Tuesday, January 28

Budgeting with Digital Envelopes

It's the end of January and that means taxes. Taxes reminds us to take a serious look at our finances and budgeting. Last year with the moving and moving again, fixing up our old house to sell/rent, renting a new house and then forgetting to buy presents early for holidays... our finances suffered. This week I've been going through everything and came up with a plan to get us back on track using real drawers and the Goodbudget app (formerly Electronic Envelope Budget Assistant). I'm just talking about the envelopes in this post, tomorrows post will be the drawers.

EEBA/Goodbuget(CLICK HERE) is a free budgeting tool that can be accessed through the computer or up to 3 different digital devices per account (you can pay to be able to access it on more then 3, but we don't need to). The free version allows up to 10 regular (monthly, bi-weekly, etc..) envelopes and 10 irregular or annual envelopes. We opted to use the program only to budget daily life spending like groceries, clothing, eating out, etc... rather then bills. We did this because bills are pretty constant in amount and not much you can do to make them more or less. So I sat down and figured out our bills, rent, mortgage, medical, roth ira, credit card payments (which are much higher then we've had in year, yuck) and added everything up for a month. Then doubled our bi-weekly paycheck, subtracted the bills amount and halved it again. That amount is what we have to work with on daily spending between pay days and break down into our 10 envelopes.

The envelopes we have currently are Groceries/Essentials, Gasoline, School / Kids Stuff, Gifts and Parties, Eating Out, Wants (decor, games, etc...), Trevor's Work Drinks / Food, Clothing, Home / Car Maintenance and Other (licensing fees and other irregular daily spending). We also have two irregular envelopes for Savings (for when we have a little extra to add as a cushion) and Misc (for when I want to separate a specific expense for whatever reason).

We've used EEBA before for budgeting and it helped a lot- I am certain it will help just as much this time.

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