So you know ...
We choose to carry money in envelopes for those categories where we spend all throughout the month. The other categories are set amounts that are drawn directly from our bank account (like utilities) or those that we are able to pay the whole amount at one time.
Our envelope categories:
Gas: Jerry carries most of this, since he drives the most.
Grocery: This includes household needs such as cleaners and toiletries. I carry the bulk of this one.
Entertainment: You can have fun on a budget! Just remember, there’s no take out if there’s no money in the envelope.
Allowance: Yes, everyone in the Smart household receives a monthly allowance.
Gifts: It’s good to have a little bit set aside for birthdays, etc., that come up each month.
Grooming: Haircuts, etc.
Clothing: Just a small amount which doesn’t always get used each month.
Blow: This is a special category for those incidentals that come up all the time. It is not all the leftovers after all the money is allocated. It gives a little cushion for minor stuff.
All this seems very picky, I know, but you must account for every penny to be successful.
Marla on big expenses:
Many people ask how you plan for big things like new cars and expensive trips. We’ve learned there is a choice you have to make when sticking to a budget. Things must be prioritized. If you want to go on a big trip, you may decide to cut out or decrease your Entertainment fund. You may choose to eat more simply to be able to save on grocery costs. Then, you are able to choose where to put those savings. In time, you can buy that new car or go on that amazing trip using cash that you have saved.
— Marla Smart