At age 60, it was strongly encouraged by my children that I should set up a budget for my household. All of my bills are paid on time each month and I seldom need to use a credit card, so I wasn't too sure about needing an actual budget. After asking some questions it was suggested that I use an envelope method like http://www.daveramsey.com/ suggests.
Setting up my categories has been tough for me because I couldn't decide if groceries and miscellaneous should go together or be separated. Should I put animal feed for the horse and chickens in the same category with dog food since I purchase dog food with my groceries? See what I mean?
I made my categories, labeled my envelopes and filled them with the set amount of cash. Here is what this old timer has found: I can't remember to take my envelopes with me and keep the cash separated so it's back to the debit card. It is just hard for me to break old habits so the following is what seems to be working for me:
I went to my computer and opened the program "Excel". I made categories just as I would for envelopes. I made one column for a spending catagory, another for the amount budgeted monthly, another with the amount spent and the final for the balance left for the month. I am keeping ALL receipts and post them in the proper category.
What I am finding is that I spend more than I thought in some areas, and less in others. By the end of February I should have a really good idea where every cent of my money is going. I'll let you know how this is working for me as time goes on.
Meanwhile, isn't it time for you to know where your money is going? If you haven't started a budget for the current year, then stop and do it today. I wish I had done it sooner!