. The only downside is that since they have changed to the HTML5 version, it is down a lot.

  22. MutantSupermodel Says:

    Wow this is an interesting post to see from you guys. I mean I know your whole situation has changed but it’s still interesting to see you tackle it and whatnot.
    I hate hate hate hate budgets too. I have tried them I suck at them. It never ever works for me to say I have $400 for food this month and THAT IS IT because then I start panicking and freaking out and it’s just annoying. The closest thing I have come to budgets that work is something like Amount A is what I need for bills. What is left goes for everything else. I have to say that I think the single biggest thing that helped me manage my money was getting into a job that pays me once a month. I don’t know why this works so well for me but it really does. I hope something magically clicks into place for you. Things are clicking for me right now and it’s SO MUCH NICER than the usual crapstorm I’ve had to deal with.

  23. Carnival of Personal Finance #430 — Money Life and More Says:

    […] from Nicole and Maggie: Grumpy Rumblings presents September Mortgage Update and I hate budgeting, and says, “Nicole and Maggie discuss ways to get around having to have a zero-sum budget, […]

  24. Nicole and Maggie discuss budgeting (both individual and family) and link a lot | Grumpy Rumblings (of the formerly untenured) Says:

    […] DH was unemployed and we had to keep a tighter rein on spending) in which I talk about how much I hate budgeting.  You can also combine a loose budget with tighter monitoring of spending as Leigh (who […]

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