We're going on four months since we started our new budgeting system. Now that we've had time to let it sink in, I wanted to share our progress.
Retirement contributions have been mindless. Basically after we set up our Roth IRAs with Vanguard, that money is spoken for. I don't "count" it when reflecting upon our income since it's already accounted for.
Prior to our joint banking, Ben was contributing to his Roth, but not maxing it out (you're allowed to put in up to $5,500/yr a person). He's a lot happier now knowing that he's taking full advantage of the Roth IRA.
The savings account is growing. Woohoo! In addition to retirement contributions, we're currently putting over 20% of our post-tax income into savings. This is a big goal for us. The downfall with our current savings plan is that it's just a "lump sum" account. We don't have individual accounts for a down payment, vacations, etc.
While we know how much money we're able to save in a year, so far we're not on track to have that much money in our savings account at the end of the year. Some of our savings has gone towards recent trips (Denver and Duluth). We have no qualms about taking trips or funding them, but moving forward we need to decide how much money we want to spend on travel and if we want a separate account to fund it. For now, when looking at our savings outlook, I've been taking 10% off of our total planned annual savings amount for planning purposes.
Spending has been going surprisingly well. The envelope method for groceries, fun money and eating out is working well for us. We've had a few times where our envelopes were empty but we still decided to spend or maybe go out for dinner and spend more than what was in our envelope, but in general visually knowing how much money we have available to spend on certain items has been a huge wake up call and worked well.
If we're out and we buy something, but don't have our cash on us, we'll put it on the credit card, but both make an effort to come home and immediately take cash out of the designated envelope and move it to the "spent" envelope.
Every two weeks I go the ATM to "fill up" for the two weeks ahead. If we have some money in our "spent" envelope, I'll use recycle that money for the upcoming weeks; then the money that's in our checking account is used to pay the credit card. (We don't pay on the credit card once a month. Our goal is to never have a balance on the card so we pay immediately as we spend).
Having an allowance has been working for us also. Even before we combined our account, I never let myself have free range of my money. However, now I'm even more in tune with my spending and available cash flow. There's been a few times when I had major items to buy that I hadn't account for, such as new running shoes and a bridesmaid dress, which I dipped into my personal savings for. But that money, similar to our savings, was money I was saving "just because" with no true plan other than to us when needed (of course, it'd be better to spend towards a downpayment than shoes).
It also has made us both appreciate each other's financial decisions a bit more. If we want to grab a drink but are out of "fun/eating out" money and one of us offers to cover the cost with our personal allowance, it gives you a little bit more appreciation for one another.
Overall I think revamping our budgeting system has brought attention to our spending habits together as a couple, verses just me trying to keep track of things and plan. It's a great feeling to know this is something we both care about and are working on together as a team. It took a while to figure out which accounts to put how much money into and when, given that we're each paid two a month but on varying dates. Now knowing this much of this check goes into savings, etc, our system is in place and moving forward.
Tell me, how do you handle your money?