Wednesday, 25 January 2012

Cash Budgeting and cash envelopes

One of my biggest changes has been moving from never carrying cash to using a cash only system for incidentals, fuel, groceries, lunches etc though the month.  This means we draw enough cash out after pay day to cover the expenses (just, if we have enough) and then use the cash through out the month.
Inspired by Heather at Beauty that moves I made ones with the names on:
At the beginning of the month/end of the last month, we do all the math:
Lunches this is for school lunches – I work out how much school lunches  (£9.25 per week) and snack money (50p each per week) will be and put that amount in the envelople.
Fun – This basically covers the boys activities over a month – swimming lessons, (£4.10 per lesson), football practice (£2.50 per week) ,Beavers (£25 per term).
Fuel – We set aside a fixed amount for both of us each month, once I run out it is tough.  MadDad does get mileage for any additional mileage he does to and from clients, so that covers his additional fuel in a month.
Groceries – Again a fixed amount per week to cover it all.  I have found this has forced me to stick to my menu plans, to shop around, to make our own bread, biscuits and cakes.   I have also found that it pays to pop to the village butchers for my eggs as they are much less expensive and the local greengrocer for any veg we haven’t managed to grow.
We pay as many of our bills as we can by direct debit and keep a spreadsheet showing the expenditure.  I try to make as many presents as I can and we also make our own cards.
I am also pretty honest when asked about visiting soft play or a whacky warehouse type place, if we do not have any spare cash, then I say that we can not afford it this month, but I have cakes and coffee at home and you are welcome to come and visit me.
One thing I have learnt is that lots of people are in the same boat as me too and it is great when one of the mums sees you on the school run and says that chicken are half price in the co-op this week or such like.  People always comment that our cakes and biscuits are nice and that they just buy them, the thing is once you find a recipe that works, it only takes 10 minutes to make a batch of cakes with the mini’s and the costs is minimal.  If you need any debt management advice, or any help with managing your finances, then visit the experts at Debt Free Direct, where you can get all of the help that you need.


  1. Have you reviewed all your standing orders and direct debits? I did that recently and it lead me to going to a SIM only contract for my mobile which has saved £25 a month. We recently bought a freesat HD box so we have no expensive monthly tv subscription either.

    Often I find it's the money that goes out automatically where the biggest savings can be made...

    1. We went Sim only with MadDad's phone too and do a monthly DD review, as yes I am married to an accountant too!

    2. I have started a price book at work. We work within 400 yards of an Aldi and Tesco and a mile from Lidl. I compare prices and circulate the list.

  2. This brings back memories. When we got married in 1977 we budgeted on £30 per week using 4 jam-jars. £5 went into each jar, each week for clearing a loan, rates, gas, and electricity leaving £10 for food. On Pay day my husband came home with a brown envelope with around £33 cash, so we divvied up the money there and then.

    I drew up the menu plan for the week, and knew what everything cost at the supermarket.

    Can't believe I was ever so organised. Then he changed jobs and started earning a salary of £1800 and we thought we were rich!


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