The thing with watching my money is, as with babysitting an unruly toddler, I have to watch it every minute of the day, or else it gets into trouble… quickly and unexpectedly.
As soon as I forget to record an expenditure or two, I feel things sliding out of control, like I’m in a trance of sorts. I have just enough self-awareness to realize I need to keep my finances tightly (obsessively) reined in until I’ve learned discipline.
I also realize that the “unruly toddler” mentioned above is not money itself, but my own reckless spending impulses.
I’ve recently cobbled together a low-tech money-management system, based on my own special set of sometimes-contradictory neuroses and several techniques I’ve read about elsewhere.
1. Budget Envelopes
When I (finally) got my last paycheck ($400) from THE PREVIOUS EMPLOYER WHO SHALL NOT BE NAMED, I skimmed $100 off the top and deposited it in my checking account. Boom. Gone. No touch.
I divvied up the rest of the cash in envelopes, earmarked for specific expenses: Phone (I’m good through the end of October), Gasoline ($10 a week for six weeks into the future), Food, etc.
I even budgeted myself $20 a week for miscellaneous expenses (“Week ending 8/24”, “Week ending 8/31”, etc). I organized the envelopes in an accordion-style file, and stowed it away in a safe place.
My mom always used to say that money burns a hole in my pocket, and I’ve come to realize she was right (about this, and about many other things, too). If I’ve got money on me, I will spend it. It’s so true to say “out of sight, out of mind”… if it’s not in my wallet, I forget it even exists.
2. Dollar dollar bill, y’all
Any loose change and one-dollar bills in my purse or wallet go into a jar at the end of the day… and forget I ever had it. Even if I throw only $1.50 a day into that jar, that will add up to: $10.50 a week, $42 a month, $504 a year.
3. Cooking the books
That semester I took Financial Accounting I wasn’t entirely a waste, because I’ve devised my own half-assed bookkeeping system, and it works for me.
I divided up a notebook (10 cents at Wal*Mart) with colored tabs. Each section is devoted to one area of my finances: Wallet (cash), Checking, budget envelopes (Gasoline, Phone, Food, Weekly miscellany).
Each time I spend money, or move money from one “account” to another (such as taking $20 from the envelope marked “Week ending 8/17″and putting it in my Wallet), I make a note of the transaction, and keep a running total for each category.
At the back of the notebook, I keep a weekly running total of all categories combined, so I have a snapshot of what I’ve got. Not the most professional system, but it works for me and makes sense to the way my mind works. That’s the most important part of any system– that it’s something you can do.
4. Keep a price book
I adapted this from Amy Dacyczyn’s Tightwad Gazette. I keep track of the prices I pay for groceries and other products I buy regularly. I’m getting to know exactly what things cost, and it’s making me a sharper shopper. How can you know what’s a good deal, when you don’t know what things normally cost?
5. Cash only
I have a debit card with my checking account, but I’ve found that (just as studies have shown with credit cards) I tend to spend more recklessly when I’m just swiping plastic at the register.
I try to avoid using my debit card, and make an effort to pay with cash as much as possible. Debit and credit cards make money unreal– disconnected and theoretical… but physically parting with cash is real– tangible and visceral.
I personally need to feel grounded in reality when it comes to money, and that means hard, cold cash. Otherwise, I will just space out and lose track of my finances entirely. Come to think of it, maybe that’s exactly why the powers-that-be encourage debit and credit cards. Think about those check-card commercials that show the lone maverick cash-payer slowing down the entire cashless-transaction-machine robot march.
Overall, the budget is pretty tight around here until school starts and financial aid kicks in. And believe me when I say I will be just as cautious with my grant, scholarship, and Work-Study money, as well!