After eleven years of marriage, I think its time to tackle the money! No, I’m not kidding, it has taken us that long to formulate a plan. Yes, I do accept your pity for not having it all together in that department. It’s a short story really. For many years of our financial life, we have had a fair amount of disposable income. Disposable, is exactly how we used that income. Whatever was left after we paid our bills, was disposed of as quickly as possible. Now we are trying to follow two money management schools of thought and they both have to do with budgeting. The first is a zero budget plan (will explain more later) and the other is the envelope system.
So how did we get to this place of “passionate desire” for money management? I mentioned in my last blog, that as a single mother, attending graduate school, I was vigilant in finding ways to stretch the few dollars I had every month. I was a full time student with part-time income. However, when I met my prince charming, he lifted me out of the trenches of the dollar wars. We both had full-time teaching jobs by then, no children in college and one apartment on which to pay down the mortgage. The years flew by so quickly that we hardly had the time to notice that our lives and responsibilities were slowly becoming more demanding.
About three years ago, our lives took some major turns; I returned to school, my older child was preparing to enter college and my husband decided that it was time to follow his long-held dream of owning investment property. All this change was exciting and scary but what we failed to adjust was our mindset about how to adapt our lifestyle and income to meet these new demands.
We have never been one to keep up with the “Jonese’s” quite frankly, we don’t even have friends whose names begin with the letter J.
Outside of our mortgage and school loans, we really didn’t have gigantic debt, only a bunch of little ones which like mosquitoes, kept biting us all over. Eventually, we realized that we had to do something to save ourselves. The writing was on the wall and the translation was that we had to make some major lifestyle changes right away.
The first of course was to take a serious look at our debt and responsibilities. eliminate the fat and start writing out a monthly budget. We chose to implement the zero budget plan (I promised to explain this to you earlier.) The zero budget concept is to assign every single dollar you bring into the house a specific job. After you have paid all your bills, if you have even a few dollars left over, assign those few “leftovers” a job until your budget is at zero.
The next best thing we did was to transfer to an envelope system. Again, after you have created your budget for the month, and accounted for the automatic withdrawals which will take place, take out all the cash you would normally swipe off your debt card and put it in specifically marked envelopes. We use cash exclusively for groceries, gas, entertainment and miscellaneous drug store/dollar tree items. Is all this dividing and dispersing of monies a bit inconvenient at times? Heck ya! So why do it?
This system forces us to really think about every purchase or service we use. Of course, it has simplified and focused our lives tremendously. It has given us direction to buy what we need, but more importantly the freedom not to buy at all. A zero budget encourages you to ask the question quite often, is there money allocated for that this month? If the answer if no, then allow yourself to walk right out of that prison of compulsive purchasing that has held you captive for so long.