Budget. What an emotional word.
Budget, budget, budget.
When you say it three times fast, it even sounds squinched up and scroogy.
We have always lived frugally, on a budget, and out of debt. But that was, in large part, due to the fact that we lived on a little island in the Pacific where you could buy tuna fish and flip flops and not much else. So when we moved back to the States, there was a fair amount of anxiety about our ability to survive financially in the land of way too much.
But, five years on, we are doing fine. Largely because my husband got mixed up with Dave Ramsey's Financial Peace University at our church, and discovered the cash envelope system.
Here's the idea. You look at your monthly income. You decide how your monthly expenses fit your monthly income. You divide your expenses up into different categories: groceries, clothing, entertainment, eating out, debt reduction, whatever. When you get paid, you get cash out for each category and put it in an envelope. Each category gets its own envelope. Then you spend out of the envelope until the money's gone for that category. Then--and here's the kicker--you wait til next month.
We modified the envelope system to pay all our regular bills online--including paying into our savings. Those expenses can be fixed to fit the budget easily enough. But stuff like groceries, eating out, entertainment, and fun money will just nibble you to death if you don't pay attention. Those are the things we do in cash.
Dave Ramsey says that when you start a budget, you have to wait three or four months to see if it's actually working.
For me, it was more like three or four years. I really did not like it at all. Because I was thinking things like, "I deserve this" and "Everybody else has that."
But I'm finally sold. I can see that IT WORKS. We live with what we have, and we don't worry about running out. We used to be worried about money, and now we are not.
That is really, truly priceless.
So here are some things that have helped us live within a budget.
- We bought a cheap house and are fixing it up ourselves.
- We drive old, paid-for cars. Mine has 234,ooo-plus miles on it. Runs great. Honda, baby.
- We eat at home. I cook from recipes.
- Groceries come mostly from Aldi. They've got the basics for super-cheap.
- Costco. Contacts, glasses, tennis shoes, underwear, socks, wedding cake, tires... good stuff, good service, good prices--and they're nice to their employees.
- Thrift stores, garage sales, and Craig's List. Not too proud to stop and pick something up off the curb, either.
- We stopped going to Wal-Mart about three years ago. Staying out of the cheapest store in America has saved us a lot of money. You don't see the cheap junk, so you don't buy it. Also, you don't have to replace it when it breaks.
- No smart phones. (I promise, they still sell dumb phones. You have to look for them, but they're out there.)
- No cable. (Last summer when it was over 100 for 40-plus days, we caved on this one. But it used to be a great money saver!)
- Our kids have to get a job and pay their own bills when they are ready for adult expenses like driving, cell phones, travel, and dating. They are also paying for college themselves. AP classes. Community college. State schools.
I guess the bottom line for budgeting is to lose the need to have stuff that will make other people go, "Wow, is that the latest..."
Yeah. That never happens to me.
But the more I'm grateful for what I've got, the more that's OK.
Here are a couple extra things for you:
Budgeting tools at Dave Ramsey's website are available to download and get started.
Don't miss out on the other Summer of 7 bloggers this week! Misty Griffin has been writing some powerful stuff about emotional spending. And Kim Kelly-Rhinewalt really jumped on the crazy train--inspirational!