The 14 best money management tips from real people's budgets

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Thomas Gilmore

Thomas Gilmore, a 26-year-old living in Tennessee, budgets five years in advance.

Over the last few months, over a dozen readers from across the US have been generous enough to share their budgets with Business Insider.

From a 25-year-old with impressive financial management skills to a would-be retiree trying to figure out if he can afford to take the plunge , they all have something to teach the rest of us.

Here are some of the highlights.

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Don't sweat the dollars and cents.

Don't sweat the dollars and cents.

It doesn't matter exactly how much you spend, just how it relates to the amount you planned. Clarence Reed, a 57-year-old from Atlanta, Georgia, highlights any cell in his Excel spreadsheet that shows he's spent less than 75% or more than 125% of what he planned.

And if a few categories seem a little out of whack in a month, he doesn't drive himself crazy about it.

"I love to travel," he tells Business Insider. "I spend what I consider a reasonably high amount of money, but as long as the yearly number is within the realm, I'm perfectly OK. Boating is another bigger one: I do not care about it."

See Reed's budget.

Keep your budget in perspective.

Keep your budget in perspective.

Brett Schock, a 32-year-old father from Fort Worth, Texas, has two budgets: His real one, based on his actual income and spending, and his "happy budget," or how much he and his wife estimate they'd need to live a life that makes them happy.

In fact, the Schocks have started earning enough money — $142,000 a year before taxes — that their happy budget is more reality than dream.

"The 'happy budget' is more of a self-realization thing, because I've seen too many people who work themselves really hard for that little bit of extra money, and I don't know if it's worth it," Schock explains. "Right now things are pretty good — we feel like we've kind of made it."

See the Schocks' budget.

Start planning for retirement as soon as you can.

Start planning for retirement as soon as you can.

Ron Zahn explains that he and his wife Joan have been investing for retirement from "day one."

"In 1962, we started investing $25 a month into a mutual fund," he remembers. "Those investments, over time, allowed us to have resources in retirement, and I committed to not extracting more money than the required minimum distribution each month."

In retirement, the Zahns live comfortably on a little over $4,000 a month, and don't touch the bulk of their retirement savings.

See the Zahns' budget.

Prioritize your spending and savings according to what matters most.

Prioritize your spending and savings according to what matters most.

Jace and Stacey Davidson (not their actual last name) tithe 10% of their $150,000 gross income to their church before allocating money for anything else.

"I really hold to the principle of, I'm a Christian, so I pay a tithe first, and then myself second," Jace says. "My wife and I both grew up that way, and we believe in giving and being generous. We believe that we tithe on our money and we'll be plentiful and have what we need."

Once they've given the money to their church, they turn to their monthly costs and savings goals. "My wife and I have a thermometer in our bedroom which has the savings goal for the year and has pictures and things of what we want in the future, both for our family and what I want to do philanthropy," Jace says.

See the Davidsons' budget.

Anticipate major costs coming your way.

Anticipate major costs coming your way.

Thomas Gilmore finds the most effective budgeting strategy is looking ahead, whether that's a few months, or a few years.

"I look at, am I going to be underwater any time in the next year? Are there going to be any negative numbers for net income after savings?" he says. "If so, I have to go ahead and start cutting back on my spending or realigning my savings."

In fact, he looks ahead all the way through 2020, taking into account expected pay raises and fix costs, like his mortgage.

"I know I'm going to get at least a 3% raise every year, so I go ahead and put that out there," he says. "That way it's a more realistic number when I look at 2020. It's hard to predict more than five years out." He projects by five years, he continues, because "you're supposed to have your five-year goals — financial, personal, and professional."

See Gilmore's budget.

You can find room for the things you love in even the tightest budget.

You can find room for the things you love in even the tightest budget.

Dottie and Clary Barrett are retirees who live on about $31,000 a year in Portland, Oregon, partially supporting one of their adult sons.

Their only income is from Social Security, and they are both enrolled in Medicare. They are paying off nearly $6,600 of credit card debt from previous medical expenses and expect to finish paying within three years.

"It's very possible to live on not a lot of money if you write it all down and figure out what you really need," Barrett says. "We have a savings program and we're paying off our credit cards, and we're still out doing a few things with our kids. You can actually do it."

See the Barretts' budget.

If you earn commission, budget for your take-home salary only and save the rest.

If you earn commission, budget for your take-home salary only and save the rest.

Brian Maida earns commission working in business development in New Jersey.

