In these past couple months, a budget is something that E and have have been talking about.
E starts graduate school in one month (so proud of him) and we've been thinking about what it will be like to welcome another person into our family.
With those two plans/changes, E and I decided that we needed to get serious about our budget. Since February, E and I have been operating on an envelope budget system.
You can read more about it here.
The primary principle behind the envelope system is CASH HURTS.
It's much easier to swipe the plastic, than to shell out the dollar bills.
It's so true.
With the envelope system, E and I have committed to spending only cold hard cash. To clarify, bills and tithing are automatically taken out of our checking account ... so I'm not talking about that type of spending. I'm talking about any money we would spend at a store or restaurant.
We chose to simplify and divide our envelopes up into these categories..
1. Daily Needs (for things like cleaning supplies, shampoo, medical co-pays, ect.)
2. Eating Out
4. Gifts (this is for things like bday or wedding gifts ... not tithing)
6. Joy (my favorite. this is E and I's spending money. we can individually spend it on whatever we want and the neither of us can say anything about it)
At the beginning (the 1st) and halfway through the month (the 15th) I fill the envelopes up with cash. Then, for the rest of the month we only use the money in those envelopes.
I will say that we decided to have a "bank" envelope as well. This is only for the convience factor. We don't spend any of the money out of the bank envelope, it's only for making change.
You might ask ... "what happens if you forget an envelope at home?"
Well, that's where the bank envelope comes in place. If I run to the grocery and spend $10.00, but don't have my "grocery" envelope on me, then I will put it on our debit card. However, as soon as I get home I take $10.00 out of the grocery envelope and put it into the bank envelope. For me, I have to do this as soon as I get home or I will forget.
One other thing that I love about the envelope system is that it causes me to have to plan out my spending. I find that I spend less when I do this. Planning out our spending also helps cut down on the "oops I forgot our envelope, I guess we'll just use plastic" mindset.
So, there it is ... our budgeting mindset. If you're having trouble saving or spending too much, then I would suggest that you go to cash. It has truly helped us spend less, and most of all, become better stewards of the money that God has trusted us with.