Is there any extra!

iVillage Member
Registered: 11-14-2008
Is there any extra!
11
Tue, 03-30-2010 - 1:38pm

I often wonder about this, and I was just reading an article that leads me ask(because I'm curious), what do you count as extra, and how do you define savings?

Let me elaborate. Most of us have budgets or are doing are best to create or tweak one. The basic concept being how much income there is coming in a month and what expenses are going out. If you are red at the end of the month you have more going out than coming in, if you are black it is the opposite. Now, some people set up their budgets to come out to zero. But I think those people too have extra. They just create another category they put the extra into called savings or snow flaking or what have you. This is the way it should be in my opinion but it begs the question(Sarah or maybe not so much now that you are catching up, can you fill me in or others) as to what a family/person does that has a deficit every month? If you did have this happen when you woke up one day and decided to pay down debt, how long did it take to make it balance?

Also, how do you ladies/gents define savings. I have a ticker at the bottom of my sig that is savings for kid's education. However, I really don't consider true savings because I plan on giving it away at some point. I have $500 in a retirement account, the equity in my business, and land that I consider savings because it will not be touched for years/decades to come. I am also trying to teach my kids the different levels of savings as in money you keep in savings and money you save for a short term goal like a video game that you don't get all in one allowance. How do you define savings in your heads?







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iVillage Member
Registered: 08-24-2007
Tue, 03-30-2010 - 2:04pm

Hi Karen,


As a peson who worked in deficits for years, I can tell you that basically a deficit in a budget = debt.

Kate


empty purse

iVillage Member
Registered: 10-01-2008
Tue, 03-30-2010 - 3:07pm

Since filing chapter 13 bankruptcy in February 2009, we know operate in the black.

Norma


"Patience is the best remedy for every trouble"- Plautus


iVillage Member
Registered: 08-04-2008
Tue, 03-30-2010 - 3:30pm

I guess we are a mess at the moment, but I used to keep really good totals.




iVillage Member
Registered: 02-17-2010
Tue, 03-30-2010 - 5:00pm

Right now we are still trying to figure out the $0 budget. I want one, I need one, but I can't seem to get one to work. The thing that goofs us up is that during the winter months DH works day shift and shorter hours. Then spring through fall he works second shift, 60 hours/week and usually gets extra rate work that can double or triple his hourly wage depending on where the job site is. So all summer we have to save enough to cover the deficit in the winter. It seems easy it really does but the problem is some weeks in the summer he only works maybe 40 hours with no rate work and then we again have to cover the deficit. On paper our budget covers exactly what he makes in the winter months. In reality, I have no effen clue some weeks. Most months in the summer

 

 

iVillage Member
Registered: 01-20-2010
Tue, 03-30-2010 - 7:00pm

stephanie- i posted my budget a while back and it was really helpful to figure everything out. it might help you to post real numbers and get some feedback since it sounds complicated and hard to work through on your own. we'd be happy to help if you want.

anyway- that was OT.

we are in debt because we operated in the red. we didn't have a budget and just spent, spent, spent and then spent some more with a credit card. we would go for long stretches where we could cover what was spent in a month and then few months that we couldn't and it snowballed. in some ways getting out of debt is more like pushing my giant snowball back up the hill it rolled down, LOL.

when we started our budget it became clear why we were in debt. we had too many obligations and not enough income. we had to make some changes to be able to operate enough in the black to pay off the debt. ie- with our monthly expenses (no blow money) we were at a 0 budget. we had to cut back enough to free up some blow money and some snowflake money.

i consider savings to be anything set aside for a specific purpose. like you said, there are levels of savings. right now we are saving for: kids college, retirement, emergencies, sinking funds (vet, medical, christmas, etc). once we are debt free we will begin saving more for emergencies. then we will add to that savings a down payment savings and a new car savings and increase our retirement and college fund contributions. but i consider them all to be 'savings' since i have to go out of my way to access that money and it's been earmarked for something outside of my monthly budget items. i don't know if that made any sense, it's been a long day and i am a little tired, but there you have it.

:)

andi

ps- is it just me or does calling it blow money make us all sound like drug addicts?? totally OT and random, but like i said, it's been a long day.

iVillage Member
Registered: 08-24-2007
Tue, 03-30-2010 - 9:44pm

"ps- is it just me or does calling it blow money make us all sound like drug addicts?? totally OT and random, but like i said, it's been a long day."


LOL ... andi, I've thought that a few time too!


I think one of the reasons I don't include some of my savings (like the sinking funds or savings for specific items) is because the balances fluctuate.

Kate


empty purse

iVillage Member
Registered: 04-10-2003
Wed, 03-31-2010 - 7:41am

I work to


Bex -

iVillage Member
Registered: 10-01-2008
Wed, 03-31-2010 - 9:07am

ps- is it just me or does calling it blow money make us all sound like drug addicts?? totally OT and random, but like i said, it's been a long day.


LOL, I call our blow money, "Stash" - that's just as bad..........LOL, LOL, LOL..

Norma


"Patience is the best remedy for every trouble"- Plautus



Norma


"Patience is the best remedy for every trouble"- Plautus


iVillage Member
Registered: 03-27-2005
Wed, 03-31-2010 - 9:08am

I often wonder about this, and I was just reading an article that leads me ask(because I'm curious), what do you count as extra, and how do you define savings?


Great question.


iVillage Member
Registered: 11-14-2008
Wed, 03-31-2010 - 1:41pm

This is the way it should be in my opinion but it begs the question(Sarah or maybe not so much now that you are catching up, can you fill me in or others) as to what a family/person does that has a deficit every month? If you did have this happen when you woke up one day and decided to pay down debt, how long did it take to make it balance?

I'm not following the question. With a zero based budget, unless there was a sudden job loss there would be no deficit.

***Stacy, this is the case for some people and why they are in red and in debt. They have too many expenses for their income. They must re-adjust by either making more income or cutting expenses. So I wanted to know what their experience is. When they realized what a budget was, and why it did not come out to zero, what did they change to start paying off debt and get back on track and how long did it take.

I am curious to know why you don't call retirement funds savings? I assume most would. Is building wealth a portion you would not give away at some point as well either when you die or to a charity while alive?







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