In The MailBag: Budget Chat

mailbag

I know I have been missing from blogging lately, so I thought a good way to get back to blogging is to answer some reader mail!   So you know me, I am mostly an open book, so ask away and maybe your question will be answered!   I am trying to do better at answering questions, really….I am .

I read the questions below and thought….man what a great blog this would make!   LOL!!

Do you have a budget for everything? Do you focus on only a few? My husband and I with the best intentions have a hard time managing different budgets from one account. do you have any ideas on what works for you?

I would say we have a loose budget for most things.  I have a debt reduction plan.  I use a Rapid Debt Reduction Calculator on a site called Debt Proof Living.  I took all my current loans and credit card debt at the their minimum payment plus an additional $100 a month and that is what I put towards debt each month.  This is not a free site.  My oldest son made an impressive debt repayment plan from a free site.   It uses the same principle of snowballing your debt repayment and sets up a debt repayment plan for you. 

In our house one of us is paid each week, so I actually work on a weekly budget.   I have a bill paying sheet similar to the one below for each pay period in the month that details what needs to be paid each pay period.  This works for us….we seem to live week to week or paycheck to paycheck.

 

Due Date

Amount

Pymnt

Date

Payment

3/26/10- 4/06/10

 

 

 

 

Weekly Budget

 

150

 

 

Paul’s Money

 

100

 

 

House Payment

 

233

 

 

School Tuition

 

97.50

 

 

Tuition Bucks Order

 

 

 

 

Mortgage

1st

938.71

3/28

8807

Xcel Energy

1st

177.29

3/28

8808

Chase – Online

6th (2/2010)

400.00

3/28

Online

Bp/Chase – Online

6th (2/2010)

212.00

3/28

8810

 

 

 

 

 

 

 

 

 

 

Each week I set aside $100 in cash in our grocery envelope.  I also purchase $25 Walmart Gift Card each week for any household items that need to be purchased at Sam’s or Walmart.  I save them up from week to week until I go to the store.  That is how I budget for groceries and household things.  We also budget our gas purchasing this way.  We buy the same amount of SA gift cards each week.  We purchase all our gift cards through a program through our son’s school so we get a portion back towards his tuition.  This year we were able to cover just over one month of tuition with the earnings from our purchasing gift cards through the program.  I will always take free money!!

I also set aside out of each paycheck 1/4 of the cost of our house payment so we can spread the larger expenses out over the entire month.   I do the same with School Tuition and Child Support for my stepson.  I put a bit away each week until the payment is due.

We have a separate checking account (Freedom Account) that we put the money we are saving so we don’t accidently spend it.  We keep a accounting of all the money in that account and what it is set aside for.   It is sort of like a virtual envelope system.   Below is a sample of common categories in our virtual envelope system.  The total at the bottom should be the same as the total in that checking account.   I use online banking so I am able to move money very easily from account to account. 

 JulyAugustSeptember
Emergency Fund118.45356.45 
Car Insurance17700 
Christmas810810 
City of WBL/75.00 to savings525450 
School Supplies2000 
House Payment233466 
Tuition/Summer Daycare   
Child Support100200 
 3756.452,282.450.00

The other things that is a vital part of our budget working is FUN MONEY.   We have a set amount that each week goes to myself and my hubby that we do whatever we want with.  Neither of us is allowed to come down on the other regarding the choices the other makes with that money.   What I deem as FUN is different than my hubby’s idea of FUN!

Focus???   I focus on my debt repayment plan and continue to pay the same amount each month.  That plan when you set it up has you continue to pay the same minimum payment even as the minimum due decreases.   I focus on one debt paying an extra $100 to that one.  Once that is paid off I take all the money that monthly would go to that debt and apply it to my next debt to pay off.  This is the snowballing principal.  

My husband and I with the best intentions have a hard time managing different budgets from one account. do you have any ideas on what works for you?

My hubby and I have come up with a system that works for us.  What works for us is to have three checking accounts.   My hubby has a checking account that is his.  He only uses this account for his FUN MONEY.  I move it into there each week and he budgets that.  We agreed a long time ago what our set FUN MONEY amount is and adjust it as needed when one of us has something going on like going out with friends or something.  This is pretty infrequent.   We each also get a SA gift card each week to pay for our gas for the week. 

  I have a checking account which is our Household Account in which I pay all of our bills out of.  I take my FUN MONEY out in cash and use the envelope system for that and our grocery money.   The third checking account is what we call our Freedom Account.   This is where we transfer all the funds we are saving for future payments that month, such as 1/4 of our house payment each week.  Then the payment comes due, I transfer the funds from the Freedom Account online into the Household Account to make the payment.  

This is what works for us…..maybe bits and pieces of it will work for you!   If you have more questions, just let me know!! 

Happy Budgeting!!

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0 responses to “In The MailBag: Budget Chat

  1. Thank you so much, this has been very helpful. i have struggled on how to start using the scrip program as well. we are as you know creatures of habit and i think this is the perfect way to get started. I really like the fun money idea, i dont know about you but for us when it comes to prioritizing our wants vs needs it can be stressful. should we or shouldnt we? what else could we use it for the “family” its so easy as a parent to put yourself on the back burner. my pocket will be very happy!

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