Does anyone really budget? I put some thought into this recently and realized that although I have used Microsoft Money (now defunct) and am now using Intuit’s Quicken religiously since I was 18, I have never bothered to use their budget functions.
A few conversations about budgeting with my wife yielded some protest and got me thinking about how well I could actually stick to a budget if I created one. Basically at this point, I track our income and expenses and anything left over at the end of the month gets transferred into our savings. So I figure as long as we’re saving money we’re doing OK, right?
Using The Budget Feature On Quicken
Well, it turns out that as I have been examining our spending in different categories in the past few months, I find that we can definitely benefit from cutting back. For example, my wife and I both have iPhones. We signed up when unlimited data was the norm, so we each consistently paid $30 a month and another $30 for unlimited messaging on our family plan. That’s a total of $90 a month not including taxes and the actual phone service yet!
I took a good look at how much data and messaging we actually used and found that even during heavy usage, we could not even breach the 2GB plan that costs $25 a month. Messaging was not even close to 1000 a month that costs $10. So I changed our plans (even though the idea of losing the grandfathered unlimited data plan was a little tough) and am saving an extra $20 a month. Twenty dollars is twenty dollars, and saving it instead of paying for something we don’t use is great.
I think that’s where a budget is going to help most people. When most people think of budgets they immediately associate it with restricting consumption, which is never a pleasant thought. It’s always good to save and invest for the future, but what’s the point if you can’t enjoy your life now.
Worse, what happens if you never live to enjoy retirement? This is where you have to make a very personal decision and commit to living at or below your means so that you retain a healthy balance in your life. So let’s look at budgets as a way to identify where we can find additional savings instead of a limit to where we can spend our money.
My personal goal is to set up a budget this month so there is some room to tweak it before the end of the first quarter of 2012. Nothing fancy, just some basic category entries and limits based on historical averages in Quicken. Hopefully in 2012, I will be reviewing the budget regularly and identifying new areas to save money. I’ll keep you posted as to how I actually create the budget (I’ve never even looked at the feature in Quicken before) and what kind of progress I’m making.
Do you budget? If not, how do you keep track of your income and expenses? Do you have any budgeting tips? I’d love to hear about them!