We began using a virtual cash-style envelope system at the beginning of this month (June 2012) and have been doing fairly well with it. This month has not been kind to our budget, causing me to shuffle money between envelopes like mad.
There have been way too many large dollar purchases like Katie’s birthday party and our winter CSA share. Next month won’t be any better with the local pastured hog and beef order from our farmers coming in. Still I am able to actually see where our money is going and compensate for it by restricting purchases in other areas.
We not paying off a huge amount of debt yet, but neither are we piling it on a credit card.
Here are the 5 most important things that I have learned so far using the new budget system:
1. Write down a kitchen inventory before making the menu plan and food shopping list. Then be sure to make a menu plan!
I have had one $22 weekly shopping trip and another $44 one in the last few weeks. This is all while shopping at Whole Foods Market, Trader Joe’s, and a local farmers’ market and buying exclusively organic products, mainly grain-free, and local and pastured when possible.
Unheard of to me a month ago when I could spend over $1200 on food. 1200 DOLLARS for 3 people and a cat?! Yeah, that’s what I said. It wasn’t a result of our GAPS/Primal style diet. It was poor planning.
2. Estimate the cost of grocery shopping list items and adjust the menu where necessary.
Estimating what each item costs and looking for coupons or buying some foods based on a coupon has also been key in keeping our grocery budget in check.
I find that if I want to include a splurge into our weekly menu like a fruit salad of pomegranate seeds and blueberries (our blueberry bushes should be producing next year to provide us with free berries!), I can adjust some of the other foods we eat to portion money toward the more expensive items. I will buy peanuts instead of almonds for hubby’s snacks or focus on cheaper vegetables like potatoes or cabbage over endive.
3. Know your actual spending habits before you begin a budget.
Don’t pretend you aren’t going to eat out if you still feel the need to do so. Make sure there is money in the envelope at the beginning of the pay period instead of trying to rob it from another when you spontaneously splurge. I allocated $20 per week for my husband and Katie to have lunch at Whole Foods when they go grocery shopping. It’s her favorite field trip of the week, and I wouldn’t dream of taking that time away from them. I am happy to make adjustments accordingly to fit it in.
My overall budget was fairly accurate when we started, since I already had a theoretical budget in place. I did underestimate our fuel charges and had to increase the money in that envelope to keep from stealing from other envelopes throughout the pay period.
I have also been all over the place with our food budget as I make changes. I am working on spending under $800 per month right now.
Over the next few years, I will move toward growing most of our produce, herbs and spices, and buying all of our meat locally from organic pastured animals. As you poke around here at 20 something allergies, you will find that I make just about everything else myself including an all-purpose cleaning scrub, tooth powder, and deodorant.
4. Using an envelope system makes all the difference when you are a visual person.
I can physically see where the money is, even when it is numbers in cartoon envelopes ala Mvelopes. This really helps me not go over the budget just because we want something or it’s a good deal.
We do not NEED everything we WANT. If I can justify the expense, we still don’t necessarily need it right away. Katie is in beginning gymnastics so doesn’t need to start ballet yet. A fitted sheet may be losing its elastic, but the set is still high quality and can be used until I find a great deal on a new one. Again, totally new concept to us.
Do you remember me telling you that we were spendthrifts? We’re working on it.
5. Be fluid in your thoughts on spending.
I returned a pair of shoes that were too large and was able to buy the kids size for $23 less. I am now even more of a fan of KEEN shoes! It would have been a $50 savings, but the original pair were purchased at 25% off. The money I received back from the exchange went toward bulk purchases of fair-trade organic sucanat and sugar (only for fermenting drinks) without causing my grocery bill to overflow into the “money tree” category. What is the money tree category? Well, that is the credit card that ‘magically’ generates free cash when you need it.
I am still repeating “There is no money tree. There is no money tree. There is no money tree.”
What is your best budgeting tip?
Photo Credit: TaxCredits.net