The beginning of a new year is always ripe with hope and promise, so why not make 2012 the year you get serious about your budget and let it work for you to create a less stressful, more organized and more fulfilling life.
If you don’t know where to begin to set up a budget, click here first:
Already know the basics of budgeting? Great! Let’s move our focus to specifics about how to make a budget easy to use on a daily basis.
Once you’ve created an overview of your estimated spending each week or month, it’s time to see how much cash you’ll need on-hand to make it through the day-to-day of each week. Typically, this will be the same amount each week once you’ve established your main categories unless your income drastically varies from week to week.
I’ll use my husband and me as an example. To keep things in perspective, I remind you that we don’t have children yet, only shop for clothes when we literally need them, are generally entertained by one another’s goofy sense of humor, so we don’t require much to keep us happy. 🙂
We have three, what we consider to be completely necessary, categories (envelopes) for spending:
Groceries (Because we need to eat)~$80
Gas (Because we need to get to work & back home) ~ 40 for me, 40 for hubs = $80
Entertainment (Because we need to have a little fun or we’ll call it quits with the budget) ~ $40
I get this money out on the same day each week for consistency and so that we become accustomed to staying within our limit for each area. Obviously, there are times when one of us needs new shoes, winter coat, etc., and we will go beyond our “envelopes” to fund the purchase of items like this. We think of using the envelope system as setting up parameters to prevent overspending and foster our self-control. The bonus is when we realize, some weeks, that we’ve got a surplus left over in the envelope and can roll that over to the next week. This of course means we get the reward of something unusual from the grocery store or maybe an extra date night.
**I want to note how important it is to let your budget reward you for your dedication and self-control once in a while. This usually ensures you’ll continue to stick with the budget and garner great results from it.**
Once I’ve set the spending limits for each of the three categories, I have the freedom to creatively come up with a different grocery list each week and we decide how often and where we’d like to eat out that week, if at all.
Everyone’s spending parameters will look completely different depending on their desired lifestyle and income level, but setting these up in our life has produced phenomenal results and allowed us to find jobs we really love without worrying about how much we make from them. All our needs are met and we are happy, which is more than most could ask for.
I encourage you to give budgeting with the envelope system a try if you don’t already and keep it simple. Remember limits are designed to protect us from over-doing something, not restrain us to the point of frustration.
Make 2012 your best financial year!!
Questions, Comments, or Feedback: Email me at firstname.lastname@example.org.