Dedicated Expense Bank Account – Stay on Budget

by Joe on March 15, 2013

My wife and i recently reviewed our expenses and cash flow to see if our current budget structure is working for us. We realized that since we are not 10% using the envelope system it makes more sense to have a separate expense account, as we were spending more than the budget amount on items that seem necessary but not in the budget.

This is how it will work – we will sit down five days to the end of the month and create the budget for the coming month; including all things from toilet papers to tithes. Once the budget has been approved by both of us, we will deposit this money for the budget unto our new expense bank account.

This way any paycheck we get goes into our main family account, but all expenses are paid off from the new expense account. This is necessary for us to ensure that only things on the budget get paid for. If it is not on the budget it was not planned for and will not be paid for. Obviously, we have a little emergency kit for those unexpected occurrences, but this is a discipline that was long overdue.

Realizing the importance of tracking our expenses and creating great boundaries within the limits of our budget is a critical step to a debt free living, and we are so looking forward to the day that we will be debt-free.

How do you tack your expenses?

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