Tips like these helped us pay off $127K in debt. You can read our story in Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After.
Welcome to Budget Tip Tuesday where we make personal finance personal. Hopefully these tips will keep your budget on track!
How is managing your money like shampoo, toothpaste and ketchup? Perhaps your thoughts immediately shifted to the need to coupon. Or maybe the need to stockpile everyday household items to save money in the long run came to mind. However, what if I told you that you should manage your money in the same way that you tend to these (and dozens of other) household goods.
Rewind time and think back to the last time you purchased a brand spankin’ new bottle of ketchup or shampoo. Or what about that last time you purchased your favorite carton of ice cream (Blue Bell Krazy Kookie Dough, is my fav. I’m still waiting for it to come back)? I’m guessing you popped the top and embraced life with gusto. Gosh darn it, your hair needed to be cleaned. Pbbbfffft. You squirted that bottle with everything you had in you, as a mound of hair-washing goodness piled high in your hand. Or maybe your burger was covered with more than enough ketchup for ten Whoppers. Your favorite bowl brimmed with delicious frozen dairy and sprinkles galore. And life. was. good.
But in a few weeks’ or months’ time, as the supply dwindled on all of the above, you began to manage it much differently. In fact, raise your hand if you’ve ever added water to the bottom of the bottle of dish soap/shampoo/bubble bath just to get the smallest part of what remained out.
Let’s face it, when reduced to a smallest parts, we are better managers of our stuff than we are when the shampoo or ice cream is flowing freely like milk and honey. The smallest bit is treasured, measured, and parsed out appropriately.
So what does this mean for your actual budget? How should this change the way you approach money? I’m certain that more than once I watched a paycheck or a bonus or gift money fly right through our checking account. I anticipated its arrival. I plotted and planned the ways in which I would spend it. And then confusingly enough, as quickly as it came in, it flew out without me even knowing what we had purchased or why.
It would be my suggestion for you to break down your dollars and cents into as many categories as possible. As soon as you deposit your check, either withdraw specific cash amounts or deposit percentages into other savings accounts. Money that sits in your checking account will be sucked into a black hole. I promise you, you will spend it. However, if you put stops into place, breaking your money down into smaller pieces, then you’ll be a better manager.
How much do you plan on spending on groceries this month? Withdraw that amount and place it in a cash envelope (Did you know I have FREE cute printable cash envelopesFREE cute printable cash envelopes?). Saving for a larger goal like Christmas or a vacation? Set aside a specific percentage that you’ll transfer into a set aside savings account with each paycheck. Whether it’s an HSA, a sinking fund for vehicle maintenance or a new car purchase, or your clothing budget, you’ll count your pennies with a greater attention to detail when they’re in smaller, manageable chunks.
In the comments, I’d love to hear how you make things stretch when they reach the bottom of the barrel or better yet in what ways you break down money into manageable chunks.
Gain inspiration to pay off debt! Check out Inspiration to Pay Off Debt: 30 Days of Encouragement from the Queen of Free
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What a great analogy!!! And great tips!
Thanks friend!
I must print these envelopes!!
They are fun!