Our friends Jenna and Patrick became Dave Ramsey converts earlier this year, so I zipped over to his website to check it out. I listened to his podcasts for a week and decided that personally I'm not his biggest fan, but financially he's a smart cookie.
I started tracking our spending in November so that we could have a reasonable budget to work off of in January. We've budgeted every penny of our salaries into categories, including savings. We pay our bills, gasoline (I just can't get excited about having to go inside the gas station to pay) mortgage, etc directly or with a credit card - which gets paid off monthly- but the rest of our spending we've put into 9 envelopes:
Groceries, Eating Out, Casco, Clothing, Personal, House Repair/Furnishings Fund, Car Maintenance Fund, Vacation Fund, and Gifts (including Christmas).
When the money in those envelopes is gone, so is our spending in that category for the month. Surpluses or unspent money roll over to the next month. We each get a weekly "allowance" to spend or save however we want - lunches out, coffee, accessories, etc. It's only the beginning of January, but so far B and I are both excited about the system. I'll report back later this month!
What about you? Is budget a four letter word, or are you excited to try new things and see how much you can save? I'd love to hear about your ideas!
We started using a budget in June and I'm so glad we did. Now that I have been layed off, we aren't hurting because of our previous budgeting. It makes a world of difference.
ReplyDeleteGood for you! I've heard about Dave Ramsey before but haven't really done much research on him. Maybe I should look into it a little more.
ReplyDeleteI live for my budget. Seriously. I'm obsessed with it. I'm constantly tweaking it and entering things. I love it! We don't do the envelope system, exactly, but we always pay ourselves first (savings is our number one priority!) and we have a set amount of spending money that we just simply don't go over. I really don't understand how anyone lives without a budget because nearly every single spending decision we make involves checking the budget. :)
ReplyDeletethe envelope system sounds awesome. we use the wells fargo budgeting system which has worked out really well for us bc then we can track everything. the only thing i don't like abt cash is sometimes i can't remember where i spent it!
ReplyDeleteyes - the Dave Ramsey system is really effective...I know several people that are doing it or have done it in the past. And that is actually how I paid off my pesky school loans while still in school...so good for you girl! It can be frustrating especially if you find an absolutely great deal on things when the envelope is empty though. Make sure you let us know how it goes!
ReplyDeleteWe have a similar system, but I prefer to view our budget categories as envelopes and use our debit card instead of using cash. It makes me nervous to have that much cash out and around the house. We've listened to Dave Ramsey a good bit, and we have his book. He definitely has some good tips.
ReplyDeleteWe also do an "allowance". It helps keep going to Starbucks and out for lunch during the work week in check
We also subscribe to DR's methodology! Sounds like you not only have a plan, it's solidly in action!
ReplyDeleteGlad this is working for you! My parents have been using several of his principles and its been working well for them. My mom lent us his book on CD. I thought the first CD was boring and never finished listening! We do budget, but we don't follow anything strictly. I know the envelope system really works for a lot of people, so I might have to break those CDs back out!
ReplyDeleteWe don't do the envelope system, per se, but we do get "allowances" (personal spending $) in cash. So when it's gone, it's gone, which is sometimes really frustrating for me!
ReplyDeleteBut going to the ATM on Friday mornings is so exciting now!
DH absolutely hates having an "official" budget. And he does worse following it when we have the "official" budget than if he's just spending on his own.
ReplyDeleteHowever, he's always pestering me to use cash again to build up our change fund, so maybe he'd go for this.
We love our budget, I was hesitant at first until I realized I had more money for clothes...haha.
ReplyDeleteHave you seen http://www.mvelopes.com/ it's an electronic version of the envelope system. Just thought I'd throw it out there for people to look at. I was in a discussion with Emily over the weekend about what to do when you weren't close to the physical envelope and needed some cash. Maybe this app will help out.
ReplyDeletedave ramsey's my boyfriend, but i'll share him ;)
ReplyDeletedebt is normal, don't be normal!
good luck!