by Adam Dawson
Well, we tried the new budgeting method for the first week of August. I would say the results are mixed but looking up.
To recap, we budgeted for all of our bills to be paid directly from our account. For day-to-day spending, we set aside a grocery budget, and everything else – entertainment, clothes, cosmetics, and home supplies, comes from our weekly spending allowance, that we withdraw in cash and split evenly between us.
Using cash has been great for me – I actually feel the pain of spending money. I was glad to have the flexibility to get lunches out a couple times at work when my schedule was tight. But I definitely noticed myself looking for cheaper options and seeking out the free oranges and bananas my employer sets out sometimes. Toward the end of the week, one of us (name withheld to protect the guilty) pulled out the debit card a few times. The result is that our spending money will be adjusted for the next few weeks to cover the extra card spending.
The grocery budget for the week got really blown, but I think we ended up buying some staples that we will need to cook more and eat at home more. So I expect the grocery budget to moderate in coming weeks since we don’t have to buy those things again.
Some of you commented previously that paying for household goods like toilet paper etc. out of someone’s spending money may not work that well. This may end up being true but so far it’s been ok. I think we will end up covering some of this from the grocery budget, and if we do a Walmart or Target run at the beginning of the week, we can use the card or cash from a shared pool before splitting up our “allowances.” So far, so good, but we had most of our household needs stocked up before the month started, so no real fireworks yet. 🙂
So that’s how it went. I don’t think either of us are thrilled with having to be more disciplined and picky about what we spend on, but I think we’ve seen that it is do-able. We don’t really have to sacrifice much that’s important to us if we are conscientious about our budget and avoid wasteful spending on unimportant things.
On an unrelated topic: I had hoped to have a numbers update next week, but all of my Direct Loans got transferred yesterday to a new servicer, so I’m not sure when I’ll have my new account available online to pull down balances. So we’ll get a numbers update going when the transition shakes out. Drat! I was just getting used to the Direct Loans interface too.
Happy Friday! Wish us luck for next week!
Nice work! My loans just got transferred too, to Great Lakes, 2 days after I made my monthly payment (good timing). I just went in and pulled down my payment history so I have it in my records for the Income Based Repayment / Public Service Student Loan Forgiveness.
I got transferred to Great Lakes too! They messed me all up and had me overdue on a payment I wasn’t even supposed to make and even if I was supposed to pay it, it would have been auto-debit so I shouldn’t ever be able to be overdue. So annoying!
I’m glad to hear that your system is working fairly well for you. I am not convinced that one giant bucket for all kinds of different spending is the right solution. I did something similar when I first started budgeting many years ago and found that I kept overspending. It wasn’t until I started tracking each category that I could really tell where I needed to make changes. I really don’t know how you can include clothes in the same category as groceries… when you buy clothes for a new season, are you supposed to not eat that month? Anyway, I’d recommend tracking more closely each area. But either way, good luck!
We have a separate grocery budget.
But the answer to your question, if it came down to it, is that we’d not buy clothes.
I like your system. It’s simple. Easy to keep track of. Easy to stick to (important).
As to buying new clothes for a new season from previous commenter. I haven’t bought any clothes for a new season for two seasons. People haven’t noticed yet. I think any personal allowances ($75 each, right?) money left over each money can be saved enough to buy some clothes at the end of the year/beginning of next year, etc. I think it can be done.
we buy most of our clothes used. emily has done a great job finding deals. i’m not worried.
not to mention that the concept of “seasons” here is a little murky. i wear pretty much the same thing year-round.
there is a little flexibility in the budget – this month we have a separate line item for tires. in future months that could shift around (brakes next month, maybe clothes another time).
Buying used clothes? That must be saving you guys a nice chunk of change!!! And, IMO, it offsets the hair salon expenses. Or, at the very least, at least Emily was spending $200+ on both hair AND clothes 😉
Any thoughts on putting your budget on the blog? Income & expenses? I know you mentioned using the snowball method, how much extra are you planning on/able to pay each month? Great job so far! I am just curious as to the details but I understand if you are not willing to lay that all out there.
I was wondering this too. I went back but your total monthly paydown wasn’t actually stated.
I’d love to know too. I need help with budgeting myself.
I think starting anything new can be difficult. I also believe that most things worth doing are difficult. Good luck with the new method, sounds like it is promising!
Keeping a budget is a tough job for newbies but, I assure you it is a very motivating tool to get rid of debt, save money for a want and just accumulate “wealth”.
I budget pretty much the same way you do. It will take a while to adjust and sometimes you will slip but that’s OK.
Keep up the good work!
Sounds a little shaky but it’s progress. Did you guys sit down for a review of where you can do better?
It might be helpful to revisit Dave Ramsey’s idea of how a budget works – you’re the boss of the budget until you make the budget; after that the budget is the boss of you.
Once you set a budget, Dave says you should “pinky swear and spit shake.” It’s a contract that you don’t break. It’s a promise to each other, and to break it is sort of like lying or breaking a vow to your spouse. So, no resorting to debit cards, period. No cheating.
I changed once I realized that breaking my commitment to my spouse (and myself) wasn’t cute and wasn’t minor. It was a breach of trust and I was undermining an important effort, which in turn can undermine a marriage.
I’ve been trying really hard to stick with the budget, and I agree, I don’t think it’s cute or minor to go outside of the budget to buy things. At the same time, I try not to be overly serious about the budget or our financially situation. i don’t want to emphasize money issues over more important issues in our marriage.
Using cash is really a brilliant idea as you are a bit more conscious about your spending when the money is immediately gone rather than getting paid out at the end of the month (or whenever you get around to paying off that credit card….) I think stick with that and it will get easier as you will just naturally buy less needless stuff because of the pain : lol.