I've been hearing a lot about the "jar method" of budgeting lately. Probably a combination of Gail Vaz-Oxlade's new book coming out right around Christmas time and some friends using this method.
So, I decided to check her method out. I'm still waiting for the book to arrive at our library and then I am first on the list for it. But I checked out her online interactive budgeting worksheets and I have to say,I think I'm converted to this method.
You enter in your monthly income and fixed payments. The site calculates what percentage you are paying in taxes and also tells what percentage you should be paying towards your housing costs, savings, debt repayment and life. AND, it tells you exactly how much money you should put in your weekly jars for things such as transportation, food, entertainment, etc.
We are very guilty of using our debit cards too often. A couple dollars here, $20 there, it all adds up and we end up wondering what we spent our money on. This way, we won't be able (should we have the will power. And by we, I mean me) to use our debit cards. We will need to take cash from the jar and what we have is what we can spend. Nothing more. I'll need to take my calculator grocery shopping and it will definitely make me think twice or even three times about whether I really need something before buying because I will be able to actually see the money in the jar dwindling.
The other aspect that I am really excited about is that Gail's worksheet makes you enter a savings amount and it goes into your budget. Her recommendation is 10% of your monthly earnings. This will hopefully force us to actually save that money so when something like a "forced bathroom reno" comes up, I won't be as stressed about the finances.
This new budgeting is only a small part of our financial makeover but in the end it will play a big part and I am actually excited about budgeting. How lame is that? But with this website, it is so easy, you can't say no!