The month of April will be the first month that I am using the envelope system. My categories being funded are:
Daycare 200.00
Gasoline 80.00
Groceries 300.00
Tuition 500.00
Savings 40.00
Christmas 120.00 *UPDATED* I upped the funding for this category for the month of April due to Easter and my youngest daughter's birthday being in April. I have decided to change this envelope to include birthdays and other holidays, not just Christmas. Christmas savings are still $60.00 per month. The added $60 to the category is for Easter and her birthday.
Clothing 70.00
Savings and Christmas are really more of a sinking fund than an everyday expense, but I am funded the envelopes and then taking the envelopes to the bank where I hold my savings account for depositing. (Since I get paid in cash, it helps me to sort out where I am depositing which funds. I do not use the same bank for savings as I do for checking. There is a story behind this, which I may explain at a later date.)
The tuition envelope and the Day caren envelope are also just a storing place until I take the funds to the university and the daycare.
The rest of the envelopes are for everyday expenses. I am a bit nervous about using this system. Not because I think the system doesn't work - but because I am nervous that I may try to cheat the system. It is going to take a lot of self-discipline on my part to spend the money exactly the way it has been categorized and to keep myself within the monetary limitations I have placed on myself.
I have tracked my spending patterns for a while now, so I am pretty confident that I have given myself realistic amounts. I will have to be prudent, there is not much room for error, although I will admit I have given myself some wiggle room. It is a process that I may have to tweak for the next few months until I have it down, but we all have to start somewhere.
My goal is to come under budget for all of the everyday expense categories. Every cent I do not spend will be redirected to debt repayment at the end of the month. So, the less I spend, the more I can send towards debt! I can't think of a better motivator!
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good for you! i hope it works :) i've never tried it myself, but i know already all too well i'd never stick with it....i use the "put everything on my credit card" method and then use that as a tracking device. but DEF. not good for everyone...
ReplyDeletebut yeah, good luck! budgeting is a work of progress, so you'll find that you'll be updating it as time goes on.