I hear this advice a lot, especially with the Dave Ramsey material. But I confess, on the whole budging advice, I like David Bach's advice better.

I don't give every dollar a name. I find it stressful to do that. So much in life is unexpected. What I do instead is invest in our retirement and the kid's education fund, and make the mortgage payments and all the bills, utilities, property tax, automatically come out of our account the day after pay day (we get paid once a month on the 15th). Then with the rest, I see what are needs are and now much will go towards food, or entertainment, or clothing, or dental work, or prescriptions, or gifts. I find it much easier to do it that way then to decide that in November I'm only going to spend $45 on medical only to find both my kids get sick and need prescriptions that cost more than I budgeted.

When you budget, do you give every dollar a name?

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Yes, I do. I haven't heard it described that way, but yes. I have a standard distribution for each paycheck. It gets distributed in predetermined amounts to everything from retirement to our next car. Yes there is a misc cash portion and I constantly review our priorities to see if money can or should be shifted between categories.

Cathleen

Well I Don't Do A Budget at all -I just Know What Comes in and what has to Go out , and I Hope i Have enough To Cover what Comes Up.

That is the part About Budgeting that I Don't Get.

How Do you stick to it Month after Month??

Say I Have 50.00 Alloted For Dental This Month , and I Need Some more WOrk Done, and My Bill is Actually 150.00 -
do you rob Peter to Pay paul?

I Think that is A Worse Feeling - so I Don't' bother with any of it...

We save for Retirement and Have an EF fund getting Money every Paycheck , Plus We save for Christmas...
But Other than that , there is Just a Certain amount in the Checking account each Month , And if its a Good Month , It stays , If It is a Bad month , We Have to Use it.

I have a budget which accounts for every penny that comes in -- some goes to savings but its paid like a bill every month.

I am new to the whole budget thing, but I have a misc. category which provides for those unexpected expenses. However, if I have $50 in my medical bills category but don't spend any for the month I will transfer the $50 to savings. I don't spend it on something else because next month I might have $100 in medical bills. The $50 is an average of $600 per year divided up monthly.

My main priority right now is to get debt free -- so all extra money will go towards payments on the debt and work for me as far as saving interest paymetns.

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Grace

Wife to Stoney

Mommy of Sarah (8), Hannah (6.5), and John(4.5)

If I allot $50 a month to dental, then I would have done it last month and the month before. So when a dental need arises, hopefully I have accumulated for enough months to cover it. If the charge is more than I have accumulated, then yes, you are robbing Peter to pay Paul, because suddenly your priorities have changed big time. I look to my accumulated balances for something less crucial like eating out or misc. or next year's vacation and move the money form that category into the dental one. Lets face it, if this year turns out worse than expected for medical or dental, then next year's vacation should be drastically downsized, right?

Cathleen