However, he budgets according to take-home pay from his base salary, plus paycheck withdrawals like medical insurance but excluding taxes. He chooses to list out the withdrawals in case he ever becomes a contractor in the future.

"I don't even put commission on here, because in my role, I could make $100,000 one year and $200,000 the next," he explains. "All the commission is extra money I'd save."

See Maida's budget.

Budget today for the lifestyle you want tomorrow.

Budget today for the lifestyle you want tomorrow.

Tim Jacobs (not his actual name) and his wife closely monitor their costs, with the aim of saving half their income.

In fact, when taking into account their company stock, retirement accounts, and other investments, they manage to save about 67% of their income. "I want to be able to retire at 45 with $5 million in the bank," he says.

"The budget matches the lifestyle, which ultimately matches what my wife and I dream of: to retire early and travel," Jacobs says. "If you understand the full picture, the budget makes a lot of sense. It's not just what's your end-of-year goal, but what about five, 10, or 15 years?"

See Jacobs' budget.

Leave some wiggle room for the everyday expenses that pop up.

Leave some wiggle room for the everyday expenses that pop up.

Adam and Emily Munoz use the envelope system of budgeting — that is, they divide up cash into physical envelopes for each category of their budget, including one labeled "unexpected."

The "unexpected" envelope helps them cover surprise expenses, like the new dishwasher they paid for in cash, dog food, or costs for out-of-state trips.

"Every day when I get home, I ask my wife if she spent anything on the card that an envelope was not designed for," Adam says. "It literally takes less than five minutes to bring up the document, enter, for example, how much money she spent on gas and if I spent anything, close it, and feel confident I know where my money is going."

See the Munozs' budget.

Recognize that something could go wrong — and plan for it.

Recognize that something could go wrong — and plan for it.

James Colvin, who earns a net $3,500 each month, has eight months' worth of expenses saved in an emergency fund.

"Sometimes on budgets, people don't take into account things that could happen to them," Colvin says. "In order to be able to make the unknowns as minimal as possible, I try to accommodate for all the unknowns. I can't predict an emergency, but I can prepare to my best ability. My budget is an insurance policy on myself."

See Colvin's budget.

Save a little at a time for big bills.

Save a little at a time for big bills.

Brian McManus, a married father of three, uses a strategy he calls "save spending" to keep occasional expenses from taking an outsized bite out of his paycheck.

For regular but not monthly costs like car care, holidays, and vacations, he puts away a little money every month so when the bill comes through, all he has to do is use the money he already collected.

"It makes me confident that we can plan for things," he says.

See the McManuses' budget.

Shell out for health insurance, no matter what.

Shell out for health insurance, no matter what.

In September 2013, Chris Collins purchased health insurance. "I knew it was the right thing to do, and I just made the decision to do it," he says. "If you don't have health insurance, you are one diagnosis away from financial ruin."

Three months later, he was diagnosed with thyroid cancer. Amidst extreme healthcare costs, he upgraded his policy.

Collins' treatments were successful and today he is free of cancer, and free of medical debt — his new insurance policy was able to eliminate nearly all of that $130,000.

See Collins' budget.

Max out retirement savings as much as possible.

Max out retirement savings as much as possible.

John Steinert, who is only 25, dreams of being able to retire early. Every month, he contributes to investment accounts.

That money goes to low-cost Vanguard index funds and is earmarked for retirement, although Steinert also has a 401(k), a pension, and a Roth IRA he started funding in March.

The point of the account, he says, is to provide retirement income that can be withdrawn free of penalty should he be able to retire before age 60.

"Even though I'm using after-tax funds in the account and I'll have to pay taxes on the capital gains and dividends — so I'm taxed twice — I have the option to withdraw it early," he says. "If I could have financial freedom at 45, I wouldn't want to touch the accounts."

See Steinert's budget.

Steer clear of impulse purchases.

Steer clear of impulse purchases.

LaTisha Styles paid off her $22,000 of credit-card debt and $10,000 auto loan.

"During my debt-payoff journey, I learned to separate needs from wants, and I realized that much of my overspending was from impulse shopping," Styles explains.

Too keep herself from spending more than she anticipated, Styles instituted one rule. "If I planned to purchase the item, then I can purchase it. If I am at a store and I want to buy an item that was not on the list or planned, then I have to plan a day to come back and get it. It really helps me to prevent those splurge shopping trips!"

See Styles' budget.

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