I’ve been working this week on getting our budget back on track.
We got lax for a few months, and when unexpected expenses hit, we weren’t as prepared as we should’ve been. So, I’ve spent several hours this week getting caught up and planning our next few months. We use the “envelope method” of budgeting and have found it to be the best way to keep a handle on our spending.
We do almost all of our bill paying and banking online (how did we ever get along before online banking?!) using a Quicken-like program called Moneydance to track our account balances. Like most of those types of programs, it has a budget feature, but it only has the capability of keeping a running tab of what you’ve already spent in a particular category.
For some reason, it’s psychologically much more effective for me to start with a total amount and see how much I have left as the month goes along rather than simply seeing a total of how much I’ve spent so far. This is where the envelope method comes in. When you have cash in an envelope and it runs out, that’s that. We use cash for as much as we can, but for those things that it’s just not feasible for us, I’ve found a great FREE tool…an envelope budgeting spreadsheet! I know there are computer programs and online services like Mvelopes that do the same type of thing, but they cost, and as a family of six living on a single income, every penny counts.
screenshot courtesy of mdmproofing.com
This spreadsheet is simple, effective, and best of all, FREE. We’ve been using it for about a year and it does the job! If you use the envelope method of budgeting or if you’re looking for a good budgeting method, check it out!
Linked with Works For Me Wednesday.