Going into graduate school, my husband and I knew that if we were going to reach our goal of graduating with $20,000 or less in debt, we were going to have to stick to a tight budget. A few of you have asked what that looks like, so here's a peek!
First, our general method:
Each month, we pay our bills directly out of our bank account through online bill pay (love it!). Every other expense is categorized, and at the beginning of the month we withdraw the budgeted amount for each category and place it in our cash envelopes. Good 'ol Dave Ramsey for ya.
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| My Dave Ramsey Envelope System is holding up well--even after being run over by a car! |
For keeping track of our checking account, we use an old-fashioned ledger. Since we use cash for most of our monthly expenses (with the exception of bills and gas), there aren't many transactions to record and I balance the ledger monthly.
Curious what our cash categories look like? Here's our monthly breakdown:
Groceries: $200
For those of you who read my blog regularly, you have read about some of the ways I try to reach this goal each month, using a combination of freezer cooking and couponing.
Dining Out: $67
We have been slowly whittling away at this category. A large chunk of this category goes towards having a nice date 1-2 times/month. Lately we have gone out for dinner once a month and had a coffee date for our second night out.
Shopping/Misc. Items: $125
This category is for the random expenses that are hard to categorize. It also includes diapers.
Car Maintenance: $50
We have two vehicles, so this covers oil changes/tire rotation/minimal repairs. Any excess is hopefully saved for future car expenses.
House Fund: $40
This money goes towards anything house related--kitchen supplies, home decor, repairs.
Allowance: $25 for each of us (does not include Squishy)
This is a fun category! I like to gradually save my allowance for big purchases, or use it to buy books on Amazon along with my Swagbucks.
Clothes: $30
Self-explanatory! Most of Squishy's clothes are gifts from family, second-hand, or borrowed, so this cuts down on a lot of expense. Andrew and I also try to find the cheapest price possible for quality clothes.
Gifts: $30
This covers weddings (this year we know 6 couples getting married!), birthdays, and holidays. I would like to get more creative in this department. While I like to plan ahead for Christmas, other dates tend to sneak up on me and find me unprepared!
Laundry: $20
We take this amount out in quarters each month to use at the laundry facility.
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At the end of each month, I crunch the numbers to see how we did money-wise. Then Andrew and I sit down and have a "Budget Meeting." We look at areas we need to tighten up in, expenses we have coming up, and evaluate whether or not we should increase or decrease certain budget categories. For the most part, the categories remain the same each month. Our goal is to slowly decrease certain categories to have a budget that is both tight (meaning less debt when hubby is done with school!) and works for us.
Did any of our budget categories surprise you? Do you spend less/more? I'd love your feedback!
One more thing--my envelope system is very plain and basic, but this envelope system tutorial from Kelleigh Ratzliff Designs is super cute (and free!).
Linked to Frugal Friday and Company Girl Coffee (girls, hope you don't mind that I'm talking numbers today!).
When you look at the numbers as per month, you run a pretty tight ship :) That's awesome! Your budget is actually pretty close to what ours is when we have to keep a skinny budget. It's so easy to think "we're the only ones, poor us." :P It's refreshing to know someone else out there doing it, too. So many people think it can't be done, but it really CAN! (Pep talk to self to get back on budget. *ahem*)
ReplyDeletePS - I really admire you both for your commitment!
We spend a little more on eating out and a little less on groceries. It's just the two of us for now though, so that will likely change once babies come along. Our clothing purchases are under general spending rather than in its own category since clothing purchases are rare for us. Our laundry budget is about the same.
ReplyDeleteGreat job! I need to sit down and overhaul our budget. We stick pretty close to our food budget, but my husband is sort of "techy" and feels like if something new is out, he needs to check into it. Which usually means he wants to buy it. Since I do most of the paying of bills, he doesn't really see what I do...no money! :)
ReplyDeleteYou will be so grateful that you ran a tight ship when you have so little debt at the end of graduate school! And you will have taught yourselves a great discipline that will stick with you. Lessons that Tigerfan and I would have done well to learn earlier on in our marriage! Keep it up, you will never regret it!
ReplyDeleteHow inspiring Alicia! I know so many young couples that could profit from this set up. As others have said, you will never regret this approach to debt and it will serve you so well in the years ahead. It makes my heart smile to see such a dedicated Christian couple making such a difference in our world.
