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.
|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:
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.
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.
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!
We take this amount out in quarters each month to use at the laundry facility.
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!).