|
 This survey originally ran in
the 8/14/02 DebtSmart
Email Newsletter.
Do you track your spending by category?
For example, Dining Out, Gas, Entertainment, Utilities, etc.
 |
60%
of respondents said Yes |
|
40%
of respondents said No |
"I only take out a certain amount
for groceries/husband's allowance/extras (entertainment) each pay.
His "allowance" includes his gas."
--Anonymous
"Most of our bills are tracked by
the individual company or expense (i.e. we don't have a utilities
category, but electric, gas, telephone, etc. categories.) I find it
easier to estimate expenses this way."
--Anonymous
"I do in my head. Also, as I
budget, I allot certain amounts for gas, etc. I only vaguely keep up
with it."
--Hannah
"I am starting too in
September!"
--Michelle
"I used to but after I got
married, it got harder to keep track of the receipts - I do know
this is a great help."
--Laura
If yes, how do you do the tracking?
|
25.3%
of respondents said With Software |
|
33.3%
of respondents said With Paper |
|
8%
of respondents said Other |
"Every evening I enter the day's
expenditures into Quicken."
--Jan
"Our budget is written on paper,
but we track actual spending using Quicken."
--Anonymous
"Mostly in my check book
journal. I do a running total on deductible items, medical, church,
charities, books, education... in a notebook. I do have Larry
Burkets software, for managing money. I couldn't get it to balance
because we are in the "red". I haven't tried it in a
while. I suppose I could see if we balance, now."
--Lisa
"My own Excel spreadsheet, I can
control my input better than by using the commercial ones (Quicken,
etc.)."
--Dan
"I don't always have the time to
turn my computer on and record my tracking as it happens. If I don't
plan to be on the computer for at least an hour, I don't even turn
it on. So I track my expenses on paper and later transfer it to MS
Money."
--Tracy
"I keep a "running
balance" in all areas on index cards. This has worked out great
for us because all anyone has to do is look up the category to see
if the money is there...whether it is for a night out, clothes, car
parts, etc...it doesn't matter...the info is available
instantly!"
--Anonymous
"I use a combination of both
software (quicken) for those items that come out of our checkbook
and paper for cash transactions and savings balances."
--Christine
Do you set a specific spending limit by
category?
|
50.6%
of respondents said Yes |
|
45.3%
of respondents said No |
"No, but I have an figure in my
head which I deem to be enough. If I go beyond that I cut back the
best I can, yet I will spend if I want to."
--Mary
"We have limits for categories,
but they're variable from month to month. In other words, our limit
for clothing is $50/month which means we may spend $25 this month
& $75 next month which equals the same $100/month average. As
long as our monthly average isn't rising, then I consider us on
track."
--Amy
"We set aside savings and
investments first, and then are free to spend the rest. So we don't
stress out if we overspend in one category, it just means we have
less to spend in other categories."
--Anonymous
"I should but don't. We are only
one income so I just pay the bills when they come up. I have two
savings acct. that I take car repairs and emergency spending."
--Lisa
"But it is a guideline, not a
hard and fast rule. I think that is part of the problem."
--Julie
"If something happens beyond my
control and we go over the limit in one category, we try to tighten
our belts in some of the other categories so we don't overspend for
the week. It's not always successful, but most of the time it
works."
--Tracy
"I remain flexible and make
adjustments about each quarter. I'm more concerned about remaining
within the overall monthly budget rather than a specific
category."
--Bert
Do you use an envelope system to limit
spending by category?
|
82.6%
of respondents said No |
|
9.3%
of respondents said Yes |
|
2.6%
of respondents said Other |
"Just for special purchases
...(school clothes, kid's birthday money, stash money)"
--Anonymous
"I tried it & didn't like
it. As much as some financial gurus teach against it, our Visa check
card has been a lifesaver for us. We have this nasty habit of
spending cash if we have it. However, we're more hesitant with money
in the bank. I don't know why it works, but it does."
--Amy
"I have heard it and have been
told to do our money this way. I just don't like the idea of running
to the bank to deposit money for each bill. It is not convenient to
go to the bank weekly."
