Hmm I don't know about using software to create a budget, but I do use quicken for tracking my checking savings credit cards and the lot. Once I got rid of my credit card debt, I just simply took 1500 a month and dropped it into savings as a bill for myself. Then I scheduled it in quicken so it automatically pops it into the register and reminds me. Helps control my spending a bit.

Also take your credit card and place them into a tea cup, fill the tea cup with water. Then place in freezer. Works wonders I tell you.

House down payment, once I get a house I will put a few K away for emergencies and then start investing etc.

I found the software thread but not the thread about actual budget types and styles.

My financial situation is either live like a pauper for 2 years or win a $25k scratch off ticket. With my luck I believe living like a poor man is my only option.

BTW That mint.com look very intriguing and tempting. I could use something like that.

I've tried the financial software angle, but I couldn't make it work for me. I talked with a friend and he recommended a spreadsheet.

Thats fantastic!

I want this for my sig! lol

Unfortunately this is not true in my life, as I am the spender in our relationship.

Isn't the definition of "essential spending" stuff you simply cannot limit? I mean hell, I'd love to save 40% of my income but then I'd kinda have to stop paying my bills and/or mortgage. Maybe that means I should've opted for a cheaper lifestyle but I live in the most affordable home I could find within 100 miles of my job.

Well, no. Your car payment is "essential" but you decide what it is. So, instead of a $550 a month car buy a $250 a month car, thus lowering your essential expenses. Some of the biggest problems in America are people living outside of their means.

It appears dude in the article is talking about 60% of your income in essential expenses NOT counting your savings to include any monies taken out before taxes (people forget about those 401k contributions sometimes). Heres some tricks I've found out over the years:

-No credit card debt. This is the hardest for people to get around, and relates back to SPENDING MORE THAN YOU HAVE. I do have an Amex Card, but that gets paid off every month (and I get points!). My wife has some department store cards for the discounts, but those also get paid every month. Paying interest here is throwing money away. Save then buy, and if you can’t afford it don’t buy it. Occasionally I will use a 0% for 12months deal to get something, but only because I know I will pay it off in 6. If you even think you might default on one of these deals, NEVER get them (they will charge you so much interest and fees you’ll owe double, easily). The first part of any budget should prioritize on paying these off and then closing them.

-Do the pre-tax 401k. Do a Roth IRA if you like (and you will qualify and continue to qualify to add the max). I would NOT put more than 15-20% of your income away for retirement if you're under 40. Some people disagree with me, but 15% is a lot to be missing from your income. Plus, there are other avenues to invest excess income that A) you can pull w/out penalty if you need to and B) can give better return on investment (ROE).

-Put a little in a mutual fund each month. Mutuals run the risk gambit, from low (bonds) to high (international stocks, precious metals). The younger you are (and the more you have in other investments) the riskier you should be. Especially the young, you can afford losses along the way and still come out ahead. Make an automatic deduction each month (some banks are as low as $20, some $50) into a mutual. As your income stabilizes, pick another one and start that up. I now have 12 automatic mutual deductions a month, and at $50 a time, it was never large enough at one time for me to miss the money.

-Have a savings that will allow you to live for 6 months (3months NOW, then build to 6 slowly if you need to). For some this is a lot of money, but this is important. This is your critical/emergency fund. You don’t take risks with this fund (no mutual here) you simply put it in a high yield savings account and let it sit. You *can* use this fund for things like buying a house, but user beware. This fund should cover 6 months of your expenses so that if you were laid off/injured you could feed your family and keep your cars and house while you recover.

-Buy Umbrella insurance. Never heard of it? It’s extra insurance to cover you when you get sued (or whatever you need insurance for). For example, you have a car accident and you get sued. They can only sue for the value of your assets, but they can sue for all of them. This can completely wipe you out. You car insurance likely only goes to 100k, or 150, and increasing it beyond that is cost prohibitive. Umbrella insurance is sold in chunks of 1mil and is like $100 a year. Take everything you own, add it up, and see where you fall. I most people probably have less than a million in assets so one chunk will likely do you fine.

Got all the above figured out? Start investing, really investing. Buy/invest in businesses, land (real-estate/houses too) – whatever interests you, but invest your extra dough. Having it sit in a savings account is a waste. You’re likely loosing money as they rarely make enough interest to cover inflation. This is the time to start setting up your future so you can retire early. I’m not here yet, but I am doing all of the above, and I am very content with my situation. A few more raises and/or a promotion and I can focus on this last piece.

I'm in my life right about where Shoal is, once I get my house its save save save, then invest invest invest. I want to retire in Ten years and do nothing. If I could somehow get a fixed income of 70k a year I would be a happy camper.

Here is how I got out of Debt.

