There’s no point in setting out to raise extra money without a firm grasp on where your current cash is going to. After years of trying to keep track in a variety of different ways I’ve opted for a concrete system that I can easily keep an eye on. I give you the recycled envelope cash budgeting system.
At the moment I’ve got six envelopes. They are marked food, fuel, bills, clubs (lessons, subscriptions), luxuries. That last one is important. I think it was Heinlein who said “budget the luxuries first”. He may have got an awful lot of other stuff wrong, but in this instance I think he was pretty near the mark. If you can see that you’re getting near to the money you need for a particular treat it adds impetus to the budgeting.
So what I do is get cash out weekly and then split it up between the various envelopes. I’m allowing £100 a week for food and toiletries for the six of us, although I’m hoping I’ll be able to trim that down, particularly if I can get the cloth nappies going again. Clubs and so have got £40 a week set aside, though I need to check the prices of the various organisations. I’m putting £20 a week into the fuel envelope and hoping that this year is the year I finally sort out bikes for us all and cut out lots of the little journeys that end up costing the most.
Bills are the one that I need to look into. I need to check what we’re currently paying and see if there are any cheaper alternatives. I know direct debits are often cheaper, but if you ever miss a payment through not having enough in your account, then you can often get penalised both by your bank and the company concerned. Not good.
So there you have it, our fledgling budgeting system. Would love to hear your suggestions for improvements.