--Lisa
"As long as you're at budget or
below when all categories are added up for the week, you're OK and
shouldn't need an envelope system. Remember to watch your spending
each and every day - then the weeks, months, years, etc., will take
care of themselves."
--Tracy
"I used to and I found this the
most effective way because I saw physically what was and wasn't
available. However, my husband was concerned with that much cash
lying around every month if there were a fire or a burglary. (Plus
certain household members were less trustworthy than others, and one
month half of the rent money was "lost".) Once it is
deposited in a lump sum in my checking account, I'm working on an
"in theory". My average for bills per week are thus,
therefore, theoretically, I should have so much left over. It's much
less accurate."
--Dawn
"I use a combination of an
envelope system and my checkbooks, since I pay some things with cash
and others through the checking accounts."
--Anonymous
What are your top three spending
categories?
|
The
most popular answer was Housing |
|
The
2nd most popular answer was Groceries |
|
The
3rd most popular answer was Utilities |
Do you create reports based on your
spending by month?
|
72%
of respondents said No |
|
22.6%
of respondents said Yes |
"I keep a copy of each spreadsheet
after the month is closed for future reference."
--Amy
"This shows us the areas we need to
be careful of."
--Anonymous
"We spend just about the same
amount every month."
--Anonymous
"Seeing how we do each month, six
months, and annually helps keep us motivated into a new year - it's
much more invigorating than a New Year's resolution! Usually we do
very well. Just watch what you spend daily - the little things
really do add up!!"
--Tracy
"Mostly just electronic for viewing
status. Print outs for additional analysis, but I don't keep them.
All records are electronic and backed up."
--Bert
"Actually, I just graph it in
Excel. But creating a report is very interesting... maybe I'll do
that."
--Anonymous
What do you do if you notice an increase
in spending in one category?
"Determine why the increase
happened. If it is avoidable, cut back spending in that area. If it
is unavoidable, try to cut back spending in other areas."
--Anonymous
"Figure out what we are doing wrong
and try to remedy it."
--Leslie
"Re-evaluate situation to determine
why there is an increase. For example, gasoline costs - price may
have increase dramatically from previous month even though driving
habits are same."
--M
"Re-adjust in another area."
--Jan
"If it's a permanent increase (such
as an increase in insurance premiums), I rework the whole budget to
account for the increase. If it's something temporary such as we
overspent on groceries, I try to either reduce spending in another
category or reduce spending for groceries the next month."
--Anonymous
"Panic!"
--Anonymous
"If I don't see an obvious
reason for it (ie-car expenses increased because of a trip due to a
family emergency) or new clothes because our child decided to grow
overnight without 1st consulting our budget, then I'll sit down with
hubby & we'll figure out why we went over & what to do to
prevent it in the future. If possible, we'll reduce that spending
category for the next month or so until we're back on track with our
monthly average. If we realize that we're consistently going over in
that category, then we analyze whether or not we need to increase
the budget limit in that category. We did this with clothes after
our 2nd was born when our expenses went from $30/month average to
$50/month. With a 3rd, we're going to have to raise that again I
think."
--Amy
"Take my husband's debit card!
:) reduce spending in another category."
--Anonymous
"Immediately find out what the
problem is and take care of it if you're the culprit. If it's
something you have no control over like insurance, then it may be
necessary to cut costs in other areas to balance the budget. The
WORST thing you can do is put it off!"
--Tracy
"I determine why I had the
increase and determine if spending needs to be changed or if an
increase in that category is warranted. If I increase that category
I look for another category/categories to offset the increase.
Almost always the offset category is a discretionary category, but
sometimes it's covered by increased income."
--Bert
"Go into the details of that
category and see if what caused the increase was a one-time occurrence
or whether it is something that will likely repeat again. To
compensate for the overage in one category, I try to cut back on
other categories that can be trimmed."
--Anonymous
"I monitor it for a month or two
to determine if it needs adjusting. After that, I adjust if needed.
