So I was visiting a few of the blogs listed on my blog roll and came across this post over at Get Rich Slowly.

I’ve been working on my budget lately and trying to develop one that works for me – a lot tougher than you think. I’ve debated moving to a cash only or envelope system, but I don’t know if I would be able to do it. Maybe I’m just afraid to commit to a set amount – but it seems like you can’t really make solid progress unless you are willing to make a commitment and just stop when there’s no more money in that envelope. Sure it seems to be common sense when written, but I can’t help thinking that it’s a lot harder than it sounds.

Anyway, in his post he mentions the book, The Only Investment Guide You’ll Ever Need and the percentage breakdown that the author lists.

So I started to wonder what my current savings and debt payment percentages are:

Savings: 7.7% of monthly salary (including 401(k) it rises to 11.68%)
Debt: 39.6% of monthly salary

The debt makes sense since I’m trying to pay it down and therefore I guess the savings being so low makes sense too. I think it would be counter-productive if my savings % was anywhere near my debt %.

Has anyone else taken a similar look at their budgets?

So, towards the beginning of the year I had actually made a smart decision. The decision was to wise up and follow through on something. This particular idea was one that I usually think about after I’ve completed my Christmas shopping and analyze just how much more debt I have piled on. Begin saving for Christmas by setting up small automatic deposits to a separate account and then when it comes time to buy gifts there is money waiting.

So, again, I actually did it and so now the goal is to stick to the budget. Now, interestingly enough today I read an article on CNN/Money that was about just that…

It was titled, “Top Tips: Debt-proofing Your Holiday” and it lists 4 tips. Now it’s a Gerri Willis article, so it’s already pretty short, however I’ll quickly sum it up (and toss in some of my own thoughts) anyways.

Tip #1: Get Organized

• Two-thirds of Americans didn’t bother with a holiday budget last year
• Almost three in five don’t plan one this year (both from Consumer Reports)

Some financial planners recommend you don’t spend more than 1.5% of your annual income on gifts.

Again, proud to say that I’m already doing this and only by coincidence am I almost close to that 1.5% mark. I saved about $600 for gifts by putting aside a little each paycheck. 1.5% of my net annual income is slightly over $700. Personally, I would like to sock away about $1000 just in case anything and anything left over would be rolled into an additional credit card payment.

Tip #2: Think outside the box

You don’t always need to spend a ton of dough on presents. Think about curbing all those last minute gift impulses by giving a donation to charity in the name of your friend or relative.

Don’t get me wrong – I’m all for charity – but there is something that just doesn’t sit right with me when I think of sitting down to exchange gifts with someone and giving them a card saying money has been given to a charity of my own choosing in lieu of a gift. That option just isn’t for me – sorry if I seem shallow or insensitive. I gave to my church and to St. Jude’s Hospital regularly in past years (reduced/ended contributions to focus on debt), I just wouldn’t do it as a gift.

I’ve also tried spending to set spending limitations with people – didn’t go over well, so that ended that. It’s not that they didn’t understand that I didn’t have money to ‘go crazy’, it’s that they didn’t want to be limited in what they could do/give me. Again – it’s more ‘keeping up with the Jones” , but it’s embarrassing to be given such gracious and sometimes expensive gifts when you don’t have something in kind to offer.

Tip #3: Compare Prices

You can save time and money by shopping online. Plus, you won’t be tempted by all those “Impulse” purchases at the store.

To do some comparison shopping, go to shopping.com and bizrate.com. These sites let you compare products and deals. Plus, if you do decide to shop online, you can often get free shipping.

I’m doing most of my Christmas shopping online – it’s easier to keep track of my spending and compare prices. However, I definitely don’t think it saves you from impulse buying. The impulses are still there and in some cases stronger.

Tip #4: Get the best reward card

If you don’t carry a credit-card balance from month-to-month and you have a good credit score, getting a rewards card that pays YOU back is a nice way to get something back from your holiday shopping.

…yeah, no comment. ; )

Today, when reading the introduction to the 7-day spending challenge on Bankrate.com, I began to think I was reading a story written about me…

“I was trying to go from Monday to Monday,” says Vitale. “I carried a little notebook and would write it down if I stopped for coffee or went to the drugstore. Wednesday night I went to buy gas and I didn’t have enough cash. I had to resort to my credit card to get me through the rest of the week. I was shocked and a little disappointed.”

So, I’m going to subject myself to the 7-day challenge and document it on COD (that’s Climbing Out of Debt by the way).

…do you know “Slippage” is not only an actual word, but an Investing term that means, “The difference between estimated transaction costs and the amount actually paid”?

Anyway…that has nothing to do with my post…

I didn’t know that when I titled this post “Slippage” – because, to me, it refers to having a lapse in motivation. After making my daily check into some of my favorite personal finance blogs, I came across a post by “Well-Heeled” detailing her loss of motivation.

I don’t see this as a bad thing.

I left a comment on her site with a quote that her post reminded me of – “it doesn’t matter how many times you fall, what matters is how many times you get back up”. I truly believe this.

This stuff is tough and doesn’t promise to get easier. If it were easy it wouldn’t be that great of a goal. I think it’s okay to have set-backs once in a while. Hell, if it wasn’t then I’d be in trouble.

For instance, I went “over budget” because I’m a guy and didn’t really plan ahead for Valentine’s day – so I needed to dip into some funds that I had set aside for something else. S*it happens – and you have to cope and recover.

It’s a long road, but the journey is one we’ll all be better for I’m sure.

I began with a quote, so I’ll end with one – this time from a movie that I’m not even sure if I liked (Vanilla Sky), but the quote has stuck with me.

“The sweet isn’t as sweet without the sour”.

Hang in there, Well-Heeled. You (and I) will be back on track in no time.

Is it good software?

Sure.

Could it help someone trying to create a budget and allocate their money?

Absolutely.

Is it for me?

Not really.

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Nothing against Mvelopes or their format, but I just don’t think I’m going to be going on past the free trial. It’s just an extra step and I think could be more useful to help a family or at least a young couple with their budgeting. Since it would be helpful to have one place that lists how much money is left in a specific envelope without always having to have “a talk” with someone.

But I’m a young guy – basically just starting out – and I think my duel-bank account system is going to be more effective for me, since it will practically run itself.

Then, once my day-job begins to pay slightly more (and there have been some great personal/career developments lately – so hopefully it’s only a matter of time). I will split my direct deposit so that I can continue my two bank system and let my money take care of me.

After seeing a few blog posts about Mvelopes, I’ve decided to give their program a shot.

The reason for this is that I see how it would be useful to have specific buckets (a.k.a. Envelopes) in which to plan for certain things that may occur either throughout the year or throughout the month. What I’m skeptical about is how easy I will find it to be.

While the program does link to (most) all your online accounts, it doesn’t physically transfer any money for you. So it’s really just a fancy way of telling yourself that you only have X amount to spend on Y this month.

Like I said, I’ve decided to give it a shot and take advantage of the free 30-days to see if I like it and if it makes any difference come my next pay period.

Like always – I’ll keep you posted.