So at this point I'm somewhat embarrassed to be introducing yet another strategy, but hey! Third time's the charm, right? Right.
We let ourselves live pretty freely last year, without worrying too much about a budget. After saving for the wedding it was nice to have a year just to relax. We didn't go into any debt, but we didn't put a whole lot into savings either. This year we're going to tighten it up a bit. I drew up a really detailed budget and we have monthly goals for each category. (We've actually made a big change this year and we're fully combining our finances. I started to write about that here but it made this post even longer, so I'll go into it separately, if anyone is interested.) Keeping track of how much we've spent is our sticking point. There are basically three options that you see most commonly:
Track spending with receipts. D used to do this and it drove me nuts. His half of the table was perpetually covered in tattered old receipts that he needed to either enter or confirm in Quicken. Now we only save receipts for things we might need to return and once the return date is passed we toss them.
Track spending with an online program, like Mint. In theory I love this idea and I know other people have had great success with it, but I'm slightly freaked out by the idea of handing access to all my finances over to anyone. I know they are supposed to be totally secure. It still freaks me out. We also weren't sure how well it would work with our joint/personal set up.
Give yourself a certain amount of cash and when it's gone you're done. This will never, ever work for me. If I have cash, it disappears almost instantly. I spend it in the vending machine on snacks I don't need. I buy random items at the drugstore when I'm walking past. I think it's because there's no record of it so I never have to admit I spent it. I hate putting charges of under $5 on my credit card, so I'll just resist those things if I don't have cash. I love my credit cards and I love the cash back rewards.
Instead, we're testing out a new system that combines the concept of the cash allowance with our credit cards. D designed little cards for us that will slip behind our credit cards. Each card has different denominations on it to represent the money we have to spend that month. The idea is that they function like punch cards, except that neither of us carries around a hole punch (which would be way more fun), so we just have to cross them out with a pen. Our joint card has our "entertainment", "groceries" and "household miscellaneous" categories on it while our personal spending cards just have our allowances. I've already budgeted for our set expenses (phone, internet/cable, hair cuts, etc) so those don't need to get recorded anywhere.
I do most of the grocery shopping so I carry the joint punch card and D brings home receipts so we can mark them off as necessary. I know, we're back to receipts! But it will be relatively easy compared to entering them on the computer.
Will this work? I don't know but it's the best idea we came up with, so we're going with it.
I'm terrified of our grocery budget because we currently spend at least 1.5x that much almost every month. I think we can hit it, though. Honestly, a huge portion of that excess is coming directly from our fancy cheese and alcohol consumption. I'm not going to cut those out but I am going to try to be aware of how they fit in our overall budget. We'll make up for it with lots of farmer's market eggs and veggies and judicious use of cheaper cuts of meat from suppliers we're comfortable with. I also bought a 10 lb bag of my favorite black lentils which D thought was crazy but he'll soon realize how genius it was.
If we can't hit it we'll re-evaluate. I'd just like to be able to put more money in savings and it seems impossible given LA rental prices and the fact that we'll be paying off our student loans for another 5 - 10 years.
And once again I ask myself, as I do every year, can we live without cable? And then I hear that Game of Thrones is starting again and I put it on the back burner. But if it comes down to Humboldt Fog vs. HBO, I think the cheese might win.
P.S. - Can I just tell you how grateful I am that we started this project in the shortest month of the year? We really need to re-calibrate our spending.