Sometimes, just being aware of the over spending cuts down on it and
it is not a recurring problem."
--Anonymous
Do you know if your best friend tracks
their spending?
|
64%
of respondents said No |
|
26.6%
of respondents said Yes |
"Discussing finances is often like
talking religion or politics - it can lead to big problems due to
the differences of opinion. Therefore, I usually don't discuss this
topic with others - not even my closest friends. Some things are
just better left unsaid."
--Tracy
"My husband is my best friend, and
so he must be budgeting ;o) But I do know of 1 other friend who
tracks spending (I think)."
--Anonymous
"They definitely do not!!!"
--Anonymous
How much time each week do you work on tracking your spending and budgeting?
|
46.6%
of respondents said 'Less than an hour' |
|
29.3%
of respondents said '1 to 2 hours' |
|
12%
of respondents said '2 to 3 hours' |
|
4%
of respondents said '3 to 4 hours' |
|
2.6%
of respondents said 'Over 4 hours' |
|
5.3%
of respondents said n/a |
"That may sound like a lot, but I
love to do it! I am an accountant by trade!!"
--Valerie
"I spend a lot of time on this,
but it's worth it to me because I want to be able to stay home with
my new baby, and need to be on top of the budget and paying off
debts."
--Anonymous
"I keep a post-it note in my
checkbook with the next 2 pay-periods and the bills that are due on
those dates. Each pay period I go thru and setup the payments to the
bills and check them off. I know exactly how much leftover money I
have between paycheck and that week's bills for play. I balance out
my checkbook at least 1x a week to ensure I haven't gone over. I
have also had great success with setting up the bill pay system with
my bank. Now 9 of 16 monthly bills are sent automatically (mostly
the credit card debt), another 6 are handled when they come in by
scheduling their pay dates (ie. utilities that fluctuate each month)
and 1 that is hand carried to it's destination (rent). Big time
saver and less worry of late or missed payments."
--Anonymous
"Once you get the budget down
and are familiar with it, it's really amazing what little time it
does take up. Most of the trick is being organized and knowing where
your money is going at all times."
--Tracy
"Once I found and set up a
system that works for us, it became a very easy method to follow,
requiring almost no maintenance."
--Anonymous
Do you find that using your credit cards
helps you track your spending?
|
62.6%
of respondents said No |
|
32%
of respondents said Yes |
"My husband is forced to bring me a
receipt for his purchases. It is easier with credit cards."
--Leslie
"Some break down spending for you,
we don't pay much attention to it though."
--Heather
"I track my spending as it
happens. By the time I get my credit card statement its too
late."
--Anonymous
"I've tried the system of using
credit cards for almost everything that I would spend cash on (gas,
groceries, etc.) and paying them off at the end of the month. This
never worked. I would always find something else to spend our cash
on and then be left with a credit card balance. Now I use cash for
these expenses, and this works much better for us."
--Anonymous
"Don't use cc's--that's how we
got into this mess of debt!!"
--Anonymous
"Credit card or cash makes no
difference."
--Anonymous
"We pay our balances off when we
get the bills."
--Anonymous
"Credit cards are evil. Evil I
tell you. They help me spend more."
--Julie
"I keep track of my spending
anyway regardless of the method of payment used, so this doesn't
matter in my case. Keeping track of spending should be automatic;
you should not depend on credit card statements to do what you
should be doing on an every-day basis."
--Tracy
"I try to use my credit card as
much as possible and pay it off each month."
--Bert
"I try not to use my cards as I
am working to pay them off. If I have to put something on one, when
I make a payment, I try to pay that amount, plus the financing
amount, plus the amount allocated to pay off the card. For one card
it is $100.00/month (lowest interest rate) and $300.00 on the higher
rate card."
--Dawn
"I have one card for gas only
and one card for internet purchases."
--Christine
Do you find that using your credit cards
helps keep you in line with your budget goals?
|
73.3%
of respondents said No |
|
21.3%
of respondents said Yes |
"We don't use the cards as
credit charges but as charge cards."
