I just started this up again....the last year has found me using and swiping debit cards like its a credit card lol. I think I went off rail when we paid off the mortgage cause it freed up money that used to be allocated to other areas. But that doesn't mean I shouldn't keep giving our dollars a name. I spent thousands on clothing, shoes, home goods,etc...and 95% was wants. I don't want to become that person again like I was in 2008. I used to spend 1000/mo. on Sophies clothes. Anyways, thanks for hearing me out. Janine
I think I went off rail when we paid off the mortgage cause it freed up money that used to be allocated to other areas. But that doesn't mean I shouldn't keep giving our dollars a name. I spent thousands on clothing, shoes, home goods,etc...and 95% was wants.
The answer is simple, get thee to a bank and put a 30-yr 4% mortgage on the house. (I'm not a DR follower.) But I'm only half kidding, that's exactly what I do with my rental houses. I refi and remove the equity when the equity gets high & loan rates go low. And then I invest the lump sum from the house into the SP500 (@ 11%/yr). (A $50k lump grows to about $1.1M in 30 yrs, you'll be 65).
And the house payment disciplines you to quit throwing your extra money around - meanwhile the extra $50k gives you plenty of reserve if you do happen to fall on hard times. Lotteries have tracked winners - the data shows that many of them are broke in 7 years - same psychological issue that you're encountering - ie, "got lots extra income, why track it?" Trust me, it's better to have an extra million or two.
Greebo and I still hold monthly budget meets, still give every dollar a name and still keep virtual and real envelopes. We've been doing it since 2008 when we found the Dave Ramsey plan. We have annoying things happen but nothing we can't handle anymore.
Glad to hear you are getting back on a plan. Having that financial structure can make all the difference in the world for a shiny future.
Thanks for your posts!!! I feel better when we have a "plan". That's crazy about the lottery winners and being broke in 7 years...it makes complete sense though.
This is so funny, I don't do envelopes, but my sister in law was visiting and talking about her mom - she used the envelope system way back in the 1940's, before Dave Ramsey was born!
I have the taxes and H. ins. envelope,car ins.
power outage-if the ATM's go down w/the rest of the power you will need cash esp. if it stretched a week or 2. We sometimes need gas for the generator or propane.
and an upright freezer fund
I have saving for a new van in the real bank.
Yes, but not real ones. I do the old pen-and-paper method and there are categories with set balances and amounts being added with each paycheck rather than one big ol' lump sum just sitting there. We don't do big, long-term stuff that way, but for example, one account has an extra roughly $150 allotted to hubby's trip to SC to visit his Dad. We took that money from our tax return, bought his plane ticket, and the remainder sits there for various expenses that come up with his trip (parking at airport, treating Dad to dinner...). The money we just spent on DD's bday party sat earmarked in its own category for a while until the event actually approached.
It wouldn't work for everyone, but works for us as I am generally pretty diligent and good about not randomly going over and having to take from other places. I also budget slightly under each paycheck, never knowing what the 'exact' amount will be, so if I need $5 or $10 more for gas than anticipated some week, it's not the end of the world.
Good you caught yourself before you made a big mess! Backsliding stinks, but seeing that you've done it and working to change it is the biggest step to righting yourself again.
I have a spreadsheet that I made that I use. I use a combination of double entry accounting and an electronic envelope system. It sounds complicated but it really isn't.
One (big long) column has each paycheck with the items that are due in that pay period. Each paycheck/items due sections are totaled so that I know where we are for that section (over or under). We use the credit card for everything and there is a section of the spreadsheet associated with the credit card and the budget. This is where the double entry accounting/envelope system is.
Sorry, I thought that describing it would make it sound less complicated and I think I made it sound worse.
I noticed we had 70+ transactions on our back account statement and I totally panic...adding it up was even worse! I told my hubby and he said yeah "life's gotten away from us" It wasn't all us...we have given his mom $4000.00 in the last 9 months alone. A used boat lift was $2500.00....but these were hardly planned...I'm a planner by nature...so you can probably guess how I've been feeling before deciding to fix it.
I feel good using envelopes for our sinking funds. Seeing the money grow in each envelope and wanting to complete the goals I've set really pushes me to save more, faster. And to move on to the next goal.
Sophiesmama I also started an envelope system challenge under the money challenges. I'm pretty sure its just me and FW in that challenge lol come join us!!
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Related Threads
?
?
?
?
?
Frugal Village Forums
1.8M posts
47.5K members
Since 2001
A forum community dedicated to the frugal lifestyle and the enthusiasts. Come join the discussion about simple and green living, cost effective tips, life hacks, debt reduction, recycling, gardening, other homesteading techniques, and more!