How do you and your SO budget?

Like a construction project. ... plan to go 25% over budget.

Life happens

We just started direct deposit breakdown like this:

Needs 50% post tax income to joint account (mortgage, bills, grocery, etc)
Savings 25% between 401k and joint savings
Wants 25% into individual accounts that we can spend on whatever

Wife built an Excel spreadsheet with all of our bills broken up into first half and second half of the month, and which bills are paid from her LLC. Then we broke down exactly how much money I bring in, how much she needs to supplement and how much we budget for 'play money'. Everything above & beyond goes into savings/retirement. We just revisited our expenses and cut out some of the unnecessary expenses to bolster savings a little more.

We get paid twice a month - both of us on 15th and last day.

We have a spreadsheet that at the top lists our net checks - which is after taxes, insurances, retirement, and savings allocations (we both have our checks split into our checking account and savings account).

Two sets of columns, one for each half of the month.

Next we list out all our "bills" such as mortgage, student loans, utilities, tuition, etc.

What's left is what we have to spend. We budget this roughly into four categories: groceries and home items, entertainment/eating out, fuel/car maintenance, and kids stuff. We then get cash on payday and do envelopes for the entertainment/eating out and kids stuff budget items.

It's probably overly complicated but it works for us. The two areas we get cash are the two areas in our life where we are prone to overspending. We generally don't overspend on car expenses or groceries.

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We have a spreadsheet that at the top lists our net checks - which is after taxes, insurances, retirement, and savings allocations (we both have our checks split into our checking account and savings account).

Two sets of columns, one for each half of the month.

Next we list out all our "bills" such as mortgage, student loans, utilities, tuition, etc.

What's left is what we have to spend.

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This is essentially what we do to this point. I update it weekly in about 5-10 minutes with our expenses for the week that aren't "bills". Then send a text to the wife letting us know how we're doing for the remainder of the month, etc.

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This is how we've always operated as well, but it's starting to make me nervous. I'm concerned we're basically papering over some bad habits, habits that could bite us in the arse if our income ever drops. And by we I mean, specifically, me

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Same here.

We only have 1 credit card and we both monitor it closely. We know how much we can pay off at the end of each month. If we start getting close to that limit, we simply slow spending down till the end of the month.

I've tried spreadsheets and apps and whatnot but we never really keep up with them for more than a month or so.

We also tried the all cash thing for like 3 months.

This method was the simplest and has been the most effective.

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YNAB

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I hadn't heard of this before but I just watched the video on the website and it looks interesting. How long have you been using this and is it a big improvement over any other methods you have used?

I use mint.com to track our spending. From there I have an excel spreadsheet with all expenses. Each expense has the date of withdrawal, withdrawal type (credit card or checking), and estimated cost.

I try to keep the spreadsheet updated a few times a week and project my remaining balance at the end of every month.