Posted: Jun 15, 2009
dwend | Posted: Jun 15, 2009
This web site works great for anyone doing the Total Money Makeover. Here is what I did:
Make one category for every single line in my budget: House Payment, Home Repairs, Water Bill, Dining, Groceries, Blow Money, Debt #1, Debt #2, etc. each one is a category.
Set Budget limits on each category. You do this under Tools/Spending Limits. I actually only put a limit on the discretionary spending categories, like dining, entertainment, blow money etc, so, for example, I didn't put a limit on my Mortgage category.
-Delete the credit card account
-One emergency fund account (Savings type), if you are at BS2, initial value is $1000 or $1000 + interest
-One checking account
-One cash account (I used this for all my recurring envelope spendings)
-Create accounts for Lump-Sum Payments
*I created a lump-sum Gifts, House Repairs, Car Payment, etc
Now at the beginning of the month (or after payday) you can transfer money from your Checking to your Lump-Sum payment accounts. These can be Cash or Checking- If they are checking, your checking balance will just reflect a smaller amount, because some of that money is already allocated to a lump-sum account. It works really well! I keep my car repairs account in a cash envelope, so I just withdraw that money and put it in the envelope, so my Car Repairs account is set up as cash.
The envelopes work like this: Say all your envelopes (Dining, Groceries, Entertainment, etc) total out to $500. Well when you withdraw your $500 from your account, you simply do that as a transfer from Checking to Cash. If you wanted, you could even make an account for each envelope.
Hope that makes sense.