starting budget

[jared521]

so i'm trying to get on an envelope system. although is seems a daunting task. my and my wife have decided to just do categories that we have control over.

spending money 40.00 per week each

cats 15.00 a week. don't laugh

car maintenance 12.00 a week
shall include inspection sticker
registration fees
oil changes
clothing 22.00 a week
a little high. due to a 14 y/o son

food 88.00 a week
shall include laundry det
paper goods
personan hygiene

vacation/camping 20.00 a week
possibly bumping it to 30.00

gifts 25.00 a week
shall be inclusive of christmas

entertainment 15.00 a week.
this might need some adjustment. we will have to see how it goes.




we have been on somewhat of a budget of 40.00 a week each. for a while. usually we go out to eat on saturday night with those funds. although its nothing fancy. just pizza or somthing and the rest is for coffee and whatever. does anyone have any experience on the envelope system?

[bjl584]

I personally don't follow a strict budget. I save a set amount, then pay bills and live on what's left.

You made no mention of saving or paying off debt. Are you doing either?

[jared521]

I personally don't follow a strict budget. I save a set amount, then pay bills and live on what's left.

You made no mention of saving or paying off debt. Are you doing either?

well first off. were terrible at managing money. and it shows. but anyways. we have 2k for an ef. and also have 2200.00 in the bank. the next card to get paid off is 3200.00. so what ever we have left over every week. we stock pile to put a dent in something. but typically we have about 1600.00 left over every month. our monthly net is 5440.00

[disneysteve]

I'm not really sure what your question is.

It's kind of impossible to evaluate what you've posted since it is only a portion of your budget. How much debt do you have? What are the rest of your monthly expenses?

Without knowing more, I'm wondering if $320/month for "spending money" isn't rather high. If I had credit card debt, I probably wouldn't be going out regularly for pizza and coffee. I'd be cooking at home until the debt was cleaned up.

Are you both funding your retirement accounts, and at what percentage of income?

We really need to see the whole picture to give any useful advice.

[jared521]

I'm not really sure what your question is.

It's kind of impossible to evaluate what you've posted since it is only a portion of your budget. How much debt do you have? What are the rest of your monthly expenses?

Without knowing more, I'm wondering if $320/month for "spending money" isn't rather high. If I had credit card debt, I probably wouldn't be going out regularly for pizza and coffee. I'd be cooking at home until the debt was cleaned up.

Are you both funding your retirement accounts, and at what percentage of income?

We really need to see the whole picture to give any useful advice.

hi disneysteve, thanks for your interest. i was hoping to hear from people who employ the envelope system. seems to complicated to envelope the mortgage,ins,utilities and so forth.
the 320 for spending is for both of us. 40.00 a week each. we found we needed that. for us just eating everything at home and no spending made us a little cranky. to say the least. we usually eat out on saturday nite with that money. and as for the coffee. i work as a union truck driver. and never know how long my day will be. as well as my drive back to the shop. and usually consist of 1 hour plus in stop and go traffic. and a coffee for the ride back helps control my road rage just kidding. but it does relax me. i love coffee. infact im drinking some home brew right now.
i was funding my retirement. i have a 401k with 10k but ive got a generous pension. so much its almost ridiculous. its almost 6 digits. if i work till im 64 ive been there 16 years. i am already locked in to 3800.00 when im 64 .. im shooting for 60. my only concern is health ins as for my 401k i dropped the contribution 1% my wife only has a 401k. shes 44 with 100k in her 401k she was funding 16% with a 3% match. we have since reduced it to 1% to pay off the 18k in credit card debt.
btw the saturday nite out. theres no drinks involved. because neither one of us drink.
also on the topic of retirement. we were thinking of maxing hers out. when we get this debt paid off. seems like a better idea than me maxing mine out. i make about 65/70% of the income

[scfr]

I can see and understand what you are trying to do - get a handle, and self-impose some restrictions, on discretionary spending. I think it makes sense in your case, and will hopefully have the desired effect of making more thoughtful, conscious decisions about spending instead of just telling yourself "it's only $4, what difference will it make?" and pissing away lots of money.

I think it's a good first step. I'll bet that eventually you'll find yourself scrutinizing your "fixed" expenses more carefully and cutting back in other areas (cable, cell phones, etc). But for now, focusing on the discretionary spending is a really good start.

Personally I've only used a quasi-envelope system for what we called "pocket money" (basically an allowance for adults) when we first started getting our finances in order, about 23 years ago! What we did was "allow" each other $20 per week, handed out as cash each weekend. I didn't use an envelope but kept a separate coin purse in my handbag that I used to pay all of my discretionary spending, so essentially the same thing as an envelope. It really did cause me to become a MUCH more thoughtful spender and was an important step in our journey to financial freedom.

We let go of the "pocket money" system once our situation improved, and nowadays I can't even imagine spending $20 a week on incidentals! My spending on such things dropped off to almost nothing. We don't need the envelope system, but my husband & I are both good at looking at numbers on a spreadsheet and having them mean something to us. That's not true for everyone. You have to do what works for you!!

One of my BFFs uses a more formal envelope system similar to yours, and has for decades. She and her husband have earned middle-class incomes all of their lives, yet are putting their 2nd child through college and are on track for an early-ish comfortable retirement. In my eyes, they are financial superstars.

My only suggestions are that you set a date to review your numbers. After you've stuck with your system for awhile, you may find that you can cut back a little in certain categories without feeling any pain at all! Challenge yourselves to find less expensive, creative ways to get what you want for less money. You don't have to sacrifice your happiness to gain financial independence. Heck, you may even decide to invest in a thermos so you can bring coffee from home on the road with you.

