I seem to have finally hit on the one method that works for both of us because our budget cards were a total success last year (printable versions shared in this post). Except for a short period of time in December when I attempted to hide from the cards because we were in the midst of moving + the holidays and all we were doing was eating out and then going to Ikea to buy things and also drinking more than usual in a vain attempt to make ourselves believe that packing and unpacking boxes could be fun. That was a dark couple of weeks.
We're continuing with the cards this year because they work and I don't have a better idea. I try not to draw attention to them in real life because they make me feel like a dorky third grader. Our friends who are aware of them have teased us a little this year but when I check out our results I feel completely vindicated.
We didn't touch our long term savings despite some temptation. That depressing dip in September was when we were hit with two expensive car repairs within a few weeks of our scheduled vacation. I wish I could bill the city of LA for potholes, but apparently when you hit one and manage to jam your braking system it is your fault because a pothole is considered a stationary object. True, but somehow it seems unfair. Our short term savings (car repairs, vacations, etc) never got up any steam but our other accounts are headed in the right direction.
I've rejiggered our budget for the coming year to account for changed circumstances. Downsizing to a smaller place gave us some breathing room, some of which will be set aside for Circe. This was the main reason we decided to find a less expensive apartment. Circe is generally healthy but having a dog inevitably means vet bills (or, at a minimum, purchasing dog food and weird anxiety reducing shirts). We set up a savings account that's earmarked for pet expenses and automatically deposit $100 a month. Of course, one serious vet visit can wipe out a year's worth of savings, but at least we'll be cushioned a little for the routine stuff.
I also gave us a little more spending money and increased our short term savings contributions. I clearly hadn't put enough in short term savings last year because we were constantly wiping it out and it was becoming clear that at that level we'd never be able to go on vacation again. I made (very) small increases to our retirement and long term savings. I try to follow the balanced money formula to preserve our quality of life and that means no more than 50% on needs, up to 30% (and no less than 20%) on wants and at least 20% on savings. Our current budget stands at 43/26/30. Depending on how you categorize things I might be overestimating our savings. I lump our student loan payments into savings when I suppose you could call them a need. You have no idea how rich we'll feel when we're finally done paying off student loans. Having the percentages to aim for has been hugely helpful to me when writing our budgets. Left to my own devices I tend to feel guilty about spending money but having a sanctioned 20 - 30% for spending makes it easier for me to justify. Sure, we could save way more if we cut it out but my goal isn't to be filthy rich at 70 years old while having denied us any vacations for 40 years. My goal is to win the lottery and stop budgeting, obviously.
Our first budgeted holiday season left us scrambling a little so for 2014 I set up yet another savings account* that's specifically for Thanksgiving + Christmas expenses. I based the goal amount on how much we spent this year, added a little extra and then broke it into monthly contributions. I'd originally just figured we could use our short term savings but HA! there was definitely no money in there after our unexpectedly expensive September. This extra account will make next year easier.
We're in kind of weird place financially. Not nearly enough savings to consider a house purchase, but enough that maybe we should do something other than let it sit in the bank? I think this year I might try to do some research and figure out what our strategy should be.
Disclaimer - As always, when talking about budgeting, I am fully aware of how lucky we are to be able to stress about self imposed limitations. Not having enough money to eat out as often as we'd like or buy as many nice clothes as we would like is hardly a reason to cue up the tiny violins. I admit that a certain amount of self pitying teeth gnashing sometimes occurs at the end of the month but it's the difference between eating boxed mac and cheese vs. eating Humboldt Fog, and neither one is the same as going hungry. We take our self imposed budget seriously, but knowing we have money in savings is what makes it possible to look at it as a game instead of a constant state of stress.
*All of our mini savings accounts are through CapitolOne, formerly ING. I like how easy it is to set up multiple accounts with automatic deposits and D and I can easily share access.