let's talk about money: envelope budgeting system

I've been lucky enough that I've never had to worry about money. yes, I've had times where I was limited in what I could spend until the next paycheck rolled in. but thanks to my parents through college and landing a well-paid job after, I've always been able to afford everything I need and most of what I want.

but even now in Taiwan as a single-income household, we are fine. better than fine. we've been able to save, pay more than the minimum on Husband's student loans, and [as you may have noticed] still be able to travel. we don't spend an outrageous amount on frivolous things. sometimes we splurge on food at the import store, or buy an entire tv series [ahem, Parks and Rec] on iTunes. but for the most part we have been trying to cook and eat at home, and not waste money on things we don't really need - and will have to be shipped elsewhere when we leave Taiwan.

this past week Husband and I have been doing some serious thinking and planning. I've mentioned before that we will be traveling back to the states this summer [and traveling all around once we are there.] we are also planning a trip to New Zealand next Chinese New Year. those will both be pricey, and need to be saved for. but there are also things like IRAs and our safety savings and someday children that we'd like to plan for too. and so we decided it was time to actually pay attention to what we're spending.

we sat down and went over our income and our savings goals, and came up with a budget that should help us tighten up spending but [most importantly] is also realistic. with all our dedicated saving and expenses accounted for, we should still have a few hundred dollars per month in case we run into anything unexpected. and if not - more for savings!

we decided to use the envelope budgeting system to help us keep track, and I taped some labeled envelopes with our cash to the wall. [I might try to make something more cute later on, but we're starting this this. please excuse my sloppy handwriting.]

each month, we will withdraw the cash we need and place it in the monthly envelopes. then every week we will withdraw from the monthly stash and add to the weekly. the main reason why we are allowing "flex spending" across weeks is because... Costco. one trip to Costco lasts us most of the month, but costs about a week's worth of money.

our main cost is food - groceries and going out to eat. our goal is to only eat out once per week, but with a set money amount we could possibly get two meals depending where we go and if something has rolled over from the last week. gas for our scooter costs about $4 US each time we fill the tank [maybe once per week] so we decided to lump that into our miscellaneous category. included in that will be non-food things, trips to Starbucks, and other "fun" things.  I should also mention that our rent is covered by the school, and our utility bills have direct debit so neither of those categories are noted. what we are listing below is just for what we will spend in cash.

taking into account our current income, savings goals, and cost of living in Taiwan, we settled on the below weekly budget:

groceries: 3,000 NT [about $100 US]
going out: 1,000 NT [about $33 US]
miscellaneous: 1,000 NT [about $33 US]

some of you might find this highly ambitious, others may think we aren't really scaling back. I know that plenty of people out there live on less than this. and we could totally be saving more. but this is the amount that [we hope] will still allow us to live comfortably while still achieving all of our goals for saving, and then some.

this budget has been in effect for about 4 days, so I'm sure I can't accurately say that it's working yet. since we started halfway through the month, that means we plan to spend only 10,000 NT until April. that would be about $330 US.

I've certainly been paying more attention to what we're spending. I admit that I had a panic attack while making a list for Costco, but it turns out I spent less than I had feared and we won't be living off the dregs of our pantry for the next week and a half.

last night I had the urge to go out for a bottle of wine and a bag of potato chips. it helps to think of the scenery of New Zealand, or all the tasty tacos I'll east this summer in California and Texas. [actually. that just makes me more hungry.] I didn't go, but our miscellaneous fund is still intact for this week, and I have high hopes of some sauvignon blanc gracing my fridge this weekend...

I'm curious: do you use a budget? what tips do you have on saving money? help me out!

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