The Budget Binder

Q & A

The Budget Binder

Hi Gail & Team! I am currently using your excellent system to manage my income successfully & I would like to try to live on cash. I would be ever so grateful if you could please give some tips & examples of the notebook system. You recommend it in "Til debt do us part" to keep track of what is being spent. Please show an example, explain in some more detail or recommend a site if possible. I would like to thank you for all your help. May you & your families be blessed with happiness, health & wealth. Thanx.

Donna (UK)

On the show we use a small three ring binder with loose pages. The first page has the budget amount that goes in each of the jars. Each of the subsequent pages is labeled for one of the jars. So there’s a page for Food, Transportation, Clothing & Gifts, Entertainment and Other, which includes stuff like pets, medical costs, bank fees, etc. (See Gail’s Guide to Building a Budget and Gail’s Interactive Budget to see what goes into the jars.)

Now that you’ve labeled each page in your binder (or notebook), you write in the first week’s amount. So, let’s say you have $100 a week for food, $120 a week for transportation, $20 for clothing & gifts, $40 for entertainment and $40 for other. Here’s what your food page might look like at the end of the week.

FOOD		Weekly budget: $100
Beginning of the week			100.00
2-Dec	Groceries	-45.00	55.00
4-Dec	Coffee	-2.25	52.75
5-Dec	Vegies	-35.00	17.75
6-Dec	Groceries	-15.50	2.25
7-Dec	New week	100.00	102.25

As you can see, each time you spend money, you deduct it from what you had before and carry down the new balance. So when you spent $45, you deducted it from $100, which left you with $55. That way you always know exactly how much you have to spend. No guessing. Dating it lets you see your spending patterns (are you going to the store too often?), and itemizing what you’re spending on (groceries, coffee, vegies,) let’s you see exactly where your money is going.

So, at the end of the first week, you have $2.25 left over. You can add it to your next week’s $100 (as I did here), or you can move all the extra you have at the end of the week into it’s own jar and use it for extras.

Careful though. Some of the jars are meant to accumulate money. For example, in the transportation jar, there’s money for both gas and car repairs. If you spend all the transportation money on gas, or move the money at the end of the month, you won’t have anything set aside when it comes time for an oil change.

Got it?