Good luck!

[jared521]

yes thats exactly the desired effect im looking for. like with food shopping we used to spend 100/150 a week. what ever we wanted. one time we threw out a 13.00 ny strip. i had cooked 2 and my wife ended going out to eat with here mother. and i ate mine and the other one went to waste. i was so mad. i didnt cook steaks for about 3 years. so now i shoot for 75.00 bucks a week on food. and try to throw nothing away. also we try to plan our meal most weeks. thats an area we have controll over. and yes i own a thermos. i usually get a coffee. when i head back to the warehouse when im done for the day. sometimes its over an hour in traffic. although i order 2 turbo shots over ice with cream. no ice coffee.almost always under 2 bucks.

[snafu]

jared, it's important to get control of money and I agree it's important to set limits on spending categories using a method that's comfortable and that the family can stick to...long term. You may need to tweak categories and/or sums after a few months trial but every one needs to understand, once the sum in a category is used up, spending in that category stops until the next pay cycle.

Do you expect to be mortgage free by retirement? Retirement now needs funding for around 35 years so we talk about it a lot at SA. We are concerned about employer provided, defined pension because we saw what happened to pensioners from General Motors who lost benefits they had been contributing to their entire work life. GM declared bankruptcy and benefits went poof!

Experience taught me I could make money stretch with a minimum of effort by writing a menu plan. It's not 'written in stone' but you can help wife plan menus for each pay cycle starting with food on hand in fridge, freezer and pantry and creating a list of what's needed so that food doesn't expire or go bad...uneaten. Shopping from a list of items everyone will eat and enjoy saves time and money, win-win.

The fact that flew off the page in your write up was $ 18 K in credit card debt. I recall it has been as high as $ 40 K and you have paid that down a huge amount. I don't like interest! What rate are you paying on each card? How much interest have you paid each month, 2016 January - June? Adds to to a lot.

[GoodSteward]

yes thats exactly the desired effect im looking for. like with food shopping we used to spend 100/150 a week. what ever we wanted. one time we threw out a 13.00 ny strip. i had cooked 2 and my wife ended going out to eat with here mother. and i ate mine and the other one went to waste. i was so mad. i didnt cook steaks for about 3 years. so now i shoot for 75.00 bucks a week on food. and try to throw nothing away. also we try to plan our meal most weeks. thats an area we have controll over. and yes i own a thermos. i usually get a coffee. when i head back to the warehouse when im done for the day. sometimes its over an hour in traffic. although i order 2 turbo shots over ice with cream. no ice coffee.almost always under 2 bucks.

I have nickel and dimed this category to death, and I even now refuse to fund it higher due to waste I see. However, be careful you do not choose a poor diet (all cheap foods) to save a few dollars now, because you will spend a lot more in medical costs later in life. I'm not saying you have to go fully organic or anything, but ramen noodles and rice and beans can only be done for so long without having health problems to come later.

Also, especially since you include laundry and household, I have no idea how you are able to feed 3 people 3 times a day for a week and buy household goods for 88$. I feel like we are living high on the hog for budgeting 165/week for food and household. I have 3 kids, and one on the way. That has to include baby stuff too like diapers. We have to budget and meal plan, especially since my wife is home with the kids all day, but it is plenty if we do right and we eat decent quality.

I am one to kill every dollar on a budget I can. If I see a way to drop 4$ on a bill I jump on it. However, in doing that over the last many years I have also learned a lot of times saving a few dollars isn't worth the loss of quality of life traded for.

[jared521]

thanks everyone for your input. this is the first month i have tried to keep track of my grocery spending. as of right now ive spent 320.00 and i have 12 days to go. but ive got a ton of food here. quality of food is paramount with me. my back round. i used to cook for a living. it just didn't pay well enough. so needless to say i am very confident in the kitchen. and im a fresh fruit/veggies nut. i dont eat anything processed or frozen typically.ill just recap yesterdays meals.
breakfeast: 1 banana few strawberries 1 cup old fashioned oatmeal raw 1 cup milk 3 ice cubes 1/2 mango, all blended together
lunch: classic pbj
snack 3 handfulls of brown sugar mini wheats
dinner homemade chicken fingers and some fries.
late snack. peppermint stick ice cream frappe
now so far today byw i stayed home sick to day. i made a breakfast shake same as yesterday. and for lunch 2 cheese cheese burgers. which i made myself. with some cheeze its. there are no ramen noodles here. id make veggie soup in the crock pot before id make those. for dinner it might be another shake. because i have 2 peaches 3 pears. 2 bananas and a mango to use up. lol. now that im thinking about it. im going to eat my two peaches right now...

[snafu]

Good on you for tracking spending in food category.

Suggest using your cooking skills and experience to use up whatever is at hand to create healthy, well balanced meals. In future, I suggest emphasis on green red and yellow veggies + leafy foods would be healthier choices than chicken fingers, fries and peppermint ice cream which are kids preference. Don't allow the 'high quality' hype to over take sensible choices. Better to buy frozen broccoli, beets, cauliflower, carrot, green beans, brussels sprout and spinach than throw out $$$ of fresh organic veggies whose shelf live is too limited for a one person kitchen. Crock pot does an excellent job for dehydrated beans and lentils all of which can be portioned, repackaged and frozen for bean and kale soup. Smart to take care of your body's nutritional needs to stay healthy another 80 years.