Make 2012 Your Best Year Ever!

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:

Budget Mini-Getting Organized to Budget

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


6 thoughts on “Make 2012 Your Best Year Ever!

  1. Holly Hamrick says:

    I DO use the envelope system for my gas. When I get paid, I fill up and then take out $50 for gas for the following week. 🙂 MOST of the time (80%), it’s enough. If I happen to take an extra trip during the week, I have to spend a little more.

  2. greenishmonkeys says:

    We do decently on the budgeting but I have been thinking about going over to a cash system in the new year. (we use a card, which is paid in full each month, right now). I have the most trouble doing that with food, though, because we buy food from so many different sources, and on different sorts of plans (CSA, a local food share, a fishery share, a co-op where I buy in bulk….) I track by month but it’s easy to get lost in there. 🙂
    I like the idea of a jar for kid expenses. We do allowance in jars already, but that might give them a visual about other sorts of activities, too, and help them to make choices about those.

  3. Cathy Baker says:

    I used the envelope system quite a bit when the boys were younger. After reading your post I may reconsider it for the empty-nesting years as well. The method works. Thanks for the reminder, Allison!

  4. Celeste Vaughan says:

    I keep thinking about the envelope system, but with three kids, someone is always needing $5 here or $10 there and I end up digging into it, then I have to use a debit or credit card…etc…I’ve done much better lately about NOT using the credit card, only the debit card which makes me much more careful about spending, because I know it’s coming straight out of the account, but it’s still not as effective as the envelope system would be. Any more hints?

    • Allison G. Martin says:

      Celeste, why not teach the kids how to budget also by creating an “envelope” for their little expenses too? I would take that a step further by creating a visual for them. Put each of their names on a clear jar that you keep in a visible place for everyone to see. Put the same amount in their jar each week or month so you have the chance of a surplus on weeks that aren’t so busy. This is a great way for you to track how much money you’re spending on the kids’ activities. Five or ten dollars here and there can really add up, and this will help you determine if their activities are worth that amount or if maybe they should cut back on a few of them. I would encourage you to try the envelope system for one month and see what a difference it makes on your spending.

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