Debt-Free Forever by Gail Vaz-Oxlade (the beginning after the end read novel .TXT) 📕

Add up each of the budget categories that belong in a particular jar.

• Groceries & personal Care : If you eat in a restaurant or order takeout, this is the jar from which the money must come; ditto if you buy diapers.

• Transportation includes gas, repairs, tolls, taxis, and public transportation.

• Entertainment is everything from movies to sports, book buying to newspaper reading … whatever you consider fun; if you buy lottery tickets or gamble, you’re wasting your entertainment money!

• Clothing & Gifts: This category is self-explanatory

• The Other jar holds the money from your budget that’s variable but doesn’t fit in any of the first four jars. It may include your children’s allowance, pet costs, and medical expenses. If you have school trips, they’d go in the Other jar. Ditto anything else that’s unique to your specific situation that doesn’t seem to fit elsewhere.

Let’s take Clothing & Gifts as an example. If you have $50 a month allocated for clothing, and $25 a month allocated for gifts, your total in this category is $75. Now you have to divide this monthly amount by how often you’re going to fill your jars. If you fill your jars weekly, you’ll put $18.75 a week into the Clothing & Gifts jar. Fill it biweekly and you’ll be putting $37.50 into the jar every two weeks. It’s a good idea to keep a small stash of coins handy to make change for the jar money. Don’t round up or down! That’s a sure way to throw your tracking off.

GAIL’S TIPS

My Interactive Budget Worksheet assumes there are 52 weeks in a year, so it multiplies the monthly amount by 12 and then divides by 52. This is perfect for people who are paid weekly or every two weeks. If you are paid twice a month, you may decide to fill your jars on the same schedule, in which case you would take your monthly amount and divide by two. If you like the idea of filling the jars monthly, the task of figuring out what goes in the jars is very easy.

You may have money left in the jars at the end of the month. Some of those jars are meant to accumulate. Let’s face it, if you have $25 a month for clothes, it may take a few months before you have enough to buy your kid’s new snowsuit. Ditto transportation, in which you accumulate your car repair money. Grocery money, too, should sit there for a while since there are big-cost items (think laundry and cleaning supplies) that have to be replaced on a less frequent basis. If you have money left over in the entertainment jar, either you’ve budgeted too much or you’re not having any fun. Fix that.

GAIL’S TIPS

People often ask whether they can transfer money from one jar to another. I believe a budget is a fluid thing—that it must adapt and change as your needs change. I also believe that how you use your money must be guided by the plan you’ve made, but that you must be flexible enough to adapt on the fly when things change. If you want to take money from the gift jar and use it for food, that’s your business, as long as you realize that you now have no money for gifts. More money will not magically appear (until you refill your jar), and so you will have to be creative for Aunty Angie’s birthday. Keep in mind that if you keep emptying your clothing category so you can go to the movies, when the time rolls around to replace your jeans, you’ll have to hit a thrift store!

KEEPING TRACK OF YOUR CASH

When you spend cash, it is very easy for money to disappear without a trace. You break a $20 to buy milk, and in a feat of trickery, the pocket monster eats the change from the $20. You have forgotten about the cup of coffee you bought on the way to work, the newspaper, the sandwich at lunch, and the $5 bill you handed your kid as he headed out the door for soccer. Never mind the toonie you threw into the catch-all in your car for your next cuppa. That’s the big problem with spending cash: money seems to disappear without a trace.

The only way to use cash and keep track is to

1.Get receipts for everything you buy (or write yourself one).

2.Write everything down.

Getting receipts is particularly important when you have more than one person using the jars since it helps everyone involved see where the money went.

When I work with couples, I give them a small three-ring binder with loose page79 which I call the Handy-Dandy Budget Binder. The first page is a summary and has the budget amount that goes in each of the jars. Each of the subsequent pages is labelled for one of the jars. So there’s a separate page for Groceries and Personal Care, Transportation, Clothing & Gifts, Entertainment, and Other.

Once you’ve labelled each page80n your binder or notebook, write in the first week’s amount. If you have $100 a week for food, here’s what your groceries page might look like at the end of the week.

Each time you spend money, you deduct it from what you had before and carry down the new balance. So if you spent $45 on food, you would deduct it from $100, which would leave you with $55. As you can see, you always know exactly how much you have to spend. No guessing. Dating it lets you see your spending patterns (are you going to the store too often?), and itemizing what you’re spending (on groceries, coffee, veggies) lets you see exactly where your money is going.

If at the end of the first week you have $2.25 left over, you add it to your next week’s $100. Remember, some of the jars are meant