Mom Moneyhacks: Budgets Schmudgets

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My name is Zoeyjane and I can’t stick to a budget to save my life.

I start off every month with great intentions, and I always start running out of money before payday. My priorities are a little screwed up, but my bills are nearly always paid on time, and we’re never at risk of going without anything we need. But, I have no qualms about spending money on things we don’t need, too. Like Starbucks.

Usually we’re comfortable. But then we moved to a new, bigger, more expensive place that really shows off my decades-old furniture and calls for colour. Namely, I’m broke, I’ve got bills and I covet for my new home.

I know that saying “I’ll stick to this month’s budget” would be like asking Kanye to act respectfully at an awards show.

That’s why last month I devised a fool-proof, rule-breaking method for getting ahead. I’m sharing it in case someone you know hypothetically has problems sticking to her budget:

1. Create the next month’s budget before it starts, with every expected expense and source of income, including due dates.

2. On the first day of the month, pay all of your currently due bills, then withdrawal everything else in cash.

3. Freeze your credit cards right next to the toaster waffles.

4. Label an envelope for each of the expenses from your budget.

5. “Pay” the bills (envelopes) that will become due before next payday, including this pay period’s portion of groceries and rent/mortgage.

6. Sit back and think, “hey, it’s like I’m saving money, responsibly!” Blog, Facebook or Tweet about it.

7. Stick to the envelopes. You can’t touch any of them unless the bill is due, which is when you can pay it in cash or re-deposit the cash to your bank account and pay online/by cheque.

8. Get to the next payday and do it all again.

Some budget hints:

* For groceries: I tend to shop daily, so I “pay” several envelopes – one for every day – to keep my spending realistic.

* For debts: pay off the smallest debt, first. This motivates you because debts are erased faster than via small payments on higher balances.

* For savings: use an account that’s going to be a major pain to access (for withdrawals).

* For purchases: see if there is any way to pre-spend the money you’d ordinarily just blow (for example, I’ll be buying Ikea gift cards and pre-paid credit cards for furniture and painting supplies).

* For extra cash after the bills are paid: spend it on a goal now (debt reduction, savings, and/or purchases).

The beauty of this system is that I can’t shop with a frozen credit card, but it’s still there if an emergency comes up, and I can’t overspend, because I’ve already spent all of the extras. I have no choice but to stick to the budget.

The pain about it is that I can’t overspend and I really miss Starbucks.

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