Growing up I was told that it wasn't polite to talk about politics, sex, or money. We're not talking politics or sex today {
you're welcome, Mom}, but we are continuing our chat about money. I realize there are some of you who find this mind-numbingly boring, but I love, love, LOVE reading about the way other people, especially people my age, manage money. It's the financial equivalent of peeking into someone's medicine cabinet.
It's a little {
maybe a lot} scary to be talking about our finances in such detail on here. Money is such a private thing and it's not something I sit around discussing with anyone other than M. But I'm hoping through sharing our experience and our goals that this will provide some accountability and support. I'm such a typical fire sign. I'll make a plan and have goals and get all pumped up for them and then a month later I'm totally off the bandwagon. Maybe the fear of public shaming will help me get back on board when we inevitable fall off.
So. When we left off yesterday, I was talking about how the hard part of all this is turning all of our exciting goals and dreams into plans and actions. The first thing I did was pretty basic: add up how much comes in each month and add up how much goes out. I added up all of the obligatory recurring expenses {
rent, utilities, gas, car payments, student loan payments, car insurance, cell phone bill, etc.} and put them into one category. Minimum monthly credit card payments were added up and put into another category. Then comes the new part: the envelope system.
I vaguely remember my parents using the envelope system at one point in my childhood and I know I've seen other bloggers {
the Duchess of Fork comes to mind} who use it. But it wasn't until I read
Emily's guest post from
Nancy that I thought, "
Hey, we can do that!". And do that we did.
We are half way through our first month of the envelope system. I can already see that I'm going to need to make some adjustments {
I under budgeted for a number of items}, but that's OK. We'll make the necessary changes and try again next month. Most everything I've read says that it takes a few months to really get the hang of it, so perseverance is the name of the game. I have to say, it is REALLY strange to be carrying around so much cash and see the resulting teeny tiny balance in our checking account. It's unsettling, especially because I rarely ever carry cash.
Here are the envelopes we have:
Groceries: pretty self-explanatory. Prior to our budget adjustment, we were spending about $400/month on groceries. I cook pretty much every single night, plus we pack our lunches and eat breakfast at home. We rarely eat out, not because we don't like it, but because the only restaurant options in our town are Arby's, McDonald's, and Denny's. I'm challenging myself to go down to $300/month. I'd love to go even lower, but we're taking baby steps.
Pet Supplies: We have two dogs, one of which is on a special diet and medication due to allergies and anxiety. Right now I've got $100/month budgeted, but that may be able to scale down to $80 or $90. We'll see.
Pet Boarding/Vet: Again, pretty self-explanatory. I've got $100/month budgeted for this. Depending on how much we scale back on our traveling, I may be able to trim this to $70/month, but it adds up quickly. Two nights in the kennel for our two boys is $84. This is a rollover envelope, meaning anything that doesn't get spent in a month just stays in the envelope. The idea being that it builds up a back-up to our emergency savings should anything major happen to one of our boys.
Household: This envelope is for things like toilet paper, dish detergent, hand soap, etc. This is outside of our grocery budget, which is new for me. I budgeted $15/month this month, which was not nearly enough, but that was because we ran out of everything at once. This will be a rollover envelope.
Personal Care: This envelope is for haircuts, highlights, body wash, shampoo, toothpaste, make-up, etc. Right now I've only got $25/month budgeted. Some months that will be more than enough, but some months it won't even come close. This one may need to be adjusted, but we'll see. This will definitely be a rollover envelope.
Fun Money: I'm sticking to the diet philosophy that if you deny yourself any and all treats, you're much more likely to crash and burn. I've budgeted a total of $80/month, or $40/each. This may be a bit too generous, so depending on what adjustments need to be made to the other envelopes, this may go down to as little as $50/month.
Date Night: Not negotiable. I see our de-debting plan not only as an investment in our financial future, but in our marriage. Money is a top cause of divorce and we want to be mindful of that, but I don't want to neglect taking care of our relationship as a means to an end. I'm allotting $40/month, so not much more than a pizza night at home and seeing a movie. But this is an important one that I want to try not to cut back on.
Auto Care: This envelope is outside of the money budgeted for gas for our cars. The idea is for this to build up to pay for routine maintenance like oil changes and inspections, as well as a back-up to our emergency savings should anything more major happen with one of our cars.
Gifts: Pretty self-explanatory. I've budgeted $40/month. Some months we'll spend it all {
it's already forcing me to be extra creative with our gift-giving occasions this summer!}, some months it will rollover to save up for things like our anniversary and Christmas.
OK, so some people refer to their fun money as blow money. But if I had an envelope for blow, I would assume someone was funding a yet-to-be-discovered cocaine habit. Maybe for some people it's one and the same?
So I add up the recurring expenses, the minimum credit card payments, and the envelopes and subtract the total from our income. Everything else goes to paying down debt.
We have a ways to go to really get the hang of this. I can already tell there are going to be times when it really sucks {
i.e. not a lot of built-in $$ for my drive-thru McDonald's Diet Coke habit}, but I can also already tell that it is going to be hugely helpful for us in reaching our goals.
Do any of you use the envelope system or some version of it? As a newbie, I would LOVE any tips/tricks/advice you might have. And if anyone would like to help prettify our envelope system, you are more than welcome to buy
this lovely wallet for me :)
Tomorrow is the last financial post of the week {
I promise}. I'll be posting the different resources that have been helpful so far...
. There was a sneak peek in the latest Martha Stewart Living and it looks wonderful, just like everything she does. 
