Tuesday, February 8, 2011

Digital Cash Envelopes

We started getting serious about our budgeting near the end of last year. I started reading Money Saving Mom and then Dave Ramsey, and the rest is history. I don't get into politics or religion on here, but in terms of finance, Dave Ramsey has been awesome. Our budget doesn't completely follow how he suggests - we have it tailored more to our goals and situation.

I've budgeted my entire adult life, but until now I never had a zero based budget. And definitely since my husband and I got married and I started budgeting for both of us, my 'budgeting' was really more record keeping. We weren't going into any debt, but we weren't really saving any money, and definitely not like we are now that we have our strict categories. Yay for saving money!

I have played a lot with tracking each envelope month to month, and currently have a system that really works well for us. Since I get paid monthly and my husband gets paid twice a month, we do our budget monthly. I have a column for expenses, a column for income, and 3 columns for the envelopes: one has the remainder from last month, one has the additional new money for this month, and one shows how much we have total in each 'envelope'.

Every time we spend money, I put the entry into the expenses column, and subtract that from whichever envelope it belongs to. Similarly, every time we bring money in, I put it into the income column, and if it is extra on top of our paychecks, then I add it into the new money column. It works quite well for how I think, and I love how in excel when I make a mistake, I have cells set up to show me that my overall totals don't match, so I can go back and fix my mistakes!

I love how this budgeting system means I am no longer the nagging wife - 'shouldn't we save that money instead of spending it on X'. Now we just have to look at our excel spreadsheet to see if we have money to eat out, or buy clothes when we find a really great deal online. I print the totals about once a month and hang it on our fridge so that even if I'm at work with the most current version of the budget, my husband can look to see approximately what we have in any given 'envelope'.

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