It feels funny to be writing this at 34 years of age. Long ago, I thought that by 34 I would have my life "together." Our family would be financially stable, with money to spend on small luxuries, vacations and home improvement. But here we are, still struggling. Not near the poverty line, but certainly not able to afford the luxuries we dreamed of. Like many 30-somethings, we're working on paying off a student loan. We're WAY ahead than we used to be, but not quite there yet. Luckily, we've managed to stay consumer debt-free (phew!)
I had heard of the TV show "Til Debt Do Us Part," but recently discovered the comprehensive blog and website run by the show's host, Gail Vaz-Oxlade. I decided our family would try the "cash budget" - when you use cash to pay for variable expenses (all of our fixed expenses still get paid online or by credit card).
We use envelopes, as I find the jar method takes up a lot of space on the counter :) We have separate envelopes for our allocated weekly budget (the numbers are spit out by the program, based on your income and fixed expenses). If we run out of cash, we just don't spend anymore. However, we've been cheating occasionally by borrowing money from "entertainment" if our "transportation" envelope is empty. That just forces me to go back and re-evaluate the budget, as it needs constant tweaking. You will often overestimate certain expenses, and underestimate others.
We're almost 6 weeks in, and this budget has been a game changer. We're much more careful in our spending, and I no longer make last-minute grocery shops on the way home from work (when I'm hungry, and more apt to throw expensive/yummy food in my cart). We try to drive less to cut down on gas costs, and we're finding innovative ways to purchase the things we need. Later this week, I'll share all of our tips for living on a tight budget.
Go check out the website and the budget, and tell me - have you put the credit cards away? Do you live on cash?