Your Budgeting Questions—Answered

dw_savings2 A post last week on the "Save-to-Spend" budget sparked numerous questions from readers.

Here, our best answers:

My monthly income is so low I can barely pay the bills. How can I budget to save?
Don't think of the saving part of your budget as a loss (as in: "I don't have the money"); think of it as a gain. When you're broke, squirreling away even the spare change at the bottom of your purse is a plus. Establishing the habit is more important than the amount, for now. Even a few bucks stashed away builds optimism.

I'm a freelancer and my income is erratic. How can I set up a regular budget like this?
Your bills are monthly, even if your income isn't. Start there. What's your monthly total for basic living expenses? Let's say it's $2,000 for housing, utilities, food, etc. Aim to save a percentage of that (e.g. 5% = $100) in each budget category, or aim to save a percentage of each freelance paycheck.

How do you set up savings for four different categories? Do I need four different accounts?
The value of having separate accounts is that you're less likely to abscond with your own money. If you earmark the funds in each account for that purpose, you won't spend the money until that specific need arises.

I live in an area of the country with higher-than-average housing costs. I don't think this budget makes sense.
The save-to-spend system is based on target amounts. If your basic living expenses are more like 65%, adjust accordingly (or scale back).