Let’s Talk About the Budget

Every year at the first of the year, I get a little OCD and reevaluate and refresh our budget. I think tax time throws me into it.  For about twenty years I’ve used financial software to track our spending and I’ve done some unorthodox things to try to make ends meet.

Back in our young married (and not so intelligent) years, we spent what we made and whenever a “big” bill came due (like quarterly auto insurance), I’d have to figure out a way to come up with a chunk of money that I had not prepared for.  Same thing with Christmas, etc.  So, my first attempt at being budget-minded included opening a separate checking account that I would transfer money to each month (just like paying a bill) that included:

• Utilities
• Christmas spending
• Auto insurance
• Property and Real Estate taxes
• Clothing budget
• Gifts (other than Christmas)

I took yearly averages (that’s what’s great about having tracking software – you can see in an instant what you spend in any given time) and came up with monthly amounts to transfer.  When the bills came due… I had no worries, because the money was just there!  It’s basically “the envelope system” – Jacquie’s way.

A year or two ago, I opened yet another checking account that promised a great interest rate… so I started filtering most of the money there and adding as much savings money as I could put back.  I added a new “envelope” for short-term savings (an item I wished to purchase that I would save for, or for a vacation or something of that nature.  I saved for a year before buying a TV.  In a year, you pretty well know it’s not an impulse buy. I’m learning self-discipline, too).

Well, since the economy has gone south, so has our great interest rate. From 4.0% to .33%.  You did notice that has a POINT in front of it, didn’t you?

Once again, I’ve decided it’s time to regroup.

So for the past couple weeks I’ve been spending countless hours reworking the budget and the envelopes and even the bank accounts.  I’m purging all of our accounts into two.  One for our home expenses and one for Dave’s farm expenses.  The new account is currently earning 3.42%APR (down from 5.0+%APR, but this account is set up to try to stay above current CD rates at any given time).  It will be MUCH easier to keep track of “envelopes” having only one general account to operate from. And hopefully, it won’t take near as long to reconcile three accounts or to pay bills.  Simplicity.  It’s a beautiful thing.

I’m learning a few things in my research as well.  I had decided using Quicken to track envelopes (which I don’t think many people are doing) was a bit tricky, so I spent a week or two researching “budget software for the envelope system”.  I heard an advertisement for one on Shawn Hannity’s radio show one day and that piqued my interest.  I decided on a free 30-day trial of one called "MVelopes".  It does exactly what I wanted to do, but seems a bit cumbersome as well, plus it doesn’t track categories for taxes as accurately as Quicken does. (If you use it, PLEASE correct me if I’m wrong).  MVelopes charges a monthly fee – which is something I’d like to avoid since all this is about using our finances wisely.

If anything, I’m stubborn and set on figuring stuff out by myself, so after a few weeks with limited sleep, I ended up devising a way to use my current Quicken system having to make just a few changes and so far it’s working PERFECTLY! I can just hit a report button and see how much money I have in the bank at one time and how much is allocated to each envelope.  It’s simple.

Do any of you obsess like this over finances? Do you use financial software or budget similarly?  I’d LOVE to hear what you do and how it’s worked for you.