My take on personal budgeting

[Bobby Goins]

I am new to gnucash, so new, that I cannot get a good install yet.  I am
currently using MS Money 2001 and have used Quicken on an old OS/2
machine many years ago.  I have not been happy with either's budgeting
component.


Anyway, here is my wife's and my take on personal budgeting:


We look at things in both a long-term and short-term view.

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Long-term: 

For instance, Lets assume that we anticipate needing yearly: $1,200 for
property taxes; $1,200 for Christmas presents; $800 for vehicle taxes;
$300 for school supplies; and so on. 


Ideally, we would set aside monthly: $100 for property taxes; $100 for
Christmas presents; $67 for vehicle taxes, $25 for school supplies, an
so on.  However, in my household there are no ideal months.  Some months
are financially tighter than others, so the old 'divide by 12' rule does
not work.  We end up working the actual funding for these items in our
short-term view.  

--------

Short-term: 

This is where we do our true bi-weekly budgeting (which happens to match
up with my pay periods).  

During this 2-week period, we anticipate that we will spend so much on
Groceries, so much on Fuel, so much on Utilities, and so much on
Miscellaneous items.  (Some items are fixed, while others very
greatly.)  From this VERY fuzzy information, we set the budget, with an
eye on long-term items.  

Lets say, however, that the cell phone bill is $50 over the anticipated
amount, or that I received an unanticipated tax refund check from the
Government.  Now, we must decide how to alter the budget to reflect
these changes to the plan.  

Does the shortcoming need to be funded from the long-term items, or do
we eat 'beans and rice' for the next two weeks?  Does the excess need to
fund the long-term items, or can I purchase that 20"+ plasma flat screen
I have my eye on?  This is what I need budgeting software for, not
necessarily to answer the questions raised above, but to play 'what if'
scenarios. 

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Someone mentioned that actual expenditures should be tracked in budgeted
accounts.  I agree, however, it is nice to have a separate "what if"
budget.


I hope this adds to the budgeting discussion.

Bob