2013 budget tips

Welcome to 2013!

Yes, I do know that 2013 started 13 days ago, however, it seems that I'm just now getting back into a healthy, regular routine again.

Back to the gym.  Back to eating healthy dinners.  Back to not drinking every day.  Back to not spending money like we're millionaires.

I never really make New Year resolutions.  I find that they too often get broken before we even hit February.  So, I usually just mentally list out my goals for the year.  

In 2013 I want to:

keep living a healthy, active lifestyle
lose the last 15 lbs (always the hardest, see above)
save money so that when then time for a baby comes, we'll have a little bit tucked away

Pretty standard goals, right?

Hubby and I have had a budget for a number of years now, and, as with all good budgets, it's constantly evolving.  I mean, what's the point in having a budget if you don't actually follow it?

We were notorious for spending hours perfecting our budget in our Excel spreadsheet, however, we still always seemed to be living paycheque-to-paycheque.

Just recently, Hubby and I  recognized that the majority of our over spending was happening in the restaurant and entertainment categories in our budget.  It would start with us going out for sushi on a weeknight when we didn't want to cook, or had nothing in the fridge for dinner.  Then we'd go out and have dinner and drinks with friends over the weekend.  Before you knew it we were regularly spending three times our budget each month.  Not very productive in saving money.

In order to keep our spending in check, we implemented a system that goes something like this:

  • we created three envelopes (labelled groceries, entertainment, and restaurants) 
  • each time Amanda gets paid (twice a month) we put $100 into each of our restaurant and entertainment envelopes
  • each time Amanda AND Trevor get paid (works out to once a week) we put $100 into our grocery envelope
  • ANY spending we do on restaurants, entertainment, or groceries has to come out of our envelopes - period.  We're not allowed to use our debit/credit cards for spending in the categories
  • we are allowed, however, to use money from one envelope for another category (example: we can use the money from our entertainment envelope to pay for groceries that we're buying to host a dinner party
  • any money left over in the envelopes stays in the applicable envelope and we can take it out and use it for whatever we want

I cannot even begin to tell you how well this system in working for us.  We usually end up with money left over in the envelopes before we replenish them.  Plus, it's actually become a little bit for a challenge for us.  Do we really want to go out for dinner and spend they money, or can we just whip something up at home and save the money?  More often than not we end up just saving the money.  Plus, eating at home usually means that we eat healthier (which will also help with my first two goals).  

Do you think this might work for your budget?  Maybe give it a try!


Jillian Johnson said...

Having a budget is very important, especially in today's rough economy. I like your method of putting money in envelopes and dividing it. I actually do that with my car insurance since I pay it every six months. This way the money is put away. I'm also doing the same with my vacation in San Diego this summer. Even just putting $20 a week adds up. Unfortunately, not everyone is careful with spending and budgeting. I know a few people who had to sell their structured settlement payment for cash. Something like that should be a last resort.

Amanda said...

Hey Jillian,

I agree, having a budget is essential – how else can you tell what you can afford and what you can’t?

I love the idea of saving cash for vacations too! For our trip to Europe we saved it all in cash over 2 years (and just kept depositing the cash into a high-interest savings account). Doing it that way afforded us to pay for everything with cash up front, we only came home with $100 charged to our credit card…not bad for three weeks away in Europe!

Hope you have a great time in San Diego!