I'm guessing that most of you out there who actively maintain a tight budget have heard of Dave Ramsey. If you haven't, you should check him out...his money management tips and advice are phenomenal, and he has some strategies that are very easy to follow. One of those is not a new concept--the cash envelope system. It's so simple, and isn't rocket science--lots of people have followed this system for years before Dave was ever around. For a long time, I was not very good at sticking to a budget. I started this system about a year and a half ago (when we got married), and it makes managing money ridiculously simple as long as you are diligent.
We recently sold my car and are now a one-vehicle family, which has given our month-to-month budget a lot of breathing room. We now have a jump-start on building up the savings towards a house, and additionally it frees up my income to save more per month as well. As a result, I have re-worked our envelope system since our monthly needs have changed with the elimination of one car. Here's my envelopes-hopefully I can inspire one or two people to take a critical look at how their money is being spent!
-Groceries. I used to budget $35 per week for groceries, including household items and toiletries. That may seem really low, but I've really gotten the hang of couponing to get things for free, plus I now know all the most reasonable prices for things, and which stores to get them. I'm upping this amount to $40 per week because we'd like to buy more fresh produce (as opposed to frozen). This means the grocery envelope will have $160 at the beginning of the month, and when it's gone, it's gone!
-Eating out/Date night. This is something we'd like to do more of. We usually only eat out 1 or 2 times per month unless we go out with extended family. I'd personally like to make this 1 time per week, because that means less dishes for me :)
-Clothes. Not sure how this will go yet, because I've never had an envelope for this before. Hopefully it will eliminate the blow of buying new clothes only twice or 3 times a year, and also impulse clearance-rack purchases.
-Gifts. Self-explanatory, plus I will be adding more to this starting in July for Christmas purchases.
-Fun! Movies, music, going out for coffee or ice cream, etc. I also tend to make lots of trips to JoAnn fabrics...so I'm putting those expenses in this category too, since it's a hobby.
-Stock-ups/Deals. This is a much-needed envelope for me. So many times I see a great deal or see something we could really use on super-clearance, but I don't have room in the budget for it. This will allow for these purchases...plus garage sale season is coming up!
-Doctor visits/medicine. To cover our co-pay at unexpected visits/checkups plus any needed medicine. Just last week Rob had a nasty sinus infection that wound up costing $60 between the visit and the prescriptions.
-New camera. Eventually, I'd like to buy a snazzy new camera. I'm just starting to get into photography (lots, LOTS to learn!) and am borrowing a camera from my mom to get my feet wet. Any extra money, including rebates and gift money, goes in here (separate from savings).
So that's a lengthy list, but there it is. I'll keep you posted as far as how it's going--wish me luck!
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