Living on a Budget

I read somewhere recently that the two biggest New Year's Resolutions had to do with weight loss and finances. Not really a big surprise, but the same article also said that by the second week of the New Year most people have already thrown their resolution out the window. Another thing that really surprises me is the number of people that do not have a budget in place for their finances. Art and I have lived both ways at one time or another and I have to say that living on a budget is much easier than trying to live without it. You have much more control over your finances if you know where all of your money is going. I am not a financial expert, but I thought I would share what works the best for our family.
You need three things in order to make a budget successful: you need to spend less than you make every month, you need to be honest about what you spend, and you and your spouse need to agree on your budget, and hopefully sit down and work it out together. All of your income should have a specific category, and you should put your budget in writing. Art's check is direct deposited every two weeks, so I pay all of our monthly bills using online banking. It is faster, more convenient, and less expensive than writing checks. After money is subtracted out for our regular monthly bills, I withdraw the rest as cash, and pay cash for everything else. We use a system you may have heard of called the envelope system. We have several different envelopes that each get a set amount of money. When the money is gone you can no longer spend money on that category. If you have money left at the end of the month it carries over to the next month. Some examples of our envelopes are: groceries, gas, clothing, savings, camping, Christmas, car maintenance, misc. household expenses (taxes, vehicle registration, etc..) Different families would have different categories and different amounts. As you go along you may discover that you run out of gas money every month, but have a surplus in your clothing envelope, then you can make adjustments to your budget. I feel in much more control of our money when I know exactly how much I have and how much I have spent.