I mentioned that I don't do resolutions. I don't usually even set goals with the new year. This next change for us just happened to occur at this time of year. It really isn't a new year thing. It's just necessary.
Budgeting. We have used an "envelope" method of budgeting since we moved to Texas. I found a computer program called "Budget" (ingenious, eh?) that looks like little envelopes on the computer screen. You figure out how much goes into each category from each pay, enter the check and all the money disperses automatically. Sweet. It can also track (from each envelope) balances on credit cards as well as your checking account. Since we use 2 credit cards that give us cash back and pay off our balances every month, this feature was important to me.
I've really appreciated having a more automated way of tracking our finances. (Let me say that prior to this program, Joel could never figure out what all the numbers in my check register meant! I would subtract every expense, kept a separate register for non-changing monthly expenses, and kept a running total of our credit card charges. It was complicated!)
While I love the computer program, we needed to change. I'm still using Budget. However, we have decided to go to a CASH system for all fluctuating expenses each month. I will still deposit our paycheck and the program will automatically distribute those funds into each envelope. But, now I actually go withdraw the hard, cold green papers and put them in actual envelopes and pay with just that! When there's no cash, there can be no purchase.
Seriously...hard change. So, I thought.
I'm actually loving it.
It's only been one week, but I LOVE that I could see how much I had for the whole week in certain categories. There are some envelopes that were always going into the red on my computer. It's a lot easier to not pay attention to the limitations of an envelope when you're just swiping a card. I always justified it by saying "but we're getting cash back if we use the card." Whoop-de-do! Who cares if I get back $50 if I overspent $150!
So, here's my envelope system now.
I placed even more strict limitations on us for these first few weeks of January. We're both enjoying the "debate" we have to have internally when we think about buying something. It's made me evaluate true need vs. want. I need that!
And, right as we were making this switch, I found several blog articles that were encouraging and gave all the reasons in much better explanations that I could do!
--The Frugal Find: Save By Using Cash
--The Frugal Find: A Really Funny Video
--The Happy Housewife: Simple Ways to Save
--$5 Dinners: Her Goals for 2011 with a Section on Finances