Last night was the 3rd week of Financial Peace University (FPU). GJS and I decided we'd use some of our baby savings to enjoy dinner before class, which is provided at church for a suggested donation of $5 per plate. This was a small price to pay for a yummy meal that neither of us had to prepare or clean up after. Not to mention we've been literally subsisting on beans and rice for several days while waiting to go grocery shopping for February.
FPU starts with the leader giving some announcements and then the larger group settles in to watch a video of Dave Ramsey do Dave Ramsey. This week's lesson was on cash flow planning and using the envelope system.
GJS is all about using cash for groceries so that we "feel" the money. We have had a persistent problem of eating like princes at the beginning of the month and paupers by the end (hence the beans and rice diet this week). I'm really not willing to give up the cash back we get from using our Chase credit card. Some quarters we get back 5% on groceries. At $600 per month, that adds up. So we compromised. We'll spend around $40 per week on our Door to Door Organics box (fresh produce and other grocery items delivered to your home once per week) and around $88 per week at the grocery store getting everything else. Right after FPU we went to Meijer with our list in hand and came out with everything we wanted and spent right around $86. Hopefully having a weekly goal will help us stay even on our eating all month.
The other exercise we focused on was creating a zero balance budget. Again, GJS and I have been on this band wagon for a while now so we're already zeroing out each month, spending everything on paper before the month begins. The new part was the form used for this purpose. It was a list of all possible expenses and a place to put the cost of the item and a place for the new total once you subtract that expense from your total income. I think it is a great tool for those who need to see how it all works by hand. Mint.com isn't exactly like this but ultimately gets you to the same information.
Our homework for next week is to create our full budget using this form. Considering we have so few items we're spending money on, I don't envision this being too tough. The challenge lies in the columns for each pay period. We'll have to show where, after each paycheck, the money goes before the next paycheck comes along. It does make me think about the sinking funds we need to include for car repairs, clothes, hair cuts and the like. For now we just take those as they come during the month but it would be nice to put a little each months to each one and have those dedicated dollars available when the need arises.