My husband and I have been taking a hard look at our finances lately. We want to increase our savings because we're looking to move to a new home next year and we want to make sure we have what we need for a down payment, moving expenses, etc. So basically we need to spend less. Easy, right?
I've been researching various methods of saving over the past few weeks. I've looked at all kinds of budgeting software (mint, Dave Ramsey, You Need a Budget, etc.) and I've been reading lots of finance blogs and forums. All over the place, I run in to the envelope system of budgeting.
The idea with the envelope system is that you figure out what you are currently bringing in, what you are currently spending, and what your goals are and then allot yourself a certain number of dollars per category (i.e, food, entertainment, automotive, and so on) per month. And then, once your dollars in that category are gone for the month, no more spending. Seems simple enough....
I set about figuring out our spend in the categories we know we could reign in:
- Food (including dining out, groceries, coffees, etc.)
- Household (including lawn and general household items like lightbulbs, paper towels, sheets, etc.)
- Personal Care (salon visits, personal products, clothing, gym memberships)
- Entertainment (movies--including rentals, concerts, museums, etc.)
Let me just say that for the Food and Household category, NOT including household, we were at about $1150. I was shocked, stunned, amazed, and, frankly, horrified. We don't budget. We've never felt the need to because we pay our bills on time, never carry balances, and we always had savings. But I feel wasteful and embarrassed by that amount of money spent on groceries and dining out in one month. When I went back and looked, most of the spend came from restaurants, my husband's meals at the cafeteria at work.
Anyway, here's what we decided on for each category based on our savings goal:
- Food: $550.00
- Household: $300
- Personal Care: $365/person or $730 for the month
- Entertainment: $300
Our most drastic cut was in the Food category so I think that will be the hardest to hold ourselves to. We know this is going to mean a big change for us, so we've started doing some planning in order to make things easier:
- Husband will make coffee at home and take it in a to-go cup (we have a fancy Cuisinart machine that uses k-cups).
- Husband will commit to taking lunch from home 3 times per week.
- We will do a menu every week so I don't get stymied about what to make every day.
- We will commit to eating leftovers or the husband will take them for work/I will have them for lunch the next day.
- We will plan our evenings out in advance; no more spur-of-the-moment trips out.
- We will look for money-saving offers for dining out.
We know this is going to mean big changes in our behavior, but the goal is one we both agree we are willing to work towards. I'll keep you posted; we plan to start September 1.
On a different note, another area that I feel I could really control better is online shopping. I really need to figure out a good system for managing that. One of the really good tips I came across was to get a pre-loaded gift card to use for online shopping and to use that for the month. Also, that it's a good idea to remove your credit card information from all the online vendors you use. That makes it harded to checkout because you have to enter the payment information in and it makes think about your purchase more.
Do you have any money-saving tips for dining out? Or, do you have any money-saving tips in general? Maybe you use the envelope system? Tell me what you know!
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