We follow the Dave Ramsey plan pretty closely at our house. Before we started him we followed Gail Vaz-Oxlade and her jar system.
You can type in all of your personal information and it helps you determine how much money goes in each category. To explore your personal allocation go to
http://www.gailvazoxlade.com/articles/budgeting/magic_jars.html
Now we do it in envelopes. We have an envelope for the following categories:
Date Night
Kid Activities
Power Bill
Frenchies/Clothes
Gas
Groceries
Miscellaneous
Dave Ramsey talks about a cash budget and telling your money where to go monthly. At the start of each month we put cash in each envelope. That's the money for the category. When it's gone, it's gone.
At the end of the month there are a few things you can do if money left over. You can allow the money to carry over and build up in the category. For example, the Power Bill is due every other month, this one builds up.
Groceries envelope at month end you may realize you have some extra money to do build your stock pile.
Clothing, Gas and Date Night envelopes we don't let build up.
When we did the jars the happiest thing was we had an empty jar purposely for month end. The last day of the month we would dump any left over money into it to be the fun money. This was how we afforded a get away in a neighouring city for a night, or a movie dinner date.
Now we take any extra money and slap it on the mortgage.
If you are saving for something special, say a vacation or a new purse, have an envelope.
YOU WON'T BELIEVE THIS BUT TRY IT A MONTH AND YOU WILL SEE...
Doing the envelope system makes us feel like we have more money. It gives permission for us to spend money while keeping an eye on the prize.
Good luck and comment below if you have tried these strategies and share your success stories.
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