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First off, raise your hand if you like to budget.
No? Didn’t think so.
Unfortunately with life, comes bills. With bills, comes needing to afford said bills. It’s so easy to spend money without a thought now that everything is plastic, so it is so easy to go overboard.
How do you save and even make a savings for a rainy day?
We follow this easy, effective system to budget our money wisely.
It’s call the jar system
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How to use the jar system to budget money
Take 1 jar for all your various bills. We have a rent jar, electric jar, gas, groceries, internet/tv, you get the picture.
Figure out how many times you get paid within 1 month. For us, we have a joint account, so we take each monthly bill, and divide it by the 4 paycheques we have per month.
For example, we pay 74.99 for internet + tax. So divided over 4 paycheques is 21.50. So every time we get paid, we go to the ATM, and take out 22 dollars, and that goes into the internet jar.
If your rent is 900 per month, every time we get paid we would take out 225 dollars and stick it in the rent jar.
So we do this with all our major expenses. Anything left over is thrown into the savings, or spending money.
Why the jar system is effective
We find this effective because
- We are physically dealing with cash. Therefore, see what is coming in and going out.
- The money is physically out of our bank account so we can’t accidentally overspend money that we need to pay off our bills.
Just remember to put the money for your bills back in before they come out of your account!
Because we have to live frugally with a debt to income ratio, we find this really good to ensure we have the money to pay our bills. The money we have is out of sight, out of mind until it needs to go back into the account
It can be a bit of work to put the money in jars then back into the account, but we find this way we aren’t spending what we have, so it is worth it!
What suggestions do you have for budgeting money? Comment below!
See also: Essential money savings apps for Moms