A lot of feedback rolled in from the last FAQ post! I thought I would answer a few more regularly asked questions.
Do you budget using a weekly budget or a monthly budget?
We budget using the monthly budget. Why? Because we have enough in our account to pay for the entire month's bills (Dave Ramsey's Baby Step #3 is "3 – 6 months of EXPENSES in a fully funded emergency fund". Since we can just sit down and pay all of the bills at one time, we use the monthly budget. I will tell you this. I was happy the day we achieved "3 – 6 months of expenses" in our emergency fund, but I was PUMPED to be able to pay all of the bills once per month.
Seriously, I was more happy about being able to pay all of our bills once per month than I was about achieving "3 – 6 months of expenses" in our emergency fund. It has made bill-paying a lot faster and easier. I don't have to balance which paycheck pays which bills and write out checks every single week.
For some people, it will probably be more motivating for you to save money just so you are be able to pay all of your bills in one sitting instead of every single stinking week!
When you and Jenn started budgeting, did you see any immediate savings?
ABSOLUTELY!!! We saved $200/month IMMEDIATELY the very 1st month in our Grocery fund BECAUSE WE USED THE CASH ENVELOPE! The great thing is that we have managed to continue to spend $200 less every single month on this same category for over 36 months!!! We also were able to reduce spending across the board by about another $200/month. Using this "found" money, we were able to achieve debt freedom in 14 months!
If you are just starting out, and are a little reluctant to have 13 cash envelopes in your pocket, try having TWO – Groceries & Dining Out. These are routinely the top two categories that blow up a budget.
How do I stick to my budget?
Wow! If I could answer this question and put it in a book, well, I would be very wealthy! I will tell you what helped Jenn and I stick to our budget – We were SICK AND TIRED of making good money and seeing it all leave every single month. We were SICK AND TIRED of not being able to pay cash for items that we should have been able to pay cash for. We (together) were willing to reduce our spending and give up a few things in order to achieve financial freedom.
As a result of our COMMITMENT TO EACH OTHER and our COMMITMENT TO FOLLOW THE BUDGET, we started winning.
I would also add that another key motivating factor for me was that we could budget some fun in the spending plan. Not a lot of fun, but some fun. As long as the budget equation was achieved (INCOME – OUTGO = EXACTLY ZERO), we were able to go on some small vacations and have some spending money. That was enough to keep me in line and on board.
Do you have more questions? E-mail them to me: firstname.lastname@example.org and I will answer them over the coming weeks.
PS: Christmas is a lot more fun when you are paying cash for all of the presents and there is ZERO debt attached to them!