Budgeting

If you have ever read anything on finances and budgeting, one of the first things that is always recommended is that you track and write down everything you spend money on for an entire month. I have tried this and lasted for maybe a little over a week. The budgeting worksheets that I have seen are very detailed and look time consuming. Finances bore me to death!

However, I knew I needed to figure somthing out to get a handle on the outflow of cash throughout each pay period. It seemed like I was always making ATM withdrawls for gas, going out to eat, groceries, etc. And I had no idea how much I was really spending. So I decided to use a very simple form of the envelope system. I now budget $500 per pay period for extra expenses that are beyond the bills. I have 3 envelopes. I place $200 in the envelope marked Groceries. This includes nonperishable as well, such as, diapers, shampoo, papertowels, etc. Then I place $200 in an envelope marked Gas. And the last envelope has $100 marked for Entertainment. This also includes trips through the drive-thru at McDonald's for me and the boys. I intentionally gave myself a bit more than I thought I would actually need. I wanted it to work. And thus far, it has been an outstanding tool. Anything that is leftover in the envelopes when the next paycheck arrives, goes directly to the bill I am attacking.

The bill that I am currently tackling is the Lowe's credit card bill. If I crunched the numbers correctly, it will be paid off in the middle of October. I get paid every two weeks, and as such, October has 3 paychecks. I can not wait to feel that first taste, little as it may be, of victory!

My next post will be about how found extra income and my current savings plan.