Now I want to take a step back.  I have shared a bit about where my husband and I are currently with our budgeting (HERE and HERE) - a place that we have arrived through much trial and error but a place that has brought us the most reward and has helped make distant dreams a reality (more on that to come).

But if I was just starting my budgeting process and was told I had to make radical changes to my spending habits, I would become fearful and reluctant and discouraged.  That is why to this day I do not have a great exercise regime.  But whether is it dieting, exercise, paying off debt, saving, completing a degree, you name it, the goal can be accomplished with simple and small steps.

That is why I have taken a critical look at what methods we have tried over our years of budgeting as well as methods that other people have tried.  For one, I wanted to see what methods produced the best results.  But more importantly, I wanted to break budgeting down into basic and simple pieces.  I did not want to create a complicated, all-or-nothing budget plan that would send people running at the door.  Instead, I found manageable steps for creating and sustaining a budget whether you are just starting out or are seasoned at budgeting.  And that's "focused, weekly, cash."

I look forward to delving into the details of our budgeting process over the next several weeks and I hope that you will join me!

Follow my blog with Bloglovin

Weekly Progress and Savings

We had much more breathing room this week!  Despite the typical grocery run and a Target excursion (they might as well take my money at the door), we left the weekend with cash in hand.

And except for an unplanned late-night diaper run, the days went by without any spending on our part.  Personally, I think those are the best.  In our case, we are likely spending more quality time together at home - playing in the cul-de-sac or sitting on our back porch.

This week's savings: $40.00

So far we are averaging $30.00/week deposit into our "dream jar"!  Some weeks it's around $20 but some weeks we save as much as $80.  And that average doesn't include extra income such as the treadmill we sold. 

And don't get me wrong - just because we aren't spending constantly doesn't mean we aren't out-and-about and having fun as a family.   

This weekend's plans:

-Cleaning out the garage - good, free elbow-grease

-A friend's baby shower (bought the gift this past week at Target and didn't break the bank!)

-Trip to the Zoo (yearly membership purchased last year)

-Watching a free vintage baseball game with a picnic lunch (http://tennesseevintagebaseball.com/ and I know the guy that started the league...pretty cool, eh?  I'm easily star-struck)

And isn't that just the best picture ever!?  Pure joy.  And all while enjoying time as a family on the back porch.  Brings to mind the saying "the best things in life are free."

May we spend well and live well!

Do you have any fun and free weekend plans?

I Say Pay Yourself First...and Last!

I had this same little lion bank as a kid.  But no, saving it not a trap or a cage but is freedom!

Picture found at this etsy shop.

Over the weekend there was a USA Today article entitled "Don't laugh, the piggy bank strategy works" by Lewis Walker.  He states that "wealth starts with a goal, discipline, and saving a dollar at a time" - bringing the idea of a classic piggy bank to mind.  He goes on to say that "while piggy banks teach children the wisdom of thrift, adults often need to relearn childhood lessons. The best time to save money is when you have it. Excess debt can be ruinous." 

Yes!  And our "dream jar" is no different than a piggy bank.

Walker also mentions George S. Clason's 1926 book The Richest Man in Babylon in which Clason recommends that "when you earn money, peel off the top 10%, put it aside, save and invest wisely" (as paraphrased by Walker). [although this is just one of Clason's seven rules - another of which is control expenditures.]  Paying yourself first is not a new idea and is one that many people put to use (i.e. the 10/20/70 method). 

This article suggests that "paying yourself first" and prudently setting aside dollars in a piggy bank are mutually inclusive.  And suggests that setting aside a percentage each month is end-of-story regarding savings.  But in my experience automatically "paying yourself first" and being prudent with day-to-day expenditures are different actions and mindsets - but together they produce the best results.

Active v. Passive Savings

I categorize "paying yourself first" as a passive form of savings as it is a method that now is inherently non-cash based, digital, and automatic (think 401k contributions and internet banking).  In our budget, "paying ourselves first" falls under my "out-of-sight, out-of-mind" grouping (our budgeting method HERE).  Your paycheck is deposited, you transfer a percentage into savings, and you do so automatically without much thought -  which is what is generally prescribed.

But in contrast, I feel that prudently setting aside dollars in a piggy bank is an active form of savings that remains inherently cash based.  In our method, it is essentially "paying ourselves last."  Importantly, dropping a physical penny in a bank or dollars into a jar requires a choice each time - spend this or save this?  But with automatically setting aside a percentage each month, the whole point is that the decision is not burdensome and that saving is automatic.  Personally, we grew comfortable and lazy when only "paying ourselves first."

Paying Ourselves First...and Last

So we now "pay ourselves first...and last" and have seen the best results from doing so.  Paying ourselves last being saving dollars from our weekly cash budget to drop into our "dream jar," in addition to automatically placing a percentage of our income into savings each month.

Some weeks we do need our full cash budget and that's okay (see HERE - that is why it is budgeted after all).  But some weeks we simply do not and that is when we can save and "pay ourselves last."  By paying ourselves last, we are making saving a priority from week to week which necessitates prudent spending.

Once we can budget the full percentage upfront, we will move onto the next goal - again saving dollar by dollar through "paying ourselves last."

The Mindset Required

And the frugal mindset that is made habit by paying ourselves both first and last should serve us well through each savings/giving goal.  The motto being that we live off the least that we can while saving the most that we can.  Finding ways to save and come under our weekly cash budget is always a top priority.

As opposed to the attitude of we have paid ourselves first and are now free to increase our lifestyle/consumption equal to what remains of our income.  This is the thinking the we had fallen victim to in the past.  We had paid our percentage, box checked, out-of-sight and out-of-mind and were okay with spending the rest of our income.  But in our experience, only passively saving did not make for a truly prudent heart.  And we weren't making big strides toward reaching our financial goals.

Do you also pay yourself first and last?  In your experience, do these promote different mindsets?