ReplyDeleteAbundant blessings to you!
It looks great! And it's so much better to run tight now, to avoid the debt, than be forced to do so in order to make the debt payments.
ReplyDeleteWhere do you categorize the household paper/cleaning stuff like toilet paper, paper towel, dish soap? Just curious. When I had to pare down, I stopped using paper towel - bought the 12/$5 washcloths at Target and used them as cleaning rags instead. I still do that most of the time - bought them in white so I can through them in the washer and bleach them to reuse.
So neat that we use the exact same "brown envelope folder"! We do similar categories and are doing it so we can pay off debt from my schooling. I ran out of Dave's nice envelopes, so I just use plain old white ones now. Works just as good!
ReplyDeleteI love that $67 is your date budget! I've been wavering back and forth between $50 and %75. It just didn't occur to me to split the difference!
ReplyDeletelooks like an awesome budget, alicia! i love Dave Ramsey, but we actually *gasp* use our credit cards and pay them off every month b/c I get points for gift cards for stuff I really use. I am doing a whole post on how I just cashed in $600 worth of gift cards from my AmEx that will go towards birthday gifts and christmas gifts and 2 baby shower gifts. My husband also has to use a credit card for work expenses that can run anywhere from $300-$3,000 a month with business trip airfare, eating out, etc. We use the Gap Visa for all his work stuff and every month I get rewards cards that I also use for gifts or clothes for the children. I love it, it works for us, you jsut have to be really careful that you don't go overboard.
ReplyDeleteRight now we are working on checking our spending together EVERY SINGLE DAY. So it's like a mini-budget meeting every night.
Wow Alicia. I am impressed, especially with how little you manage to spend on laundry. Our expenses were often double or triple that when we lived in an apartment!
ReplyDeleteAs far as gift ideas, I read this post yesterday, and thought it might interest you:
http://www.pennilessparenting.com/2011/01/frugal-wedding-gifts.html
This is so helpful. So many times I've begun to put together a budget, or tried this tip or that tip, but seeing how you actually do your envelopes really helps!
ReplyDeleteThanks! I kind of just want to go home and get some envelopes now.... what a Friday night activity that would be. :)
Definitely have to have a date night envelope! I'm lucky that my mom's work union gives her a ton of free food each week, so we never have to buy potatoes, carrots, bread, onions, and a few other things. It's scary seeing how things can add up especially if you don't plan your meals or coupon. And hand-me-downs are fantastic!!!
ReplyDeleteHi Alicia,
ReplyDeleteYou guys are doing such a great job! I'm so impressed with your grocery category!!! We also use the Dave Ramsey envelopes (going on four yrs), but our grocery category is $350 which seems like a ton compared to yours! I do a monthly meal plan, but I need to try and re-vamp somehow because we're always scrapping by at the end of the month. I'm so convinced I need to try to get some meals in the freezer too! Thank you so much for your inspiration. You're awesome!
wonderful! can't wait to try this out with my budget to be able to keep better track on the go.
ReplyDeleteFor this season in our lives, we haven't gotten real specific in our categories. Bills get paid, then we have food, car, and household bugets. I do love Dave Ramsy's system though!
ReplyDeleteKeep up the good work! It looks like you guys are doing great!
-Melissa
That's a great budget. Ours is ... well, kind of non-existent.
ReplyDeleteI have a question about your date night budget - does the money cover babysitting or do you take Squishy with you? Or did you finagle free babysitting from someone?
Hey Alicia! Didn't know you had a blog too! Love it. Makes me wish I was back in Nole country just to taste whatever is you're cooking! Tell Andrew I said hello! Love you!
ReplyDeleteAndia
Wow your awesome, i use to be so good at the budget, I need to start on that again, we have some credit cards we need to pay off and that is our main focus now.
ReplyDeleteI LOVE that ledger...Where did you get it? I wish I were disciplined enough to set a budget, but no such luck for me...
ReplyDeleteAs far as "Date Night", if you want to cut your spending a little bit more, why not pick a movie from the public domain? I posted a blog about that very thing yesterday...
Kurt & I are both very impressed by this. We want to do something similar once we get married. Thanks for sharing it's nice to see how much some one is using in each category!
ReplyDeleteI am so impressed. As a mommy-to-be, I am going to be looking for $ saving ideas and frequenting your blog for inspiration!
ReplyDelete