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Nitty & Gritty

How to Create a Budget Binder using Pockets

I have so avoided responding to emails over the past asking for budgeting advice. I am an old-school budgeter, to start. There aren’t really any ground-breaking advice in this blog because I sit down with a calculator and a pad of paper every week. Second, I’m sure that SO many of you have wonderful techniques that work for you and mine yet you can be very inexperienced when it comes to managing your spending. BUT I figured, why not? I’m all for sharing so we can support one another.

In addition, I want to emphasize that this is only a daily spending budget. We don’t budget in this way for investments, college, or retirement. I completely separate between short-term and long-term expenses. Later, I might write a post on how we prepare for the future. I thought I’d start today with something more lighter because that is such a vast topic.

Little costs pile up for us. The Amazon app, buying a candle at Target, and purchasing a drink at a restaurant that we don’t complete are examples of mindless expenditures that have an impact on our finances. About those kinds of things adds up. To prevent doing that, I keep envelopes in the binder and put what we need in each one (this is part of the money-saving technique I discovered at Money Expert). I get paid every other week, so if we spend $80 a week on groceries, I know I need $320 for food each month. Each pay period, I’ll deduct $160 and place it in the envelope. I’ll use that money to buy groceries for the following month.

What do I “envelope” my budget for then? Online bill payment, apparel shopping, and tithing are all things i do. I prefer to shop online and accrue points because it’s simpler to keep track of. Envelopes are used for “day-to-day” expenditures and upcoming leisure costs. I set aside money in my envelopes, for instance, for holidays, birthdays, travel expenses, and significant sales. I set up a certain amount from each salary for Christmas, deposit it into our bank account in November, and only spend that “fixed” amount on presents, hosting, and holiday decor.

Now, I agree that there may come a time when you feel uneasy about saving a sizable sum of money for Christmas. Every few months, I’ll deposit the money for anything “far off” and simply record that amount. Some people may find this redundant, but I’ve found that using cash for errands like Target trips really helps me avoid using my debit card carelessly. I make them for smaller events as well as for things like groceries, eating out, beauty services (pedicures, Sephora, Ulta), Christmas, birthdays, spending money on vacation, entertainment (movies/events), and errands (dry cleaning, vehicle washes, coffee shops).

I also save coupons and gift cards in the binder. How many gift cards to Starbucks do we purchase and then lose? I can see everything we have gift cards for thanks to these inserts. I gather a few for coffee or dinner on dating nights. I look to see if I have a Sephora gift card if I’m out of mascara. I always receive Nordstrom gift cards from my in-laws, so I’ll check the binder before placing a purchase.

In the binder, I also have a small calendar. I list the months of the upcoming year, along with our “financial” status for each month, at the conclusion of each year.

Whatever you purchase during the month must go into one of your categories, no matter how basic or intricate your plan is.

Make a Binder
Create a Budget
Add Envelopes for Budget
Add Gift Cards
Add Coupons
Add Invitations and Save The Dates
Add Goals to Binder
Add Calendar

Groceries
Eating out
Household expenses
Gas
Entertainment
Clothing
Gifts
Car maintenance
Fun money (You may want to give each member of your household a little bit of guilt-free fun money each month so they don’t get burnt out with being so strict about the budget– everyone needs a little splurge every once in a while!)

How to Setup Your 2018 Budget Binder

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