I remember the days that I used credit cards to pay for Christmas.
There were two key reasons that I used these fabulous credit cards:
- I did not save money for Christmas during the year
- I overspent on Christmas presents
I solved #1 by creating a Christmas escrow account.
Let's say that I wanted to spend $1,000 for Christmas. By saving $83.33 each month, I magically have $1,000 when Christmas arrives! This takes away a lot of stress, and I highly recommend it! You can read more about creating your own escrow account by clicking HERE.
I solved #2 by putting together a written plan for my Christmas shopping. I pulled up a copy of the Mini-Budget Form (Excel) and entered the names of those I am shopping for this Christmas.
At the top of the form, I entered $1,000 for the "Cash Budgeted".
I then wrote in the amount of money that I plan to spend for each person on the list.
Applying my secret formula for financial success, INCOME – OUTGO = EXACTLY ZERO, I spend the $1,000 to EXACTLY ZERO.
By pulling out cash for the Christmas Shopping, I can ensure that I will not overspend!
I am FIRED UP by all of the success stories that readers are sharing via the "Success Stories" link! Have you shared your successes – both large and small? You can do so by clicking on SUCCESS STORIES on the sidebar or by clicking HERE!
Why is it that I have five different places to spend each dollar that I earn?
My wife and I put together monthly budgets (get yours FREE by clicking HERE) and that means I get my spending money once per month.
By the end of the month, it is extremely rare for me to have money left! Why? Because, I am the spender of the family. Take for an example this month. I had $3 left on Monday. It left me by Tuesday. On Wednesday and Thursday, it was $0 expenditure days! It was impossible to overspend because we use cash envelopes! When the money is gone – it is GONE!
Some might say, "Joe, you are dad-blamed crazy! You have no debt except the mortgage and could easily increase your spending money. Why do you insist on living this way?!"
The reason? Jenn and I have some big huge dreams. Some of those dreams include paying cash for Melea's college, paying cash for her wedding, funding our retirement well, giving Melea a paid-for house to start life out with, and giving to some worthy causes that we really believe in!
Sure, I can bump up the spending money, but I will just be robbing myself of some of my future dreams!
I hate robbery and theft, and I REALLY HATE IT when I rob from myself!
So yesterday started a new month. I have money to spend again. Trust me, I am confident that I will spend 90% of it during this next week.
With all of that said, here is how I have planned to spend the money this month. By the way, I used the Mini-Budget to plan my Spending Money. You can get your FREE copy HERE.
I am so excited to be teaching the Financial Learning Experience in Canton, Georgia on Sunday! The first session has sold out, so I will be teaching the FLE twice! There are a few tickets remaining for the 1:00PM – 3:00PM session. You can obtain more information by clicking HERE.
So here I am – month two of spending my spending money BEFORE I receive it!
This month's budget shows my true priorities – GOLF & Landscaping
I am going to purchase a pair of jeans – or so I am planning on doing so! As long as INCOME – OUTGO = EXACTLY ZERO, then I win!
Want to put together your own Mini-Budget for an upcoming project, wedding, vacation, or other event? Go to the TOOLS page and get your FREE copy!
See previous monthly mini-budgets for my spending money HERE.
Last month, I put an end to wildly spending my monthly allotment of "spending money". At the start of the month, I wrote about how I was going to go about this HERE.
Well, here I am to give an update on how I did with my first month of "spending my spending money BEFORE the money before I actually had it in hand".
As you can see, I did very well this month!!! Here it is, the end of the month has passed and look who hung around to welcome in the month of June – good ole Andrew Jackson!
I will tell you this – I was reminded again of some keys to budgeting. Here are some keys that might help you.
- It is OK to "substitute" Ultimately, it does not matter how the dollars are spent – as long as you don't exceed the overall budget! For example, the top thing on my list was to purchase a $30 pair of jeans. I did not do this. I decided to "sub" a round of golf instead! Is that OK? ABSOLUTELY – even though the round of golf cannot be worn, it was fun!
- Cash Rules! There is absolutely NO WAY I could overspend the budget because when the cash is gone – I can't spend anymore!
- Cash forces you to find a better deal I found a Grill Cleaning Brush for $0.97 at Wal-Mart! That allowed me to purchase MORE plants!
- Spending your money BEFORE you receive it ROCKS! You have all options still available to you when you plan your spending before you actually receive the money.
As Jenn and I were going through the process of changing the way we manage our finances, I conducted a review of how we had been spending money.
Ouch! It was awful! I remember thinking this thought, "Man! If I could spend that money again, I would sure spend it differently!"
I wonder how many out there have thought that thought before?
It is SO true. Unplanned Spending EQUALS Wasted Money.
Well, we started spending every dollar on paper BEFORE we received it, and we started winning in a way we had only dreamed of.
If I may say so, we have done an excellent job of managing our finances since we started using an INCOME – OUTGO = EXACTLY ZERO approach. HOWEVER, there is this one line item that has been driving me NUTS! This category is called "Blow Money".
"Blow Money" is a set amount of spending money that Jenn and I get for each month. We are not accountable to each other for how we spend this money. It is great with ONE exception. I have not been putting together a spending plan for my blow money, so it just runs away from me! It is crazy! It is like this one small reminder of how out-of-control our spending used to be. I simply can not imagine managing all of our finances this way again.
I have said it over and over and over again. Unplanned Spending = Wasted Money
With this in mind, I have resolved to PLAN my blow money spending every month. I am going to have YOU hold ME accountable.
So, without further adieu, here is my spending plan for my blow money for the month of May. NOTE: I have put this budget together using the Mini-Budget Form.