As I mentioned in my previous post, I had never successfully saved any money before meeting my husband. I was actually using the cash advance through my checking account, losing $2 on every advance!! I was frugal with my purchasing but I was still over reaching my account. When my husband and I first started dating we barely had two pennies to rub together, so we shared everything we earned. Quickly we had to lay ground rules on spending and he taught me how to actually save money rather than just be thrifty! (See my post on money saving tips) It took a few years before we were finally in the green but we stayed committed to our plan and saved our first $1,000.
How Did We Do It??
We took all of our earnings and converted them to cash, then we broke down our budget into categories: bills, entertainment, savings, and travel. Using a small coupon size divided folder we budgeted out the amount of money needed for bills and made a file tab for each bill (rent, groceries, communications, utilities, gas, pets, insurance, loans etc.) next we took the remainder and split it as follows 15% savings, 10% travel funds,and the leftovers we used for our lifestyle entertainment choices such as eating out, adventuring, fitness etc. This ensured that we were putting money away for emergency savings as well as saving for something we wanted to enjoy. We set our baseline emergency savings goal equal to, cost of our bills x3,that way if we both suddenly became unemployed we would have enough time to get back on our feet before the lights went out! After graduating College and landing my first adult job we noticed that with the new earnings our frivolous spending skyrocketed. I realized we could be putting so much more towards our savings and retirement if we got back on track with our budget. I downloaded the Monefy app which I use to track every dollar we spend. This apps is so user friendly and breaks spending categories out into a pie chart which helps visual learners like me! For the first month I just tracked everything to see our trends and then we would set a new budget. I was blown away and a bit bummed to see that we were spending almost 2x what we had budgeted for groceries and worse…we were blowing more than that on eating out! I saw the dreams of cave repelling in Mexico fluttering away if we kept this up. We started setting spending goals for our eating out and beer purchases. We don’t spend much on entertainment since hiking is free, but the breweries along the way were setting us back a pretty penny.
I recently switched to using the budget template in Google Sheets and have found it even easier to track spending. It is also nice that more than one user can input data, so we can both include our spending and incomes. If you are new to budgeting I would recommend trying the envelope method as well as a budget/spending tracker. I guarantee you will better understand where your money goes, it will definitely take time but with commitment you can start to put funds into your savings!