After college and getting married I had about 40k worth of debt (mostly college loans.) First thing I did is start cutting out the crap of my life. TV was first gone, then my telephone land line. This help free up about 150 bucks a month and was helping a bit, also my reading has picked up so I read ALOT of really good classics. After I got a good job I was commuting to work and hated it, so I simply moved right next to my job and sold my truck. Even though to this day I still wish I had my truck (it was a blast to drive) but selling it allowed me save at least 5k a year in bills. After that I looked at all my bills and starting with the highest interest bill I would put most of my money into that and always ending with 300 bucks at the end of the month so I didn't go crazy and splurge. Currently I think I'm around 13-17k of debt but all of the bills now left over are super low interest multi-year crap. But once I get a house and save a small bit of cash for the "ohh sh*t" fund I'm going to be dumping massive amounts of money to kill the last of my bills off. My short term goals are to be debt free except my house payment, with enough liquid cash to survive 3 months with no decrease in spending. Once I get rid of my debt I'm going to cut and close all my credit card accounts and NEVER use them again.

Ohh yeah if you guys think keeping your spending in check is hard wait until you try to buy a house, my god does it suck speaking with all these weirdos from Banks, Realtor and stressing about moving.

There's nothing like paying a guy $3,000 to pass a pile of papers from his left hand to his right hand, then another $3,000 to read it.

I pay into a 401k. Not nearly 15%, but as much as I comfortably can while still socking money away in other, more accessible ways. Of course when I pay into my 401k I am betting that in 40 years a) the money will actually be worth something, b) the bank will still be around to pay it, and c) I'll be around to collect. None of those things are certainties.

I'm 24 and just starting to get my stuff in order. I have no debt at all and the fixed monthly expenses are low. I pay off my Discover card off, my car is fully paid off, and I am looking to move near the local Metrorail line that runs north-south so I can take that to the closest stop to work and bike the rest. Pretty much all the advice I've seen is what Shaol, and Pharacon has said. I don't have my spread sheet on me at the moment (it's on my home PC), but do you think 10% of my gross income for investing is too low?

I started looking for a small condo to buy and found a few 1 bedroom, 1 bath for about $70k relatively close to work. Not sure if I should wait longer or rent.

I guess I should find a financial planner. My father works for Bank of America so maybe he can help me out. I plan to try and follow the 60% bills, 40% savings rule above. Things seem to work out mathematically for me in excel. Thankfully I get a pay raise next week so that will help out.

Not exactly.

* 66 cities where buying makes sense - MSN Real Estate
* 34 cities where it's still better to rent - MSN Real Estate

Just Google up "Rent vs. Buy" or "Better to Rent?" for more hits... but be sure to filter out the ones that are more than a year, maybe two, old. The answer is, as always, "it depends."

Saying buying is only a tactic to make realtors rich is a little low... The only time renting makes sense is in short term, 1-<5 year arrangements where moving is always a possibility, like in the military, or if you're a nomad. Rent goes up an average of 5% per year. Your mortgage (property taxes, mortgage principal and mortgage interest, oh, and insurance) never changes, except for the occasional increase in property tax which will never be a major issue unless your house was severely undervalued in the first place. In 20 years you'll be paying close to the same mortgage as you did when you bought the house where as rent would be through the roof!

And of those, how can you count mortgage principal as a negative? It's a freakin savings account! You get payments to principle back when you sell, and the house has probably gone up in value more than inflation (that is the norm). I bought in 2004 and my principle has decreased by $20,000 from payments and my (realistic) value has increased by $50,000 (in a sh*t market, that was higher before the pop, obviously). That's $70,000 I would not have available to me if I was renting. Even if we're optimistic and say I could have saved $1000 a month if I rented that would mean I would be able to save about $50,000, with a 4% savings interest rate already added in, by the end of the year. That's a big ($20k) difference. Plus, the first year in a mortgage barely touches the principle, so the longer I'm in the house the bigger the rift between renting and buying grows. PLUS I have a freakin house, that's mine, and not a sh*tty apartment. FINALLY that "minor" tax break really, really matters, of which I would get NOTHING with renting.

Sorry, even in a best case scenario, renting sucks. The article you cite is horrible. He only talks about renting as a viable option because of things like the housing bubble and that you should instead invest your downpayment in the stockmarket (and promptly loose 20%, if you're lucky). This writer only sees short term and totally ignore the medium to long term points I raised above.

EDIT

For those looking at financial planners, do a lot of research and go to ones based on reccomendations. However, unless you have a lot of money (+100k sitting around) to invest, they are pretty worthless. They won't tell you anything a book won't (go buy "Rich Dad Poor Dad"). Get ride of your bank, get with a Credit Union (there should be a local one that you qualify for, or maybe one related to your work, like USAA for Vets & Family, or Desert Schools in AZ for teachers, etc). Through your credit union do some research into their mutuals and buy a few based on the risk you're willing to assume. There's already a ton of info in this thread, so I'm not going to repeat it. You can also get IRAs and 401ks through them, save for your kids colleges, and a whole bunch of other stuff. Heck, most credit unions will give you free financial planning, or at least free so many times a year.