Thursday, December 20, 2012

My Budget Envelope System


photo by boxchainvia PhotoRee

I promise that you WILL want to save this post after you read it.  I have always thought I would be okay with money but what I lack is a routine, self-control, rules, discipline, and proper guidance.  I think I have all of these things but I don’t.  I recently learned a lot from Dave Ramsey and his books. 

I have started an envelope system that I’ve been using over the past few months.  I take my necessities, which are things that I spend money on each month, or every couple of months.  Yours may be different but mine are this: Groceries, Doctor copays and prescriptions, Vet, Dogs (food and pee pads), fun, restaurants, Car, Clothing, Gifts, Misc. 

I went to my budget and I figured out what I take home each month, then I took out all of my bills.  Then with the money I had left I decided how to divide it up each paycheck among the categories listed above.  To do this, you may need to look at your  bank statements and see how much of your money goes to each of your categories.  

Then, I went to Wal-Mart and found a coupon organizer (those little mini plastic expanding envelopes) and I purchased one for $0.97.  I labeled each pocket in it with a different category.  Then, I figured out for the upcoming paycheck (your amounts will vary each month depending on bills), how much money to take out in cash on payday and put in each envelope.  Then once I spend those amounts in that 2 week pay period, I can’t spend anymore and I can’t take from other envelopes.  After about a month of doing this, I quickly learned to be more careful of how much I spend.  Sure I thought $75 a week on groceries was a must but when you have to go through the store and you put items in your cart, you stop and say, WELLLLL I could save the $3 that I would spend on this for something better because this really isn’t worth it.  It hurts way more to spend cash than it does to swipe your card and scientific experiments have proven that.

I also track where my money goes and I save my receipts.  I enter all of them into an excel spreadsheet I made and if I leftover money in each category I decide whether I should roll it into a different category, save it in that envelope to build up over time, or put it towards my debt or in my savings.

So far, this has proven to be a great disciplinary budget system for me.  Try it and see what you think!! And if you have any questions along the way PLEASE let me know!

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