Firstly, apologies for the long hiatus. A mixture of moving into our new house, getting the kids set up for school and general settling in meant it was impractical to keep the blog going on a regular basis through the summer. The plan from now on, though, is to write twice a week.
Now that we are settled into a more normal routine, we have set up a budgeting system this is how it works:
We have set ourselves a budget of $100 a day. This should cover all expenses except for large scale one off items (such as health insurance, property taxes etc.) but will be used for normal bills and any other expenses. We then keep track of the cumulative amount spent, negative or positive against that daily $100.
So for example during a day if we spent $20 on groceries, $30 paying a bill and $10 on gas we would be at +$40 for the day. The next day if all we spent was $110 on a phone bill then we would be -$10 for the day but cumulatively at +$30.
We then as a family have a system of rewards; once we reach +$100 we can go get ice cream (but the ice cream would “cost” $100, so we would have to take $100 off our total). Alternatively we could wait until we get to $250, which is a family meal out. We have a sliding set of rewards up to $1000 and the important thing is it’s a family decision when we take the rewards.
Conversely, if the number is negative no one is allowed any treats or frivolities, until we are back positive again. So no coffees at Starbucks, no buying books, games or new clothes. And only bare essentials from the grocery store.
After a couple of weeks this seems to be working well, we have the totals up on a whiteboard in the kitchen, so the whole family can quickly and easily see where we are at and what we need to do to hit the next reward.
Obviously there will always be large one-off expenses (which it didn’t seem fair to keep track of on here), but using the $100 day budget plus our knowledge (more or less) of what our larger expenses are should keep us on track to stay under our yearly budget based on our portfolio.