When it comes to budgeting money, I think everyone can agree that it is important and we should all do it. When it comes to how much we budget, when we budget, how we keep track of our budget, and basically the how-to of budgeting all together... that's where it gets complicated.
You can find pamphlets, books, magazines, websites and even entire buildings dedicated to help people budget their money smarter, wiser and better. When you start budgeting your money, especially for the first time, you'll realize just how many different opinions there are on the subject. Everyone has their two-cents worth of advice and it is all different. So, you need to start with an open mind and the recognition of the reality that getting a budget that is exactly right for you will take some time, trial and error, and could even take a lot of mistakes before you find just the right fit for you! Please don't give up on trying to budget your money, or keep track of where every penny of it is going; get up and try gain, and again. Eventually you will find the way that works for you and you will be better for it!
When Justin graduated High School, he continued to live with his parents until he went and served a full time mission. When I graduated, I went to Snow college on a theater scholarship and some grants. When I was at there, I would come home frequently to stock up on food I needed and when I did shop, it wasn't very often. We paid for my housing up-front for each semester, and there wasn't much reason for me to budget my money, so I just didn't worry about it. After a year of college, I decided to go on a mission as well. I ended up coming home early because of medical reasons so Justin and I actually ended coming home within a few months of each other. When that happened, we both found jobs, and had friends that owned houses that we rented rooms from. So rent was dirt cheap, and while we both lived within our means, neither of us had a budget or really cared to get one.
So, before we got married, Justin and I sat down and tried to figure out a budget; but because neither of us had ever really tried to do a budget on our own it was difficult. We really didn't know what we were doing. We ended up figuring out how much our monthly bills were, subtracting that from out monthly income and then used the remainder for everything else. That was it. That was our budget. no strategy and no really discipline needed at all. Now, this system might work for you when you are single and just playing around with no real responsibility other than yourself... but we had no idea that wouldn't when we were married,
living on one income because I wasn't able to work. Needless to say, that method didn't work for us at all.
Over the years we tried many different ways to budget our spending. We tried to use
Microsoft spreadsheets, a system that works perfectly for my sister and her husband. But when we finally figured out the budget part, we could
never seem to remember to record everything. So the budgeting was there, but we weren't keeping track of it. I've always been better with paper and pen, so we made a printable budget. We would write down everything we spent money on as soon as we got home that day. That worked much better for us that the spreadsheet, but after a week or two we would start to slack off and we'd forget to write things down. We tried many other ways to budget and something always happened that made the budget fail. Either we didn't record everything, or we didn't pay enough attention to what we paid each month on something to budget out enough to make it work. So we always ended up going back to our first "budgeting system" because it was easy, and low maintenance. Low maintenance being the key words for us. We are very "low maintenance" people. If it isn't at least somewhat simple to do and keep doing, we just end up not doing it. That is just how and who we are.
That in mind, I knew we had to find some way to budget our money that would basically take care of itself. I'd heard of cash only budgeting, but we knew that wouldn't work for us, because we had to do everything on-line. We shopped online for a lot of things because you can just find it online cheaper than locally a lot of the time, plus it's easier! Not to mention the fact that both my husband and I hadn't paid cold hard cash for anything since we were probably 12 years old.
After
I had saved up $1,000 in cash for my husband's birthday, I learned how great it felt to pay for things in cash! Not only did I not have buyers remorse but I felt real sense of accomplishment. That I had saved for that and I saved for that with a purpose! Not only that, I knew exactly where each penny of that went and I didn't even have to write anything down.
I had an epiphany!
WE could use cash only for everything other than online bills! Bills were the only thing that we were allowed to pay for with our bank account or debit cards. Everything from gas for the cars, to entertainment would be paid for in cash.
We quickly found there was a big flaw... neither one of us had any desire to pay for gas with cash especially of the kids were in the car with us. So we just adjusted our card allowance to include fuel. We had originally budgeted out $100 cash to go to our cars each month, but in reality we don't spend that much. So we are actually doing ourselves a favor by keeping that money in the bank.
This is how we do it. Each month we pull out of the bank a specific amount, all in bills. We bring it home and
devide that cash into five different envelopes.
- Grocery & Household Needs
- Diapers
- Clothes
- Entertainment
- Lunch Money for Justin
These envelopes are what we have now, but in the future we may find it necessary to divide that further. Some people who do the cash system have a weekly budget for groceries
(one envelope for each week of the month) and we may have to do that eventually, but for now this works great for us. I also hope to eliminate the lunch money budget, but it is so convenient! Once his lunch money is gone, it is gone and Justin will either have to pack a lunch for work or come home for lunch that day. He only works about 5 minutes away from home, so that will not be bad at all.
Some of the best advantages for this system are:
- It makes us really think twice or even three times if something is worth the cost.
- If we are buying something on-line we have to deposit that cash back into our account first, so we don't have spontaneous unnecessary purchases any more.
- It takes care of itself, very low maintenance and up-keep. We don't have to write things down anymore (we were never really good at that anyway)
- It makes it so much easier to know and remember what we spent money on.
- Safer! Less chance of fraud because we just don't use the cards as much.
This hybrid-system of automatic bill pay and cash only works perfectly for us! there is plenty of room for adjustment when it is needed, but it is easy for us to maintain. Also, it has already helped our savings... we actually have a savings now! It's is just small, but it is more than we've had before. A small cushion to fall back on if we need it for an emergency!
If you want to start a cash system, but have been wary of it before, I strongly encourage you to try it out!
Here is even a link with instructions to make your own
highly-fashionable cash envelopes. Very cute!
A cash system may not work for you in the end, but at least you will know one more way that doesn't work, and you can move on to the next experiment.