Budgeting...

Like J-Mama stated in her post previous to this, we spent some time learning the art of couponing this morning.  It was a lot of fun to enjoy each others company and learn something new!  In an effort to get debt free, I've created a VERY strict budget for our family.  The couponing will help with our household costs, but I have realized that we over spend in several aspects of running our home.  Grocery shopping is a BIG one.  It's SO easy to just pick up things here and there at whatever store is closest.  In February I really focused on looking at the ads and seeing where the best deals were.  I'm lucky that I live in a town that has several grocery stores with great deals going on, and they are all fairly close.  It worked very well for February and we saw much less money going out the door than we had in previous months.  To kick March off with a great budget start, we are taking a page from the Dave Ramsey book and using a cash system for many of our expenses.  There are several things that I pay online to make my life easier...

Mortgage

Electric

Gas

Water/Sewer

Cell phones

Home phone/internet

There are also a couple of things that come out on a specific date every month from the account without me having to do anything!  (We also got discounts for doing this!)

Cable

Car insurance 

Then there are all the rest...

I broke them down into things that we need to spend money on, but would like to keep track of how much exactly we are spending.  I'm TERRIBLE when it comes to balancing a checkbook...and when you throw a debit card into the mix, Heaven help me!  So Josh and I had decided to try the cash envelope system to see how it would work for our family.  We put our budgeted amount of money in the envelopes and when it's gone, it's gone.  Granted, if our grocery money is gone and we need milk or bread, we'll have to work it out.  But I think this is going to give us a realistic idea of how much we spend and whether or not our budgeted amount is reasonable.  I'm pretty sure that I lowballed us on the amount for groceries, but I see that as a challenge! :-)  Josh and I have decided that if we need to purchase something and don't have the cash envelopes, then we will use the receipt to remember how much we spent, take that money out of the envelope and deposit it back into the checking account.  That may seem like a lot of work, but until we get the hang of this, we want to make sure we are keeping track of everything.  I broke down our other expenses as shown in the picture...

Tithing - We will take this money out each month and when the check is turned in to the bishopric, we'll deposit the cash.

Josh Coffee - You may say "Why not just buy a coffee maker and do it yourself at home, wouldn't that be cheaper?"  Maybe in the long run it would be, but Josh usually only drinks about a cup of coffee a day.  (Also, we tried that and Josh said it tasted like crap and that he like McDonald's coffee better!)  He said with tax, a cup of coffee at McDonald's only cost 1.39.  There is, on average, 22 work days a month, so he gets $31.00 for coffee...when it's gone, it's gone!

Grocery - This is for all FOOD items that we need to feed our family.

Non - Grocery Items - This is for things like diapers, toilet paper, paper towels, etc.

Entertainment - This is money that we use for our family to do fun things.  Some months we may not use it all, then it just rolls over to the next month!

Gift - In an effort to not go crazy at Christmas and on birthdays we have a specific amount of money that is only for that...really hope this one is as good in real life as it is on paper. :-)

Clothing - We have three boys, they grow....FAST.  They are in and out of clothes so quickly it's hard to keep track!  This is for us to have money to replace pants that are too short and shirts that are too stained to wear anymore.

Gas - I fear I have lowballed  us on this also, however, with Josh moving to four tens, me working four days a week (two days just around the corner from home), I am hoping that we can do this.  Gas prices are going up and this may have to be the first to get bumped up.

So there you have it!  We are going to give it a whirl and I'll be sure to let you know how it all pans out! :-)  Wish us luck!