Allocating money to buy something I wanted helped me reach my goal by allowing me to satisfy a desire without going overboard. I somehow managed to stay on budget each week. Coffee became a Friday treat and I took advantage of as much free food as possible. "There’s the plan, there’s the budget and then there’s reality."īy the end of week two, I had gotten into the habit of bringing my lunch and making different dishes that I could enjoy for more than one day. Reality ended up being somewhere in between the two. I soon realized while budgeting that that wasn't feasible, so I made a more realistic plan. When I first heard about this envelope system, I planned to put so much money in each envelope to keep me comfortable. There’s the plan, there’s the budget and then there’s reality. It wasn’t long before I was stuffing six categorized envelopes with cash and making note of the budgets for digital expenses (commuter pass, savings, credit cards). Last-minute things come up that are hard to plan for, but I did my best to anticipate anything. When I first sat down and crunched the numbers for my expenses, I was a little worried. The experience: For the past three weeks, I’ve been living out of cash-filled envelopes (for example, I have one specifically designated for eating out with a budget of $30 per week). If you run out of cash in one envelope, you can’t dip into another one. How it works: To use this method, think of categories that require a cash envelope and then budget for those areas. At this point in my life, it forces me to be conscious of my spending and yet is forgiving enough when I'm not always perfect. The verdict: I will definitely continue to budget using the 50-20-30 method since it is such a simple, straightforward guide. Trust me, I tried that on week two and I went over budget. Adding up expenses and hoping for the best at the end of the week won’t help. No matter how you choose to track your budget, setting up a routine to input your purchases - whether it's after each transaction or every night before bed - to calculate how much is left in each category is the key to making this method successful. Most importantly, it is essential to be organized with this method. I set it up so that when I added my spending, it automatically calculated how much money I had left in the respective categories. While tracking the budget on paper is a viable option, I chose to make mine digital on a Google Doc. While this leaves room for personal preference and creativity, it is important to choose a method wisely. This method’s primary downside is having no formal way to track spending. Normally, it would have taken me a week to notice, which means I got the money back before it became a larger issue. By needing to consult my bank’s app more frequently, I noticed four fraudulent Chipotle charges the day after they were made. By the third week, I began to bring homemade coffee to work rather than my typical Starbucks run.įorcing myself to budget had an unexpected benefit. For example, I soon realized small food purchases are my weakness. There was no “forgetting” purchases when I had to write each down. Having to admit my purchases to myself proved to be the most difficult task. Though this is a basic concept - the less you spend the more you save - it was much clearer to see when the dollar amount fluctuated in front of my eyes. In the case I didn't need or spend it all, the more I saved. If I only allocate 30% of my paycheck to wants, there is no possibility of overspending, ensuring I always have enough to cover my needs.
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