Tuesday, August 01, 2006

Envelopes #2

At the end of June, I wrote a post about Josh's and my decision to switch over to a cash-only, envelope system. Now it is August 1st and I am happy to say that yesterday was the last day of our first month on the new system. Over all, it worked great! We made some minor adjustments to our budget mid-stream, but even that was proof that the system was working. Josh's sister from China was here for a 10-day visit, and it became apparent that with all the extra get-togethers and outings, our budget was in need of a little readjustment. Unlike our previous system, the envelope system allowed us to be purposeful about our decision to spend more on fun, and yet still keep to the budget. In the past, we would have just spent the money without thinking about where it was coming from and most likely would have blown the budget. But this month we deliberately moved a bit of money out of several different envelopes so that we could add funds to our "Recreation" and "Dining Out" envelopes. We didn't spend more than we originally planned to spend for the month because for every extra dollar we spent on fun, we spent one less dollar on something else. And the best part. . . we didn't feel deprived about it because it was a decision.

Today marked the beginning of month two and I'm excited. I may be weird, but this system makes budgeting fun. . . If it were a game, I'd call it "Beat the Budget." Every time I go to spend a dollar, I'm thinking about the best strategy and whether or not this is going to help me "win" against the envelope at the end of the month. Who'd have thought this whole budgeting thing would be so much fun!

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