Although this particular method of budgeting – using jars to hold all your available spending money for a week (or two) – might not interest everyone if you’re like me and you’ve hated budgeting because of the “budgeting” aspect 🙂 you might find this method appealing.
If it works on TV?
Here in Canada we get a show called “Til Debt Do Us Part”. Although this show is often geared toward couples who usually have something going on in the overall relationship area thanks to their “inability” to manage their finances, that doesn’t mean you can’t use this method for yourself.
Gail Vaz-Oxlade's Easy Jar Budget
The premise behind the show is to take couples who are in debt – and frankly, just watching this show a time or two will make almost anyone feel better about their own situation – and work on areas such as their spending habits, their relationship (communication, how they relate to each other, etc.) and how they can actually begin to get themselves more financially secure.
Some of the shows have been really out there – families earning $150,00 to $200,000 a year in debt so badly they will end up owing whopping amounts like $1.5 million in just 5 years time if they kept up their current methods of spending and management or lack there of. The unfortunate thing about some of the couples on this show is that they are a couple – no children! Usually, when I watch one of those shows, I realize more fully just how fortunate I am financially due to the fact that we have 5 children (4 living at home) and by the end of the show I’ll almost always discover some little tidbit of information that will help us tighten our ship a little more while still not feeling any worse the wear for it. Usually, one of our savings accounts will be the lucky recipient of even the smallest amount that I discover I might be able to shave off our overall spending without it hurting.
So, does this method of budgeting – using several jars to keep a certain amount of money in (according to the budget outline which can be generated here) really work? Well, if you are someone who doesn’t pay a lot of attention to the fact that you are using your Debit card, credit cards or even lines of credit (or over draught protection) as your own personal endless well – then definitely this method can assist you in really seeing how, why and where you are spending your money. The nice thing about this system is that it gets you off of the credit card or debit card mill and makes you accountable to your spending habits because a) you have to collect a receipt for everything you spend and b) you have to write down what you’ve spent, where, why and how much. It could also show you that “you are richer than you think”!
That sounds like a pain!
Naturally, for those who have not paid a lot of attention to their spending habits yes, this will seem foreign, bothersome, even ridiculous perhaps but unless you really love the hole you’ve dug for yourself (if you are struggling financially), then this exercise is well worth the effort if for no other reason than you finally see with your own eyes that you’ve been gorging on things like those specialty coffees, those endless reams of paper that make up the dozen or so magazines you pick up every week or if you are like me, you’ll see that by doing your grocery shopping in one trip rather than a dozen – you can actually make your money go a whole lot further.
So, how does it work?
First of all, you have to know what you earn as a household. Then what you are committed to paying (Fixed Expenses) as well as what your variable expenses are. The Financial Guru who helps people in this show, Gail Vaz-Oxlade, has a blog where she offers visitors a chance to begin to get their financial house in order. The budget program she provides is extremely easy to do. On her interactive Budget Worksheet you simply fill out all the necessary information and the worksheet then provides you with the amount you would put into each of your several jars for the week. It’s that simple.
You can then save this worksheet as an .xls file for use in Excel spreadsheets or do as I do and send it to print and thus save it in your OneNote program.
Gail Vaz-Oxlade "A Woman of Independent Means"
But does it really work?
My answer to that is an emphatic YES! In our home we’ve never really been in the habit of budgeting. Oh sure, every so often I would get the idea that it was time to take care of that little task but I never seemed to get around to it. Last year I decided it was time to take myself seriously. I took the time necessary to review where we were, how we were doing and where we could improve upon things and with all of this information handy, I headed over to Gail’s site. She offers a number of great ideas, suggestions and tips on how to become financially fit and almost all of them are very easy to do – but you have to do them! Just like anything, if you have a great idea but you don’t do anything with it, where does it really get you.
Our main trouble area was in the groceries – and yes, I consider myself quite fortunate that area was our worst financial oh oh 😉 We had this costly habit of impromptu dinner ideas and then rather than shopping for a full week (or in our case a full 2 weeks) we would simply run out to the grocery store and pick up this, that and the other thing. Usually spending about $40-$80 every trip, so you can see how that kind of practice would add up quickly.
When I actually did up our budget and used the Jar technique, I found that our grocery budget was pretty generous – something I would never have suspected given that we always seemed to “need” something we didn’t have in the house. Another area was our children’s eating habits – fast food this, microwave that, all foods which really added a lot of unnecessary expense to the budget. When I actually took the time to run through all of the “on sale” flyers that flooded our home and usually just went right into the recycle bin instead of being utilized, I really shocked everyone the first time I shopped this way. The house was packed with foods – the cupboards over flowing and the kids, well they were in heaven. The greatest benefit from this however, was that my children were eating healthier and actually began to appreciate the fact that shopping regularly didn’t have to mean shopping frequently. I think it was this single process that really got my family on the “jar budget” bandwagon immediately.
Take it to the next level
If you are someone who isn’t financially strapped all the time this system can still be a great way to manage your finances more optimally. You can discover all kinds of great things about your spending habits and the nice thing about making that discovery is you can find out where those areas are that might allow you to chop off excess spending and divert it to other areas – say for example an Emergency fund (you do have one don’t you?) or more toward a savings account for Vacations, for a new car, for new furniture…for retirement!
Make it a game
I didn’t have any resistance from my family when I decided to implement Gail’s suggestions, if anything I had a lot of interest from everyone, so much so that they all wanted to start their own Money jar system.
For us, the one thing we decided to do was to transfer any money left in any of the jars we have, over to a certain account at the end of every bi-weekly period. One period we’d choose our GIC account, the next it would be the emergency account, the next our vacation account, etc. Our reward would usually end up being a bi-weekly period of time when we would try to see just how much we could transfer over to one of those savings accounts without really “feeling” the pinch. It was sort of a game I’d play to see just how “thrifty” we could be on what we had available to us. The result? Well, let’s just say that for a family who use to bemoan the fact that we never had money available for things like a movie out, dinner out or a trip somewhere – now we have clearly seen that indeed we have had that available to us all along, we just never actually realized it because we weren’t paying attention.
Bottom Line
Unless you are someone who is really in debt a great deal and are really finding yourself struggling to make ends meet – Gail’s style of budgeting will allow you to do so easily and surprisingly, you may find that you have more money available to spread around than you realized. Even if you are in debt and are having a difficult time of things, her site offers you ways in which you can actually begin to see progress in your situation. Mind you, there may be some belt tightening that you might find a little uncomfortable at first or there may be the realization that a 2nd or even a 3rd income is necessary in order to really make headway – it’s all part of the importance of getting yourself financially ship shape so that you can begin to really enjoy your life without the cloud of debt and uncertainty hanging over your head all the time.
So…run on over to Gail’s site, do up the budget worksheet and discover just how easily you can make your money grow. I think you’ll find if you use this method, the journey will be as valuable to you as the end results will be. Don’t forget, this method of budgeting is an easy system you can also teach to your children – wouldn’t it be great to know that your kids are fiscally responsible and that they won’t have to struggle the way you may have had to? To learn more about kids and money or other topics, you can also visit some of Gail’s articles online.
Enjoy!
Lex
Where to begin! I'm just your average (ADD afflicted creative, all over the map kind of gal with each of my fingers and toes dipped into something different. I write, draw, paint, sculpt, airbrush, bead, knit and sometimes sew (although rarely, even though I have a brand new sewing machine) my way through usually blissful days.
Lexxia in Beta Mode 