Back in the day, my mom and dad used to use cash {gasp}. In the '70's there just wasn't a lot of credit cards floating around. Dad went to work, got a paycheck, we would deposit the check, he'd take out cash for the week and mom would work on the budget every Thursday night. We'd sit around the den watching her on her calculating machine...pound...pound...pound...thrrr, thrrr, thrrr as she'd plug the numbers and then the tape would roll out with the answer to her question. We sat with baited breath as she would subtract household expenses, fuel, food, etc. from the balance. If it was a good week, we'd get to go to dinner at the Village Diner on Friday. That was big stuff back then. We either ate at home or went out to the diner as a family once a week, never more, sometimes less. We NEVER did fast food - that's a whole other story. But I'd never been in a McDonald's until I was a sophomore in high school. Other than the occasional Chicago 'dog fast food was not on the list of places to blow money.
After mom had figured out the budget, she would sit and explain it to us. No really. From a pretty young age, I understood housing, heat, food cost money. I understood that to obtain money, dad worked a job (sometimes two) and was paid weekly for his efforts. She was very honest with us about how it all worked. And I was totally annoyed and bored by the whole exercise. I watched her build their savings, refinance the house in the '80s having bought in 1976 at an interest rate of 10.5% (niiiice). It was what it was. It never occurred to me that she was teaching me. That I would actually use this training in my future life. She was a genious.
One of the things she did was create physical, white envelopes. On them were category names. Groceries, gas, beauty, medicine, etc. And in these envelopes she would put the cash that dad would take after depositing his checks. When the money was gone from a particular envelope but the need was still there, say gas for instance, there were only two choices. She could redistribute money from say, "beauty" over to gas and forego the beauty shop that week so dad could get to work and she could drive for groceries, or she could opt not to drive anywhere until payday. The moral is, they lived within their means and within their budgets. The most debt my mother ever had at one time was $3,000 and she was horrified. Afraid really. Debt made her lose sleep.
So, a few years back I was thinking - boy, that was a great way to do things. Cash, envelopes, having to choose. And then I stumbled upon Mvelopes. Someone created and online method to mimic my mother's genious! I didn't jump right on board. But about a year ago my friend Rach I think reminded me of it and this time we jumped in with both feet. And I love it. I feel accountable.
Literally, the program has envelopes, that you define. So, it takes a little work on paper first. You have to flesh out where you spend your money each month. You have to determine things that are both mandatory, and adjustable. For instance, we have mortgage. Obviously, until the house is paid for, that's a required monthly gig. But dining out...totally discretionary. After you set the envelopes up to mimic your budget, you connect your bank account and then begin to fund your envelopes. Then, as transactions come in, you simply drag the transactions to the associated envelope. (e.g., $73.00 King Soopers - you drag that to "groceries" and it will deduct the $73 from however much is sitting in the envelope giving you a balance). Say you went out to eat but didn't have enough in the "entertainment" envelope to cover the amount. The envelope turns red with a negative balance. Of course the goal is to not go in the red, but if you do...then you're left with the choices my mom had. Take money from Peter to pay Paul or overdraw. Ouch.
Its a wonderful visual and we seldom see red. It has forced us to really pre-plan, even dinners out. There's no more, "I don't feel like cooking, let's go out" on the spur of the moment. We know that we have x-amount funded each month in entertainment and approximately what it might cover. A family movie night, or a family dinner out, etc., but it makes us stop and pause if we already have something on the calendar ear-marking that money. Then it's back to choices, and stewardship.
We're pretty big fans of it. There's a GREAT budgeting book you can get through them, but a lot of the forms that they include can be found on line for free (start at MSN's money section)...we bought the workbook though and it helped us go through our financial life with a little order to it.
On the change. That's come at work. Since Frank had his dental surgery and we're trying to get into a really, REALLY solid financial state, I'll be staying for a while. But...I'll be making a move. I'm shifting over to state criminal focus instead of Federal and I'll be working with Laura and Bill, who actually recognize I can do a little more than filing. I do private investigation work for them here and there...and when I leave the company in June'ish I will continue to do that (accompanied by criminal photography work) as a freelance investigator to help pad the photography biz. So happy. The change is scheduled to take place January 16, when our department moves from the 34th floor to the 25th floor. Good solution to all. Greg has been in a funk since he lost the judgeship, and being resistant to change, he hates that I work only 4-days. I get that...but he's been pretty unbearable lately...so its time. Good change for us both.
omgosh Shay...I'm so excited for you, i've always wanted to be a private investigator. Lucky you...and what's even better you get to add photography! Wow, what a blessing, really I'm so happy for you, I hope it goes well for you :)
Posted by: Robin | January 03, 2009 at 11:05 PM