I am a big Dave Ramsey fan, Robert is a growing fan I think. When Robert asked if I wanted to consider starting cash budgeting with envelopes this summer, I was so excited! With quitting my job in April and then suddenly getting pregnant, a good talk on our budgets was in order. When I was working full time, basically Robert paid our living expenses and all my money went into paying down loans (Baby Step #2 in Dave Ramsey’s world… http://www.daveramsey.com/new/baby-steps/ ).
We were still able to pay extra into loans without me working, but not as much by far and we started to see our living expenses begin dwindling our nice emergency fund slowly. So starting in July we went to the cash envelope budgeting system for any variable expenses that we still had a maximum price set on our https://www.mint.com/ accounts. For us this included groceries/eating out (which we combined together), each of our personal spending accounts, home improvement fund, gas, and miscellaneous fund.
After our first month we were ecstatic! We actually had about $20-30 leftover to spare from all the accounts!!! And we saw our savings grow back since we had stayed within budget.
A Few Things We Learned After July:
- It can be hard to remember to bring the envelopes with you as needed.
- You’ll realize your paper budgeting isn’t always what you spend, we went over on gas and food but were able to use cash from other envelopes to make it work.
- Cash budgeting was fun.
- We both made willing sacrifices of part of our personal budgets to help the family budget out, which was a sweet concept instead of hoarding it for ourselves.
- We did go on a family reunion camping trip and used our food budget to cover it, but our vacation budget to cover the extra cash.
- We still had some online purchases to make (gifts for long distance friends, etc). So we decided to install a limited cash budget system for August. See more below.
We left the total cash budget amount the same, but took out less cash since we’d had some extra after July. We also moved our Miscellaneous and Home Improvement funds back to debit card only. Gas got moved to a credit card with bonus points we are responsible about paying off each month. Robert also just took half of his personal spending in cash and kept track of the rest on debit and paper.
A Few Things We Learned in August:
- After feeling the pennies pinched in late July, we went a little crazy and ate out about four times in the first week of August which killed our food/eating out fund and made us a lot wiser the rest of the month. Grocery shopping for necessities (like milk, eggs, and veggies) can be a lot harder when you only have $11 left in your budget for the next ten days. We ended the month for total cash in all our envelopes of less than $3 extra.
- My sister and her best friend spent a weekend with us (they are entering high school) and we worked hard to plan events with coupons to accommodate their receptive love language of gifts but that cut our budget a lot too, we ended up using our personal funds a few times to help out.
- We went on a trip to see my other sister at her summer job and take her home again and all of the expenses were on our vacation budget (separate from cash budgeting), though we packed as much sandwiches, leftovers, and fruit as we could to keep restaurant costs low.
- Looking up deals helps! Robert loves going out for ice cream and one morning he commented that he’d like to go after dinner but I knew we didn’t have funds for Cold Stone or Frozen Yogurt. That very day, I saw a 50 cent ice cream cone deal at Burger King thru the rest of the month! We went and had a nice time using our spare change. We’ve gone three times since too before the deal runs out on the 31st.
- We’re adding more to our gas budget thanks to a raise Robert got!
- We both agreed it was hard to balance debit vs. cash systems. We will be going back to cash for Miscellaneous and Home Improvement next month and if we have to make debit purchases take the cash out of the envelope immediately at home and put it in next month’s cash stock.
Things We Ran Out Of This Month:
- Butter (we resorted to olive oil and salt as needed instead, actually a much healthier option!)
- Gas ( we had to use any spare change, dollars in any of the envelopes to get through the month even with the vacation weekend of gas on our vacation budget).
- Strawberry jam
But we made it for another month and are excited to start month number three tomorrow, and we definitely have a major shopping list!