Tuesday, August 23, 2011

Cash Only Budget

Eric and I have tried various different ways of budgeting and paying the bills over our almost 10 years of marriage. Some worked out pretty well, others not so much. We have learned a lot about each other during this process but it has also made us stronger as a couple as we work together to reach an end goal. Often times money can be such a difficult topic for couples and even though I admit there have been times where a conversation or two has become more heated than I'd like but in general I am blessed to have a husband who really is a partner in this with me.

So recently I wanted to try to revamp our system once again. Our current one had been working for about 3 years, but I wanted to find one to allow us to save more aggressively while still having money for other things. I started reading away on different types of systems and got stuck on the cash budget idea. Eric had reservations because in the past we have lost/misplaced or had cash just full on disappear (I'm talking hundreds of dollars) but the overall system seemed appealing so he agreed.

I first came across this idea on Money Saving Mom and this is her post about how to get started. I looked at various blogger's sites who have also started on this adventure to get an idea on how they worked it out. You can read some of the sites I found info about it here, and here.

Eric and I spent one night going over all the categories we could think of that we wanted to include in our budget. This is what we came up with.

  • Food
  • Date Night
  • Gas
  • Family Fun/Eating Out
  • Diapers
  • GNO (girls and/or guys nights)
  • Home
  • Gifts/Birthdays
  • Clothes: $/per person
  • Vacation
And like the theories suggest we will continue to pay our monthly bills like phone and gas and water etc with our checking account. I have our monthly bills charted out to where I know about how much they will be monthly. Obviously it changes a little but I tend to round up on the ones that do fluctuate so when it is a higher month I have it covered. And, if it is a lower month for monthly bills but I have it budgeted for higher months I leave the extra in that account because it never fails that some bill will pop up that I wasn't expecting. We call that checking account our bills account (original right) and transfer all other money out of that account to not confuse how much will be coming out that month for bills.

Our second checking account is our family account where all other money use to go, but now with this cash budget I think I will only leave $100 in there for emergencies. Then we have our long-term never ever ever touch it savings account and then a regular savings account where we save money to help where needed or for special things or whatever.

And the rest goes into the envelopes. I debated how I actually wanted to do the envelopes. I am slowly sewing a wallet insert with cloth envelopes with magnetic closures, but like I said, that is happening very very slowly. I didn't like doing just plain white envelopes, because lets face it, those are no fun. But then I found this post online on a DYI envelope system. LOVE IT!

So we are going to start on Sept. 1st with the guidelines we have set up. I am assuming there will be a little adjusting as we go, but hopefully it works out. I'll keep you updated on the status. So now I have to keep working on the cute new envelopes before the end of the month.

What system works for you and your family?

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