Budget Friendly

Ben and I have always payed attention to how much money we spend and where it goes. He has a monthly spreadsheet with categories for everything. Over the past (almost!) year, we have been able to track our purchases and evaluate our spending. However, it hasn't really helped us save a lot. For instance, just by tracking how much we spend on dining out is not going to help us budget.
So...we have implemented the envelopes system! Basically, we set a budget and put cash into envelopes for each category. When the cash is out, it's out. We have only begun this month, so I will have to post an update later to let you know how it's working for us. I know we will have to revise many times until it works, but basically our system goes like this:

Envelope Categories:

- Personal Care (clothing, hair cuts, WW, etc)

-Home Improvement

-Entertainment/Dining Out

-Pets

-FUN Money (separately)

We have a budget goal for groceries, but decided not to make that an actual category because it's hard to budget what you spend on groceries, and it's always going to be cheaper than going out to eat!

What is not included in the envelopes: Monthly bills (rent, utilities, insurance, car, cell phones, cable, etc.). These are items that you can't alter the cost of from month to month.

Right now, we are working on a bi-weekly system: we put cash in every 2 weeks for the month. We will see how this works...we might move to a monthly system. I have a small accordian wallet (about the length of an envelope) where we keep all of our coupons, gift cards, and cash envelopes. 

Sorry for the boring post, but maybe it can be useful to some! I sure hope it helps us save some money for a home purchase!