Friday, June 7, 2013

No, wallet! You're on a diet

**I had some scheduling issues with this post, so I'm sorry for the delay!

Over the last 5 years we had accumulated debt, life happens, naive/ poor financial decisions occurred and before we knew it, we had debt.

Within the last year however, we have been able to start smashing away our debt as our circumstances have improved, and directly due to smashing away our debt, our circumstances have improved further.

I want to share with you all the methods in which we went about trying, in the hopes (and eventual result) of eliminating our debt. This will be my last post for a while covering debt deleting tactics, as I now turn my attention to other areas whilst still staying relevant to a budget.


Finance Binder: Attempt 1

I put a very basic family finance binder together back in 2011 in the hopes of better controlling our debt repayment, and whilst my intentions were good, I didn't always remember to refer back to the binder and as a result we would overspend or pay something late which in turn made us spend more due to late fees.

I had basic categories such as a calendar (monthly), a list of all our debt, contact details for each company and a plan of paying off our debt (starting with the highest interest rate.)

I decided a binder just wasn't the greatest option for me, as it was so bulky, I often kept it in a drawer and forgot it was there.

Cash Envelope System

The cash envelope system in a nutshell; designating a set amount of funds to different areas of your budget such as; fuel, food (groceries, takeout), personal (haircuts, hobbies). Putting a budgeted amount of funds into each category, opting to use case instead of your debit/ credit card. Once the cash is gone from a category, you would then wait until your next pay, when more funds are allocated. 

The Hype!
David Ramsey has made this type of system largely popular again, with sites such as Etsy now stocking Cash Envelope Systems, making it easier to be in control of your money, and avoid losing it to overspending.

Back in February I did a post on how to make your own Cash Envelope System. To date, I have made 2 CES's, neither of which I am currently using. The first one I made just wasn't long enough to house my notes without having to fold them and the second CES is too bulky to lug around in my handbag.

The Verdict!
I do intend however, on making a new CES and trialling it out again as I believe this system holds great potential in areas where we would otherwise overspend on our debit cards (especially on take away!)

My first attempt at a DIY CES

The Second CES I made

Finance Binder: Attempt 2

The Hype
I love the blog ABFOL so when I discovered Toni was doing a budgeting series, I was thrilled! I was hesitant at first to purchase the printable set that was available with the series as the previous efforts with a binder didn't work out very well. However I knew this was a great time in our debt repayment 'journey' to try something such as Toni's Series so I gave this a shot.

The Verdict
The printable's worked great. Just about all sections of the printable's were relevant, and I found it very easily to follow (bonus!)

I often refer back to this binder, however my most important tool in our debt repayment has been my Filofax.


Filofax as Finance Manager

I blogged about this here. This is my current system and so far I have found this is the best system.

The best thing I could say about having my Filofax Domino as my Finance Manager, is that I am able to carry it with me in my handbag! So if I have a quiet moment whilst out and about, I can write down any spendings/ earnings for the day and keep everything relevant (and of course, recorded!)


Verdict

For me using my Filofax Domino (in personal size) has been the greatest approach in managing not only our debt repayment but also our everyday spending. Generally on a Sunday I will go onto our online banking and make sure that the credit/ debit amounts associated with our accounts are matching the ones that I have manually entered in the Filofax.


Do you have a system that works best for you? Filofax, Binder or Digital? Feel free to share below.

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Until Next Time,




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