David and I have been trying to come up with a way in which to keep track of our finances better. We’ve always set a budget but have never been all that strict about it. I think it was more so we knew what we could/couldn’t afford, but often we’d ask ourselves, “where did all the money go?” We’re both at fault for different things when it comes to money, but the bottom line is we needed a way to keep track and to help us stick to our budget. We don’t have credit card debt, we don’t owe anything on our van. The only debt we have is our school loan and house payment. It’s not that big of a deal, but still we have felt for about 2 years now we could be doing a better job being better stewards of our money. We’ve heard a lot about the envelope system and thought we’d give it a go. Here’s how we do the envelope system (made quite popular by Dave Ramsey).
We have a small accordion file (size of an envelope). I have labeled each spot with various things we are using cash only to pay–groceries, eating out, gas for the car, entertainment, the dog, miscellaneous, etc. We have figured out exactly how much cash we need taken out of David’s paycheck the 1st of the month and what bills to pay with that check. We then have it figured out what bills to pay with his 2nd check of the month. We spent a lot of time getting this figured out, by the way…We are into our 2nd month of doing things this way, and it is GREAT! We are seeing where we spend too much money and where we have excess. We have never been too sure if we were budgeting correctly for groceries and are happy to see we’re over-budgeting there! We have enough left over each month to put into savings (which we’re building up to pay off our school loan in big chunks). We feel so much better about all of this, and we know for certain where every penny is going, or not going.
If you don’t have a system set up, and you find yourself scratching your head each month as to where your money is going, might I suggest the envelope system? We pay EVERYTHING (except our utilities, tithe and house payment) with cash. We DO NOT buy something if we don’t have the cash. Yes, it’s been annoying at times and yes, we’ve had to think through our errand-running a bit more to make sure we have the cash we need (like for eating out), but it has been so worth it. At the end of the month we’re excited to see what we didn’t spend, and it’s so relieving to see that God IS, in fact, providing for us richly, we just had to be better about keeping track of it all! If you find the envelope system doesn’t work for you, that’s fine, but I encourage you to find something that will work. Life is too short to be worrying about money!