After trying about fifteen different budgeting strategies, I eventually came out with a plan that works for me. It involves cash envelopes, tracking spending, a monthly budget, and a variable savings program.
I am paid biweekly so most my totals are for a two-week period. On payday I reset, or sweep, my envelopes and start at $0. I just make a note of the remaining amount and then pull what extra money I need from the bank to refill my envelopes. You can also roll over your extra money and have more of a cushion. Modify this approach to meet your needs.
I have a more minimalist envelope system, so I only use 5 envelopes:
ENTERTAINMENT/FUN MONEY: $40
MEDS: $40 (filled monthly)
The last two are a little different from traditional cash envelopes.
Food: $250 ($125 per week)
I lump groceries and dining out into this category. This total is also slightly padded to allow for stocking up on sale items or a Boxed order. I typically come in about $40 under in this category unless I make a Boxed order.
Entertainment/Fun Money: $40 ($20 per week)
I should preface this section: I’m pretty boring. The most exciting thing I’ve done in the last month is sing karaoke at my best friend’s birthday party. I rarely spend this full amount but I like having the option. I also have some flexibility with my food budget, as I allow myself to pull from this category if we dine out with friends (because it is so rare).
Meds: $40 (Filled monthly)
For my prescriptions, I have them all set to be picked up on the same day. For that reason, I don’t split this envelope between pay periods.
This is my variable savings envelope. I collect all my $5 and $1 bills, as well as coin change in this envelope. At the end of the week, I deposit it into my savings account. So far this year I’ve been able to save$340.90 from just my change envelope. That’s $6.96 a day! I love being able to see my savings because it keeps me motivated. I love my envelopes because they’re transparent and I can watch my savings grow!
I use my debit card to purchase my gas and I place my receipts in this bag. I calculate my monthly costs and record them in my budget. I used to struggle with trying to track my gas expenses using my debit card but with the transparent envelopes, it’s no longer out of sight, out of mind. I’m able to keep up with my records because I see what I need to do daily. I love it!
My Cash Envelope System
What I Use:
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What budgeting system do you use?