--Leslie
"It's far too easy to over-spend
in any one month when using a credit card; then when the bill
arrives, you've gone over budget, sometimes by a lot."
--Anonymous
"I use my credit card as little
as possible. I use my debit card more frequently. It keeps me in
line with my budget goals because if the money isn't in my account I
can't spend it."
--Anonymous
"Makes it worse!"
--Anonymous
"I still have one card I use for
"emergencies" but it seems like it gets used for a lot of
extras or just when things are tight. If I could wean us off the
credit card, I think our budget would be in much better shape."
--Anonymous
"CC's allowed us to OVER
spend-lived above our means, spent money like we had it, and got
tricked (tricked ourselves; I don't/can't blame the CC companies. I
spent the money) into this life of minimum payments that will never
pay off the actual balance"
--Anonymous
"I find I buy things that I
wouldn't ordinarily buy."
--Anonymous
"My goals are planned out in
advance regardless of the method of payment used. When I use my
credit cards I always pay them off when the statement arrives
anyway, so they might as well be a cash transaction which is what
I've always considered them as."
--Tracy
"I can see what I'm spending
written out on paper. If I spend too much one month, I scale back
the next month."
--Anonymous
"No, I spend too much with a
credit card! Mine are in a water filled bag in the freezer!"
--Michelle
"Only use credit card on big
ticket items that we need and do not have the cash for at the time.
Pay off as soon as possible."
--Kathy
"It takes a lot more
determination and discipline!"
--Anonymous
Did you specifically teach your children
how to create a budget, track spending, and handle their finances?
|
22.6%
of respondents said 'Kids Too Young' |
|
22.6%
of respondents said 'No Kids' |
|
18.6%
of respondents said No |
|
22.6%
of respondents said Yes |
"We are working on that now. They
get an allowance (no strings) and must divide it into three
categories: long savings (bank), short savings (jar) and spending
(wallet)."
--Heather
"Right now, our oldest is 3 1/2.
However, she gets $1/week that we take to the bank. 50% of it gets
put into her savings account. 10% goes to tithe at our church. The
other 40% goes into her piggy bank. With higher dollar amounts we
put 10% to tithe then the rest in savings. She does this transaction
herself every week. She may not understand it yet, but is hopefully
developing a habit that will stick. If she's with me when we go to
the store, she always pays for at least 1 item herself with
"her" money (we give it to her at checkout). The item we
give her is something that she or her siblings will use or a food
item like milk that we'll all use. I don't think they're ever too
young to start learning."
--Amy
"My son watches me on the PC,
and I've explained what I'm doing. He helped me keep track of our
reduction in Credit Card debt. (It's now zero.)"
--Dan
"Tried, but they didn't want to
listen and insisted on doing things their own way. When kids get to
that point, then they are not teachable. To make a long story short,
my kids are learning things on their own now down the road of hard
knocks."
--Tracy
"We make them use their
allowance and gift money to pay for toys, candy and other expenses
that we consider to be whim desires. Their toys are now more
expensive and can require months of saving. We don't have them doing
budgets yet because they're too young and all spending at this point
is totally discretionary. They put 25% of allowance into savings
(bank account and mutual funds), 25% toward big toy savings and 50%
for mad money (the small toy or candy they beg for when shopping).
They have learned to restrict mad money spending to use toward big
toy savings."
--Bert
"We taught them how to do chores
and save for what they want. They watched us save the cash for a
week vacation this summer. They are responsible for depositing all
our change/refund/recycling $ in an account every few weeks that is
being saved for a Disney trip. I did not learn any of this as a kid
and am paying off 10,000 in credit card debt from the past. I am
trying to teach my kids better!"
--Michelle
"Even though my child is only 7
weeks, we have already decided how to teach him about spending,
budgeting and we are trying to be the best examples we can be to him
so he will learn from us."
--Anonymous
"My older children did not
benefit from the knowledge I have gained in this area, and they
aren't very receptive (at least for now) to me trying to teach them
now. My younger child is too young to start her yet....but I sure
intend to!"
--Anonymous
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--End--
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