Trying to save and make it work with the budget?

Question

My husband and I are trying to do the pay ourselves 10% thing, so I used Quicken yesterday to write up a budget according to our basic needs (I thought it was pretty strict anyway), and of course it left us in the red by about that 10% that we want to save - grumble, grumble, grumble.

I know we can make it work, and I've probably just got to go back to the drawing board here. I've heard that once the money you save is out of sight and mind, most people magically manage to make their budgets work anyway...is that true? Should I just hide that money and see what happens?

Answer 1

I have learned that the best way to save money is to never see it. That's what 401Ks at work are for - to automagically hide a portion of your income so you never get the chance to spend it.

I've been working for 20 years, raising a family, and getting whopping increases in salary. Guess what - even though I'm now making almost 4 times what I started at, there's NO money! My house payment is the same as it has been for 18 years, and the cost of living in general has remained very steady - but when you have money, it tends to get spent!

If you want to save money, start by not carrying any debt. One house payment, one car payment. The credit cards should be paid off every month. If this means one of you drives an "older" car, get over it. We have 3 cars, and not one of them was less than 5 years old when we got it.

Coupons are another real money saver. My wife clips coupons, and saves an average of 20% on the grocery bill every month. It is a lot of work, but it's worth it. I once told her she could keep all the money she saved every month. That didn't work out though, because there always seems to be something else to spend the money on (kids, school, etc...)

The best way to save money is to put it in the bank and not include it in what you have to spend.

Answer 2

Since you have Quicken, cut all the fat of the budget, just necessities like electric, gas, mortgage payment, etc. If you are still in the red, then you'll have to get a second job to make more money.

Answer 3

Think about it this way: We call it "Pay yourself first."

The idea is that you deserve to be paid before any of your creditors. You can do this by splitting your direct deposit into checking and savings so that savings receives up to 10% of your net pay. You can also set up a regular transfer a day after your normal paydate from checking into savings.

It is true that you don't really miss smaller amounts.

Answer 4

Try this: 50% for the necessities, 30% for spending anyway you like, and 20% to save and invest..

The 50% necessities means the usual stuff; or, if you lost your jobs tomorrow, what would necessities be then? you'd soon know!!

30% for fun money and 20% to save and invest are self-explanatory....you could make the 30% to save and invest; 'tweak' it any way you like; try this with your software and see what results you get!!! I'd like to know how it turns out for you...email me at [e-mail]