My friend asked me if this looks like a good budget that she has set up. I thought that I'd come here to see what you all think of this. It does look pretty good to me. But does anything need to be added or removed from it?

INCOME:
Wages and Bonuses
Interest Income
Investment Income
Miscellaneous Income
Income Subtotal

INCOME TAXES WITHHELD:
Federal Income Tax
State and Local Income Tax
Social Security/Medicare Tax
Income Taxes Subtotal
Spendable Income

FIXED EXPENSES:
Mortgage or Rent:
Car payment:

FLEXIBLE EXPENSES:
Food
Utilities (electric, water, gas)
Phone (Land Line, Cell)
Internet
Satellite
Car gas

INVESTMENTS AND SAVINGS:
401(K)or IRA Stocks/Bonds/Mutual Funds
College Fund Savings
Emergency Fund
Saving for vacation:

YEARLY EXPENSES:
Home owner’s insurance
Property Taxes
Car insurance:

MISCELLANEOUS:
Entertainment: (Eating out, movies, dates)
Hobbies:
Clothing:
Gifts/Donations:
Personal Hygiene Products: (soap, shampoo, deodorant, toothpaste, ect.)
Household Items: (cleaning supplies, paper plates, napkins, ect.)
Medical expenses: Medication, doctor’s co-payments

EMERGENCY SAVINGS:
Auto Repairs/Maintenance/Fees
Home Repairs/Maintenance
Appliance repair

By Reds9298 on Thursday, February 7, 2008 - 07:30 pm:

I don't include interest or investment interest in my income, or DH's bonuses, but maybe some people do. I don't deal with tax taken out, but again, some may require that in their budget dependent on their job. I just go by spendable income alone and work from there. I also don't include clothing because to me it's not a monthly thing, but I know that many do. I just have one 'Grocery' spot in my budget, and I know that includes food, paper products, hygiene products, basically anything we need to keep the house running.

The only other thing I can think of is if your friend carries a balance on a credit card and has a payment to make each month. Also a student loan, home equity, or anything of that nature.

By Karen~admin on Thursday, February 7, 2008 - 08:14 pm:

Ditto Deanna. Our budget just includes net income, no monthly amount budgeted for clothing (or gifts either, for that matter - probably something I should change). Personal & household items go into my grocery budget. Medical is one of the biggest expenses we have.

By Reds9298 on Friday, February 8, 2008 - 09:55 am:

We don't include gifts either, but definitely should because it's a pretty big expense for the whole year. We include prescriptions that are set amounts (like DH's ulcer meds) and of course our monthly premium, but don't set anything aside for random visits to the doctor, just because we rarely go.

By Adilanylkoorb on Friday, February 8, 2008 - 06:07 pm:

How do you set money aside for bi-yearly and yearly payments like your car insurance and home owner's insurance? I heard somewhere about someone takes envelopes and writing home owner's insurance, car insurance ect... on them then putting a little money in it each pay check that will add up to the amount that they will need for that expense when it is due. But I would think that would be too tempting to get the money out if you wanted it for something else.

My friend doesn't have any kind of debt...credit cards, student loans, ect.

By Reds9298 on Friday, February 8, 2008 - 08:29 pm:

We determine the total for the year and divide that by 12 (homeowner's insurance, property taxes, car insurance). That's the amount we budget each month for what we call our 'big bills'. We have a separate savings account for Christmas and 'big bills'. There have been years when we haven't put the $ back each month also, but used DH's bonuses twice/year to pay those bills. It just depends.

I've never done envelopes. A savings acct works better for me.

By Adilanylkoorb on Friday, February 8, 2008 - 09:33 pm:

While we're discussing this, I was wondering a couple of things for myself.

Do you all pay off a bill in whole (if you have the money) or do you make payments on it? Like say a mechanic bill? My DH wants to make payments on these types of bills. This bugs me because I would rather pay it all off at once and forget about it.

Also how should we set up an emergency savings accounts were the money is easily available in case of an emergency? We do have a savings account but that money is untouchable (due to my DH). If we need to pay for something unexpected then the money comes out of our checking account.

By Reds9298 on Friday, February 8, 2008 - 09:46 pm:

Personally, our emergency savings account is just our regular savings account. That doesn't get touched unless it's a real emergency. Otherwise you can just set up a regular separate savings account for emergencies only. A money market often gives you a better interest rate if you're starting out with a nice chunk to begin with.

We don't make payments on it unless it's interest free. A mechanic bill for instance would be paid in full. If our washer/dryer breaks however, often we will do the 12mth interest-free financing, even having the cash for it. Why not let my own money sit a little longer for zero penalty? That's the way we look at it. I just determine how much I would have to pay over that 12 mths. for example each month to pay it off in full at the end of the period. We would only have one item such as this at a time however. If the washer/dryer breaks one week, then the fridge, stove, and car in the next month, we would pay for those outright.