Trying to do a better job at keeping track of where our money goes!
I’ve always admired those of you who keep track of every penny spent. Although in 2017 I felt we were very good at avoiding unnecessary spending, admittedly, keeping track of every dime spent in every category wasn’t a strong point. I have set out to change that for 2018 by tweaking our cash envelope system and also writing down what I do spend in a small notebook.
For 2018, we have started off with six categories. Here is the monthly breakdown:
- Grocery $400
- Gas $200
- Hubs $500
- Pets $75
- Clothing $50
- Miscellaneous $100
A bit more about the breakdown.
- Groceries also include meals out, toiletries, cleaning supplies, etc. We live in a remote area so groceries are more expensive.
- Gas also includes what we need for the snowblower and lawnmower. It also has a higher dollar amount so that we are better prepared for when we need to make a trip to see our elderly parents.
- Hubs is away from home for weeks at a time, hence a hefty budget. He receives $25 for every night out from his company which helps offset this amount. Although he seldom spends $500 a month, this also provides a cushion for his irregular expenses that aren’t always covered by his company.
- Pets. What we spend often depends on how much food and cat litter is left over from the previous month. I know, you’d think this would be far more consistent!
- Clothing. All depends on the month/season. My Summer office clothing is in need of an overhaul, so I know I’ll spend more when the weather changes. For Hubs, a pair of steel-toed boots can cost $100+.
- Miscellaneous. Covers items such as stamps, oil changes, entertainment, blow money (which we seldom spend), etc. It also serves as a mini-emergency fund.
An unofficial end-of-the-year goal of mine is to have each of these envelopes eventually reach at least a one-month surplus. Had we had this in place when Hubs needed a month off last Fall, I know our my stress level would have been greatly reduced. With this goal in mind, I am also pushing myself to spend less to reach this sooner than later.
As to why we don’t use our debit card for these expenses, we have learned that we do indeed spend more money with plastic. Even though the money is budgeted, using cash makes us think about what we purchase. We saw this with Hubs spending, too. It also helps him keep better track of what he spends as he knows his money has to last! Since he didn’t look at the statements to actually see what he was spending, money had a bit more of an “endless” feel. For the record, Hubs does carry a credit card for emergencies. Although he rarely has used it, he has been in a situation where a debit card was not accepted. There are times when “going somewhere else” isn’t always an option.
Do we worry about having so much cash on hand? Not really. For one thing, I don’t keep all this cash in my wallet. I generally know when I need to go to the store or need to get gas and take an estimate of what I think I’ll need. I also keep a “just in case” $20 tucked in my wallet should something come up. Additionally, I have a debit card to fall back on. When I do travel outside of my usual surroundings (which is rare) I do also carry a credit card. As for Hubs, he doesn’t keep all of his cash in one place. Generally, he keeps around $40 in his wallet with the rest safely tucked away.
One of the many things I have learned during our journey to get out of debt is that a budget can always be tweaked. Needs can sometimes change. We saw this happen several times last year. One prime example was when one of our dogs was put on an emergency diet which, for a month, was ridiculously expensive. Would I have not gotten him what he needed just because the money wasn’t in the envelope? Of course not! We simply made an adjustment and made it work.
Do you budget specific amounts of money for your variable expenses and how do you keep track of what you do spend?
Yes, we budget specific amounts for each category like you do. Of course, since we have different jobs and live in different areas, our budget categories look different. Dear Husband’s budget category is 90 this month, but he doesn’t travel for work or need special work clothes or shoes. Our grocery is higher, but we lump the pets in with grocery. Our gas is lower, but things are nearby.
I know we are odd-balls this way, but we don’t carry cash, and we do use credit cards. We found out very early in our marriage that if we had cash on hand, we’d spend it and then often run into trouble. “Oops, I forgot the food cash was for TWO week’s of groceries.” If we had a credit card on hand, our first question would be, “How much is in the budget for groceries this week?”
We keep track of what we spend by using the EveryDollar online budgeting tool and entering each purchase as soon as we make one. If we lose a receipt, no problem because the credit card company has an online record of what we spent.
I don’t think the specific method of how a family keeps track of a budget is as important as actually having a budget!
The important thing is to find a system that works for you! I learned that I don’t “behave” myself with plastic, hence going the cash route. I’m won’t go as far as to say we never use plastic, but we do our best to avoid it. I commend you for being able to keep your spending in check this way!
I tried using EveryDollar but don’t really think I gave it a fair chance. For some reason, no matter what I try, I always go back to pen and paper.
I would go nuts carrying envelopes of cash. I would probably borrow from an envelope and forget what I owed who. I am considering putting a chunk of cash on a card and when it runs out, it runs out. Or, I could find my debit card from the bank and use that.
I knew a woman who put 1/4 of the house payment in one envelope, 1/4 of the car payment in another envelope each week. I have been paid monthly most of my work life. So, I just sat down and wrote checks for bills at one time. I like having all the money at one time. that is just me, because lots of people swear by the envelope method.
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I’ve just become very disciplined, so the envelopes haven’t been a problem. I also always make sure to get a receipt (even for gas) so that if I do make a rare oops, I can easily go back and fix it.
Years ago I would put cash on a gas card (saved $.05/gallon) for doing so. It worked okay, but I had a tendency to forget what I had left on the card. Lol
Our regular bills (house payment, electric, debts, etc) are all paid on-line.
There is one card that emails you with every purchase and the balance. Another person said she kept the card with a bank check register and just entered each purchase like a check entered.
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I guess I just like knowing that what I have is what I have.
Good for you being able to do the cash system. I’m like Linda – I would go nuts trying to manage it and do exactly as she described.
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I really like it. I have also found that by taking the extra step of writing down what I spend I am saving more as I hate seeing my expenditures all in one place. Lol
We use a cash envelope system also. It has served us VERY well. The categories that we use cash for are groceries, fun money, eating out and half of our home miscellaneous money. We stay on track so much better using the cash envelope system. We often have some extra money remaining at the end of the month that we split. Half to a fun thing (vacation or something like it) and the other half to a goal (new computer or car fund for example). I always look forward to seeing how much we have at the end of the month.
Yay! Someone else who uses cash envelopes! I am excited to see how much we have left over this month. Wish it could go to something fun, but as I mentioned in my post, I’m wanting to build up a month surplus. Once we are out of debt, we may do what you are doing with your extra. Something to look forward to!
I love this. I generally use the cash system as well, but have not been very successful.
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Give it a whirl. What have you got to lose…other than a whole lot of debt?!
It is amazing to me how different everyone is. We tried the cash system and it didn’t really work for us. With the debit card we stick to our budget, with cash it is, in my mind, already out of the account so it is “free money”….makes no sense I know, but that is what we found happened. Now, we did only do it for 1 month, maybe we’ll give it another try if I can talk dh into it…he is not a fan of having to actually walk into the gas station to pay 🙂