Having a new baby changes everything, and then quitting my full time job changes it even more. As we moved into this new phase of our lives, our family definitely needed some sort of budget that held us accountable. So we implemented a new simple budget system using mostly cash. It has been amazing and the first month we saved $1,000!
I probably read over a dozen different articles about creating a budget as I was trying to make ours. I realized that everyone does things a little differently and you just have to figure out what works best in your family.
My husband was totally against our budget plan at first. I had to ask him just to trust me and assured him that I really thought we could make this work. And so far, we have. This is what we have been using since January. It’s only been three full months, but I think it is working well for us.
1. Use cash
This was a HUGE adjustment for us, but something I felt like we really needed in order to hold ourselves accountable. Like many people, we were so used to just using our card to pay for everything and would quickly lose track of our spending.
My husband and I both get a set amount of cash each week. This cash is for food, entertainment, or things we want/need for ourselves or Baby B. I have a larger budget since I do most of the grocery shopping. My husband’s budget covers his food and things when he travels on the weekends. When we are out of cash, we are out. That’s it.
We really try to only use cash, but still love our Amazon delivery. Our Amazon boxes have greatly decreased over the past few months, but we do still order online. However, this still comes out of our cash. When we order something online, we take the cash for that week out like it was spent. I put it towards the next weeks cash. Not giving us extra money to spend, but then I just take less out from the bank. Seems confusing, but really works once you start.
So far, when we have run out of cash for the week, everything has been fine. It might mean that we don’t get to go out to eat on the weekend, but it works out.
2. Auto-draft monthly bills
When I first started looking at our budget, I wrote out everything that we NEED to pay for every month. House payment, student loans, insurance, all of those must haves. I made sure everything is set up on auto-draft, and have a total for that amount
I rounded up for things like our gas and electric, since that varies slightly each month. But overall, we have a good solid number that we know will definitely come out of our account monthly. We lowered these bills as much as possible. For example, we got rid of regular TV and just have Netflix.
These items are in a budget area of their own, because we can’t really control many of these bills. We know they have to get paid and make sure that this money is in our account.
3. allot funds weekly
If I gave myself 100 dollars to spend for a month, it would probably be gone in less than a week. It works best if you decided a monthly amount that you want to spend on, let’s say, groceries. But then divide that amount up into the number of weeks there are in a month.
For instance, our family budgets $300 per month on groceries. So, for a 4 week month, we would spend $75 a week on groceries. That doesn’t sound like a lot, but it’s possible to make it work. And that doesn’t include formula for Baby B, so when she starts eating ‘real’ food, that budget will go up to $400 a month.
For a month that has 5 weeks, your budget per week would look a little different. You would still only allow yourself $300 on groceries, but now it is divided by 5. It’s possible to make it work.
4. Go grocery shopping once a week
Every time I go to the store for just a few things, I always easily spend $50. By going grocery shopping only once a week, you will cut down on those random purchases and save money. This was an adjustment for us at first, because when we would run out of something, we would just go get it. Now, we make do without.
I am not a fan of water, so in the past, when we would run out of tea or Diet Coke, we would run to the store and get that and more. Now, if we run out of drinks, I just drink water. And that’s definitely way better for me anyway.
If there is something we really really need, then we may go to the store and get it. We will just bring a small amount of cash to get that one thing.
This seems like a small thing to change, but I think it has made a difference in how we manager our money.
5. Splurge once a month
I know some super strict budgeters would cringe at this, but we splurge once a month. My husband and I go out on a date and don’t worry about what we are going to spend. We don’t go crazy and go somewhere super expensive, but we let ourselves have one night out where we get what we want and enjoy.
Sometimes this includes going to a movie or a trip to Target after dinner. Whatever we decided to do that evening, we keep it separate from our cash budget. This allows us to continue to enjoy doing things together without feeling restricted by our budget. It has worked great and not had a negative impact on our finances at all.
Our monthly budget breakdown
Everyone’s monthly breakdown will look different, but below you will find what works for us as a family of three with a newborn.
Other budgets I have seem look amazing and probably work wonders, but I needed something super simple.
Our spending budget
Our monthly budget is $600 for food, entertainment, and anything else not auto drafted from our bank account.
How it’s divided up:
- $300 – groceries
- $100 – home & car maintenance (like oil changes, gutter cleanings, ect. – this rolls over from month to month, because we don’t always use it)
- $200 – entertainment, clothes, everything else
Depending on the month, we divide the above numbers by 4 or 5. We started out by keeping an envelope for each item, but that got too complicated. Now, I just have one envelope for myself and my husband uses his wallet. I get $400 for the month (because I do most of the shopping or we go together) and he gets $100. The maintenance cash stays at the house for when we need it.
My husband and I had tried other budgets in the past where we had so many items and money budgeted for all of these different things, and it didn’t last. It was way too complicated. This budget system may be too simple for some families, but it is the only one we have ever stuck with.
Like I said in the beginning, the first month we did this, we were able to save $1,000! I wish we had started this budget a year ago. Imagine all we would have saved, but I’m glad we are doing it now and moving forward.