cash budget

One of our goals for 2010 is to get a handle on our budget.  Nic and I have always talked about setting up a budget, but we are all talk and no action.  Until now.  We have big plans for the projects we want to do, the savings we want to have, the toys we want to purchase, but kind of need a little cash on hand in order to complete/get anything.  Why does it always come down to money?  Normally we have been able to save up a bit of money, only then to have a car break down or to give in to an impulse and buy a toy before we really should...

In the beginning of January we began talking about trying out a cash budget. Our friends Ben and Debbie did this a few years ago, not sure how it worked out for them, but we decided to give it a try.  So we sat down and figured out what expenses we could really control and set a monthly budget.  {The bills that we can't really control will continue to be paid online (mortgage, insurance, phones, etc)}.  We ended up with the following categories for our cash budget:

Groceries

Household

Entertainment

Cars

Pets

Nic 

Kier

We give ourselves some fun money each month.  So if I want my lens, I am supposed to save up enough on my own before I buy it.  {Crap - this could take years!}  Since I drive so much for work, gas is not included in our cash budget.  At the end of the month, if any money is left over in each category, that is supposed to go into our savings account - that is besides the money that is set aside for us and the pets (we only buy pet food about every three months).

If we continue to stick to this budget, we will be able to save up quite a bit of money each year!  And this is on top of our savings in ING (to which we contribute to every week).  By May, we could should have enough money to actually start working on the basement instead of just dreaming of it!

The ultimate goal is to be able to live off of one salary with the other going into our savings.  I don't know if we will ever get there, but you won't know if you don't try...