I covered the mechanics of how I actually started the cash system in my last post. This time I want to show you how we divide up our money and make decisions.
I feel like our real life budget numbers are going to be the most useful in this post so please be gentle. This is a synopsis of where we planned to spend our cash in January and how we actually did. Our cash envelopes are broken down into nine categories:
|Personal – Andee||$70.00||$60.00||86%|
We budgeted a total of $1064.00 and spent a total of $880 so even though we came in over budget on two categories we still only spent 83% of our cash allotments! That is pretty exciting and encouraging. Some categories likes Car Maintenance, Gifts and Dog Money will just continue to grow each month to pay for things that will cost more than one month’s total. A trip to the vet would obviously cost more than $50 and the left over each month will just keep accumulating so we have enough to pay the vet in cash – ideally. The car maintenance and gift categories work the same way.
Now let’s talk about where we went over – entertainment and eating out, the two categories that took the biggest hit when we started using cash. We went over on eating by one meal and that was a special occasion where we took pizza to a family member’s house to watch a football game. It was at the very beginning of the month and we were still afraid of how things would work. Excuses, excuses I know. Don’t make our mistakes! The entertainment category will fix itself this month because we only get $5 instead of $50 to balance it out, plus we still have a $20 left from January so essentially our entertainment in February is half of what it was in January because we spent too much. There was a play we both wanted to see and my husband surprised me by buying tickets, he is very sweet and thoughtful – and the play only ran in January. So it was worth it to have less in February, plus February is a short month so we won’t need to spend as much anyway! Right? I feel like I just spent way too much trying to justify that whole thing to you.
The category I am most proud of is groceries. I assumed when we cut our eating out budget we would buy more food and I expected that to be around $500; I planned big because I would rather start with too much money in this category than too little and have to take it from something else. But I obviously way over budgeted; which is awesome!
Changes as a result of spending:
After looking at how we did in January I felt comfortable reducing our food budget by $100. Our home improvement budget was also reduced by $100 for February because it wasn’t until half way through January that we decided to live on one income so we had to make more cuts and home improvement seems the easiest place to cut.
This category encompasses a lot. My husband prefers to have his personal money via debit card because he likes to spend some of his personal money via iTunes. He was a separate bank account at our same bank and I transfer his personal the same day I divvy up the cash envelopes. Remember when I didn’t buy the fox canister at Target ***LINK TO TARGET POST****?! I’m still excited to have such a tangible example of how cash makes a difference in my spending patterns.
Here’s a breakdown of what I spent my January personal money on
New black tights ($5 @ Target),
$5 to a homeless man (I don’t usually give money direct to the homeless buy I really like I was supposed to)
Diet Coke ($1)
New Shirt ($3.99 @ Goodwill)
Lunch with Mom ($18)
Lunch w/ Mom and Sister ($7)
Dinner Date w/ Husband ($15)
That leaves $1 I have no idea what I did with. Remembering everything I spent my personal money was tough. I need to write a separate post about how much I love the “personal money” category!