Hold on peeps--this is going to be LENGTHY.
So I
posted a couple of weeks ago about the money man I love:
Dave Ramsey. People have asked some questions about our cash only budget and since I LOVE to talk about it (seriously love) I thought I'd share. I've been thinking about it alot this month because we have been B-R-O-K-E for the second half of the month. Because once the cash runs out--it's gone. I've actually had to swipe some cash from Annabelle's secret stash just to buy some necessities. Sad I know. Most months I'm good at balancing the money out throughout the month, but this month we had family events that required babysitters--and our cash was gone just like that. And our blow money was gone too (I'll explain more about that later). So we've been screwed. But we stick to it, because that is what we do. Right now our kids need shampoo and conditioner, I've watered down the baby body wash, we have 0 toilet paper rolls left in the closet (hoping the ones on the rolls hold out), the kids toothbrushes are missing, I have no hair product. So we go without, no biggie (at least to us because we are used to it). This reminds me of another little story:
My mom came down to visit a month or so ago, and she went into the girl's bathroom. She informed me afterward that I only had 1 light bulb working out of the three. I told her that I knew that, but we only had $10 left for the month and we still had a week and a half left in the month and since the girls only go to the bathroom and brush their teeth in there that they could work with just one light until next month. Because I might need something else more significant so I was holding out. She thought that was sad and took me to Costco and bought me some stuff, which was awesome, but ironically I still only had one light bulb. :)
So that's how we roll. We started this in the first years of our marriage after we attended a Dave Ramsey event. We sat down, made a cash budget and to our shock/horror we realized we were blowing $500 a month. $500 a month on just stuff we couldn't really account for. Seems crazy eh? But seriously everyone does it. Everyone has Target stories where they went in to buy shampoo and came out $50 later and one week later couldn't really tell you what they spent it on. So we went cash only and have been ever since.
I know most people squirm in their seats and think how that just "wouldn't work for them". Well it would and it should. I can't find my book, or I'd post the statistic--but people spend more when they use cards. Using cash really makes you think about a purchase. We really don't correlate card use with cash emptying out of somewhere. It's a visual thing.
So what are the details?
Here is a screen shot of our blank budget.
We have the income at the top, then we have the bills listed. I pay all of the bills online. They are not part of the cash system because that would just be crazy. You'll notice that I put gas on a card. Some people use cash for gas. But the reason I don't is that I'm not going to walk into a station and pay and leave my kids out in the car AND it's not like gas is something you overspend on, nor would you say--"well we're out of gas money for the month, guess we won't go anywhere" that's just absurd.
Then we go to the cash. You should know that we are on an EXTREMELY TIGHT budget because Hyrum is in school. We will have more categories for cash when he is working full time again. In Dave's book he has tons of different categories. I have a small list of very simple categories that fit our life right now. Here are the details:
Food-- Everyone wants to know what to budget on food. When we first started out our budget was NO KIDDING $35 a week. Now that doesn't work for us now. Now our family can survive on $75.00 but I prefer $100 when we have the money.
Date--I won't tell you what are date budget is currently because I don't want everyone to feel sorry for us. But when we first had Annabelle it was $80 a month. We were on a tight budget but nothing like we are now.
Baby: $50 This category is for diapers and wipes mostly. We budget just for a months worth. Our diapers monthly cost about $40 and then every 3 months or so we buy a Costco thing of wipes with the money that is carried over.
Gift: $25 Hyrum's family does birthday dinners each month so this was based on that. We no longer give adults gifts because he's in school. This is our bare minimum, but it work for now. For any gifts Adults have a $10 limit and kids have a $5. Sometimes we have more birthdays in certain months than others and we just have to figure it out. But we have enough in there to cover our limits.
Vehicle: $20 This category we put cash in just for oil changes. It carries over every month until we use it. We use savings for repairs.
Miscellaneous: I won't tell you our amount because your jaws would drop. But this category is for things like toilet paper, light bulbs, printer paper, shampoo, cleaning supplies etc. etc. Mostly anything that is not edible. You know, things for the house mostly. Just all of the other crap that needs purchasing.
Blow money: $100. You won't see this on the spreadsheet because that is an old spread sheet. This is for things that just pop up, or things that are fun. For example this month we bought an old xbox then ended up having to buy Josie eye patches, fix her glasses, and fix the washing machine. So we actually went over and had to use savings. Normally it's for random things like old xbox purchases or that cute pair of galoshes you found on sale at Target. The point of blow money is that you are so restricted with the other envelopes that you need to be able to just "blow" some money on something. It adds a bit of release. We usually use it to eat out spontaneously--stuff like that. Normally we would have savings for medical purchases like her glasses and eye patches and for fixes like the washing machine. We are just bare bones right now so we have to use our blow money for necessities sometimes.
Personal: We don't have this category right now because of school. But usually we each get an allotted amount of money to do WHATEVER THE CRAP WE WANT TO with it. Hyrum doesn't tell me how to spend mine and vice versa. I could cut mine up and put it in a salad if I wanted. But usually I buy clothes. This is great because you release that guilt feeling of buying things for yourself. You can go out to lunch with your friends, buy something from Target, go get Salted Caramel Hot Chocolate from Starbucks. Whatever. It's not coming from envelopes that are for the family. It's all selfish. It's all good.
So that's it for our "envelopes" I don't carry envelopes. I used to carry one of those coupon things, but now I carry the cash in my wallet and the categories are put together with colored paper clips so I know which is which.
The best part of this budget is that you are supposed to spend ALL of it. You should have no cash left at the end of the month--and if you do you can just blow it because you already budgeted for that to be spent. (except the vehicle) It's a great system and it will change your life. seriously.
My friend, Rachel, had asked about online purchases. I rarely do that, but if so I would budget it out of one of my envelopes. Sometimes I re-deposit the money I have in cash because I spent it on the debit card. Or you just need to budget that somewhere into your cash system or blow money.
I usually get my food money out every two weeks. I found that if I get it all out at the beginning of the month, I was more likely to run out quicker.
So that is how we do it for now.
If you have any input from your system (I know there are some other DR people out there) OR questions about mine then comment. I'll answer anything you ask!
