My husband and I recently started using a finance binder to help us with our budget, saving and spending patterns. It has changed our financial lives in a tremendous way, and so I wanted to share it with my readers here. I learned this technique from the book "America's Cheapest Family", which is a fabulous read, and one that I recommend highly.
Here's a breakdown of our Finance Binder contents. Each category has its own page:
- Allowance/Blow Money (this is for our individual misc. spending, like me getting my nails done or my hubby buying new guitar strings)
- Fast Food
- Gifts and Charities
- Pet Food/Supplies
- Car Repair/Maintenance
- Student Loan Debt
- Holiday/Christmas Fund
If we need to "borrow" money from one account from another, we write it down as a withdrawal from that account and deposit into another. That way everything is accounted for. There is no wondering where the money is coming from for a certain item.
We write the total amount to be deposited each month in a corner of each category sheet so we know how much we have to work with.
If we get any unexpected income- such as overtime hours or gifts- we immediately break it down into what we call our
- 60% Debt
- 20% Savings
- 10% Giving
- 10% Whatever we what
We've been married over a year and a half now, so this budget system has really been trial and error. It takes a while to figure out what works for you. I think this is the best budgeting system that I have used so far (I've tried excel sheets, mint.com, the envelope system), especially in regards to saving. It's completely portable and can be instantly updated. Plus, you get to look over each category every month and evaluate purchases without scrolling through a mine of transactions.
I hope this helps you in some way, whether you're starting to pay off debt, saving for something special or beginning to budget.