Around this time every year, I start to feel a little anxious about the coming year — specifically the finances of the coming year. By November, we’ve usually started talking about things like vacations we’d like to take, purchases we want to make, and savings goals we’d like to hit. We’ve submitted our pledge to our church. We know what our childcare expenses are going to be. But I don’t yet have a map of how it’s all going to fit together, and so I start worrying: will we be able to pay for everything we want to do? Will we have the money to take these vacations we’re talking about? Will we need to trim our budget, or will we get to expand it? I hate that anxious feeling. And I think that’s how I’d feel every month if I didn’t have a budget, because a budget is a plan. It reassures me that I’ve taken care of everything that I need to, and that if I stick to the budget, I am free to spend money without guilt, I don’t need to worry about paying bills, and I can rest assured that I’m making progress on all of my savings goals. I LOVE feeling like that. So this weekend, John and I sat down and made a plan for 2017. We do this every year, and I’d encourage y’all to try it, too! Here’s what we did. We started by setting aside about two hours, after June was in bed so we wouldn’t be interrupted. We opened up a fresh Google doc and copied and pasted the structure of our budget (formulas, categories, etc. – you can read more about that here). Then we started adding in numbers: First, we entered in any fixed amounts: numbers that we

Friends! Have any of y’all experimented with our Google Doc budget? I would love to hear if you have! If you haven’t, though, or never intend to, that’s okay, too — I know it’s not for everyone! The key to sticking to a budget is finding a system that works for you, and so, as promised, I’m presenting another option today. Or rather, my dear friend Nancy Ray is presenting another option — the one she uses. Take it away, Nancy! Hello friends! I’m excited to share, in my opinion, the most important key to our budgeting success. It’s called the Envelope System, and if you haven’t heard of it, just ask your grandma. She can probably explain it to you! Before the days of credit and debit cards (which really wasn’t too long ago), this was the most common and effective way to budget your money and give limits to your spending habits, and it’s the method recommended by Dave Ramsey, whom we’ve learned so much from. It works like this: After making your monthly budget, you fill your labeled envelopes with the cash allotted for each specific category. When the money runs out, it runs out! This creates a physical limit on your spending, and it helps pace yourself throughout the month. To better explain, here is an example of our current monthly Envelope System: Food: $400 The food envelope is the amount allotted for all of our grocery shopping and eating out. Some couples like to separate the two categories into two different envelopes – that is completely up to you. (I like to challenge myself each month: If I have leftover money in the envelope, then we get to eat out!) Household: $100 Household expenses include laundry detergent, lightbulbs, home repairs, paper towels, and other recurring

We’ve had a nice little break from Marvelous Money posts (maybe to let the first three sink in?), but they’re back in action! I thought before we talked about ways to track a budget, it would be good to address saving money’s other half: spending money. Yep, we’re talking about spending money today! [Keep in mind that we’re talking about spending money you’ve already budgeted for — I’m assuming you’ve already taken care of everything else in your budget (retirement, savings, etc.), and this is money you’re going to spend no matter what.] I firmly believe that how you spend your money is far more important than how much of it you have. Money can either be a powerful tool, or a source of endless frustration. I think the key to making money the former, and not the latter, is four-fold. 1. Figure out what you value. Sounds obvious, doesn’t it? We should spend money on things we value? We know this, but I think a lot of us don’t do it. The Starbucks example gets picked on a lot (you know, stop wasting money on your daily latte and brew coffee at home), but if the ritual of a morning cup of joe prepared especially for you truly makes you happy, then go for it! When you know what you value (whether it be security, family, convenience, heritage, adventure, and/or love), you will know exactly how you should spend your money in order to bring more joy into your life. 2. Buy more experiences and fewer material goods. John is a HUGE proponent of this strategy. And I think he’s right — people generally don’t reminisce about that great toaster they bought in the 90’s… they reminisce about the time they went to the Grand Canyon, or Aruba, or