Under the bed, in the closet, behind a tree, in the laundry room. Those were some of my favorite hiding places when I used to play hide and seek with my sisters. Since I always picked the same spots, they of course ALWAYS knew where to find me. But that was the thrill of it, right? Knowing eventually (and in my house eventually meant about 15 seconds,) that you would be found? I would always let out a shrill shriek as one of my sisters would “tag” me.
Unfortunately, hiding from your finances isn’t so fun. They always seem to “get you” one way or another, and you find your sacred hiding place isn’t so sacred after all. With this being said, it’s been brought to my attention that my posts about organizing your money in envelopes, budgeting, and all that good stuff are great but at the same time pretty overwhelming. Many have asked, “Well once I read that, where do I begin?” I’ve been turning this over and over in my head for a few days now, trying to think of the best first step: one that is effective and habit forming, yet not so much at one time that there’s no hope for anyone to stick with it.
Before I get into all of this, I will preface it by saying in order to change your financial world, you have to WANT to change it. As we all know, change is terrifying, yet if you think about it, it’s the only constant. Somehow though, that doesn’t make BIG change any easier. And for most people this is a BIG change. It’s kind of like wanting to lose weight. For those who want to, it’s easy for them to say, “I want to lose 15 or 20 pounds.” But to actually set the plan into motion (working out, eating healthy, etc.) is a whole different ball game. So before you continue reading, make sure you’re honest with yourself and say, “I want my financial picture to change, and I’m willing to do whatever it takes.” I’m warning you: there will be sacrifices, there will be times where you have to prioritize your expenditures. But I promise, you’ll be so incredibly thankful in the end.
Now, this may seem like a simple concept– because it is! But it’s not easy to do. There’s a difference… so, here we go! Remember several posts ago when I talked about the envelope system and how it has totally changed the way my family not only spends but values money? Well, we’re going to take a teeny, tiny step towards creating your own envelope system. I know, <GROAN.> Just stick with me here…
Those that use the envelope system have several different envelopes, and for each person/family there’s different envelopes that are needed (i.e. pet care, home improvement, vacation, etc.) But there seems to be two envelopes that remain fairly consistent: food and gas. You can already see where I’m going with this, huh? To me, the food and gas envelopes are the easiest to manage, because 1) we generally eat the same amount each week and can estimate how much we spend on food pretty well. Whether it’s groceries, a Saturday morning at the farmer’s market, or going out to eat, these ALL fall under the “food” envelope.
So, let’s say you get paid every two weeks. And you know each week you spend $100 on groceries and $50 on restaurants. You would budget $300 for your food envelope, and on the day you get paid, you would go to the bank and withdraw that $300. And once again, just to drill it in deep, once the $300 is gone, it’s gone. No more pizzas, no more dining out, no more food. Yes, this means leftovers. Yes, this means working with what you have in the back of your pantry. And yes, you will survive. I promise!
This same principle will be used for your gas envelope. Let’s say you use a tank of gas a week. And it takes $40 to fill your car to that coveted “F” on the dashboard. Being on a bi-weekly pay schedule, you’ll take $80 out of the bank, and put it right in the gas envelope. Wham bam, thank you ma’am. You are on your way!
Now, like I said before, this is a simple concept, but it’s definitely not easy. Especially for those of us who have been spending willy nilly for the past several years, or maybe even longer. And remember, the money in the food envelope is only to be used for FOOD. This means random weekend shopping sprees (without money in the clothing or mall envelope,) are off limits. Trust me, when the day before pay day rolls around and you’re living off peanut butter and jelly because your food envelope is sadly empty due to that sweater you just HAD to have, you’re going to be kicking yourself. At that point even liver and onions will make your mouth water.
So there you have it. The first teeny weeny baby step towards an envelope system of your own. Good luck! Let me know how you do!