Brett and I have always been somewhat responsible with our money.
Neither one of us spends excessively. We transfer a set amount of money into four different savings accounts each week, and every Sunday we give 10% back to God because we believe what He says in Malachi 3:10. I shop the clearance racks and find plenty of treasures at our local thrift stores, and we always use promo codes when purchasing items online. I know it’s not okay to spend $200 at Nordstrom unless it’s an emergency—like a really really REALLY bad day.
To be honest, money has never been an issue in our home and until recently, we didn’t even talk about it that much. The few arguments we’ve had about money in almost five years of marriage have typically consisted of me fighting for vacations that Brett didn’t think were necessary. Let it be known: I will always consider vacations and quality family time as a necessary expense. Always. I would rather switch to store bought hair dye and never get an eyebrow wax again if it meant we could travel someplace beautiful.
As you may recall, last October I quit my full-time job to start my own business of sorts, which will allow me to stay at home with our son—undoubtedly the greatest expense (and greatest blessing!) we’ve ever known. Four months into my new gig and nine weeks away from our due date, money is suddenly an ongoing conversation in this household.
It’s a good thing, actually.
You see, while Brett and I have always been semi responsible with our money, we weren’t really adhering to a strict budget. Our budget was a mutual unspoken agreement—we each silently trusted that the other would not spend excessively or blow our savings at a casino. Some people might cringe at that system (or lack thereof), but for the six years that we’ve had a combined checking account, it’s worked out okay for us. God has blessed us both with jobs that have provided means to keep food on the table, clothes on our backs, and the occasional luxury like a new car or trip to Greece.
However, with my income recently slashed in half and a baby on the way, that system is no longer working for us. It was time to get serious about money, and make a REAL budget. Brett and I sat down one afternoon with a giant blank spreadsheet and started plugging in the numbers. We subtracted all of our monthly bills, expenses, tithes and savings from our combined income and were left with a pretty startling number. Eight dollars to be exact. Once we finished the calculation I turned to Brett and asked excitedly, “What should we spend our leftover money on?” He smiled. Sadly, eight dollars is not enough to pay for cable, and poor Brett still doesn’t have access to the Sharks games.
After coming to the realization that Brett and I are essentially spending exactly what we make each month, we decided to really start paying attention to where we were spending money, and looking for ways to cut back.
Enter: the cash envelope system. My friend Alli and her husband started doing this a while back, and raved about it. The premise is that you take out a set amount of cash each month, divide it into appropriately labeled envelopes (groceries, date nights, gifts, household, etc), and only spend that much. When the money’s gone, it’s gone. You have to wait for next month, put it back, or call and beg for a debit card approval.
We had three reasons for switching to the cash envelope method;
1) It would hold us accountable to our monthly budget for each category.
2) It would help us become more conscious of our spending (wanting something vs. needing something).
3) It would stop the $2 and $3 charges on our debit card, which would in turn, make our bank statements much cleaner and easier to read every month.
March is our first month doing this, and so far, it’s going well. Grocery shopping is more efficient because we only buy exactly what we need for the week. Brett is bringing his lunch two days a week, and eating out three days instead of five. I’ve caught myself putting things back at Target that I don’t necessary need (damn you, $12 clearance shoes).
After two or three months, we will reevaluate and see if we need to make adjustments to any categories. And of course, starting in May we’ll probably need a whole envelope dedicated to diapers. Yikes.
Have you ever tried cash envelopes? Any budgeting advice for a budget newbie?