Monday, November 3, 2008

A new budgeting method and a new shopping method

I've talked before about our envelope budgeting method, where we divide our paycheque up into various spending categories, (or "envelopes"), and then spend exclusively from those. The method itself has been working remarkably well, and I've decided to take it one step further. My husband gets paid twice a month. What we have been doing is budgeting each paycheque as it arrives, and funding different things out of each cheque. One would go to fund our spending envelopes, and the other went to debt repayment and savings. We also get the Universal Child Care benefit from the government, which would randomly get assigned to whichever envelope needed it (usually groceries). While I really liked our overall budgeting method, I was a little dissatisfied with the haphazardness of it. After reading up on a program called You Need a Budget (YNAB), I was intrigued by one of their rules, which indicates you should always live on last month's income. So, basically, you allow your income to accumulate in your chequing account for the month, and ignore it. Then, at the end of the month, you total it up, and make a budget for the following month based on the amount you already have in your chequing account. I was attracted to the idea for two reasons: One, it means I only have to handle our budget once a month! And you know I'm all about simplifying. :) And two, it really streamlines the process. Instead of budgeting based on each bit of income, I get a full picture and can budget more accurately for the entire month. While I don't plan on purchasing the YNAB program (my Quicken pseudo-envelope-budgeting is working just fine, and as they say, if it ain't broke...)... but I do like the rules imposed by YNAB, particularly the living-on-last-month's-income one. So we have implemented it starting this month, and so far it's going great! On the last day of October (the day my husband's 2nd paycheque of the month hits our account), I totalled everything up and made our budget for November. I then left just enough in our chequing account to cover our automatic payments for November, and transfered the rest over to savings, which is where our "envelopes" live. The process will begin all over again this month.

To go with our new budgeting strategy, I thought I would also try a new shopping strategy! I've mentioned here about my usual grocery shopping strategy. Using Handyshopper on my Palm Pilot, I simply add items to our "need" list as we run out of them. Then, on Friday nights, my husband and I sit down and and make a meal plan for the upcoming week. I then added any fresh items that we would need for the meal plan, and Saturday morning I would go off and do my shopping. Although this has been working well, I've really felt that I could improve on it. It seemed rather pointless to pick up one or two cans of diced tomatoes each week as I used them up, when I could instead pick up 6 or 8 to last the whole month. Same goes for things like rice and pasta... why pick them up in dribs and drabs throughout the month, when I could buy enough for the whole month? I've toyed with the idea of once-a-month shopping before, but for various reasons (mostly because I couldn't wrap my head around the planning of it), dismissed it. But now, with the weather getting colder, and a new baby on the way, the idea is sounding more and more appealing. I normally make several stops each week (the bank, the hardware store, the health food store, the grocery store, the drug store, the farmer's market, etc...). Only having to do all of that once a month makes me feel warm and fuzzy, especially with temperatures hovering near freezing, and having our first snowfall yesterday! So instead of just marking on my list what I would need for the coming week, I went through my entire house, and made my best estimate of what I would need for the whole month. I took inventory of everything from toothpaste to light bulbs. Then on Saturday, I did a marathon, exhausting shopping trip. But it feels SO good knowing that I won't have to do that for another month! I plan on doing it the first Saturday of every month. I don't expect it to be perfect the first time around. I'm sure we'll run out of things before the month runs out, but I expect that to be part of the process, and we'll improve each month, adjusting quantities as necessary. I'll then only have to do a quick weekly trip for fresh dairy and produce. I'm even thinking of revising my meal-planning strategy. Instead of planning meals first, and then buying fresh produce, I'm going to do it the other way around. See what's available at the farmer's market, and then try to be creative and plan meals around that, in combination with what I have purchased for my pantry. Obviously this will only work while there is still produce available at the farmer's market, but I'm really working on eating as locally and as in-season as possible. Over time, I plan to replace my farmer's market purchases with things I grow myself, and preserve for the winter. That will ultimately eliminate my need for the weekly farmer's market run. Our ultimate goal is to be as self-sufficient as possible, and I feel that once-a-month shopping is moving us closer to that goal.

5 comments:

  1. Sounds good! I love playing around with that sort of planning.

    Jennifer

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  2. I love the OAM shopping. I just started doing this several months ago after reading so many blogger moms doing this. Several nights before the end of the month I sit down with my meal list and list off 25 meals and all the missing ingredients I need. I also list all the prep work involved including desserts and goodies. After the BIG shopping trip I spend several days cooking and baking and that is it for the month. Not only do I not have to shop I barely have to cook. It is alote of work but the next 3 1/2 weeks are worth it. Good luck and keep us posted on how this is working for you and your family. I hear you on the NS power, we are in NB and it is just as bad.

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  3. Niki,
    Thanks for commenting! I'm SO glad to hear that this is working for you, and that I'm not completely insane for trying it. lol. I'm assuming you still go out for fresh things each week? Or do you buy it all at once and cook it up? What kinds of things do you make? I'm assuming you freeze them, Once-a-month-cooking style? My mother-in-law recently asked me if I'd like a small deep freeze for Christmas, which would actually make this possible! Does your husband hold down the fort for a couple of days so you can get all of this done? (I barely have time to cook ONE meal in a day, let alone 25. lol). Sorry for all the questions - I'm intrigued! Maybe I'll hop over to your blog and see if you have any tips over there. :)

    Alissa

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  4. Another strategy to saving money while shopping is to shop in bulk with friends.

    “Buddy shopping” is all about the “power of two” for cost-effective and strategic warehouse club shopping for the Holidays. We work with BJ’s Wholesale Club and more members are shopping together to save together while taking advantage of the benefits of bulk and multi-pack savings. In addition to their own coupons, BJ’s accepts manufacturer’s coupons – the only warehouse club that does – that allows for multiple coupons to be redeemed on multi-packs of “individual for sale” packaged items. An example would be: BJ’s sells a 2 pack of mouth wash that is normally sold and packaged as individual items in other major retail stores; you could use up to two coupons on this type of packaging in addition to many other items – and then split the cost and items in half between shopping partners – for even more savings.

    Items great for divvying up include paper goods, toiletries, produce, meats, candy, cookie and muffin variety packs, juices, soda, bottled water, soap and cleaners…just to name a few. By splitting big packages, Holiday shoppers are also spending less per item than if purchased at a local grocery store (more than 30 percent over supermarket prices).

    Besides savings on money, time and gas, shopping partners can finish off the “savings experience” with their own kitchen-side “packaging party,” to divvy up the purchases and then settle back knowing they’ve checked off their lists with the best savings possible.

    Happy Shopping!

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  5. This is a great budgeting method!....as long as you can not touch the checking acct during the month or you will tap into next months budget money!..

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