Paper Envelope Budget System
Before my wife moved over with me to China, I ate out at restaurents every meal. I was working like a dog and had little time to even eat let alone think about preparing a meal. When my wife came over with me at the end of October, we both expected to make some adjustments to that routine to both save money and eat more of the food we both enjoyed.
Throughout the month of November we made good progress - the first week we had purchased enough kitchen supplies to cook our first meal. By the end of the month we were geting into a routine to cook around 2-3 meals a week and order at least 1-2 meals a week to be delivered (to save money vs eating out).
However, we were both a bit shocked by the rough totals I calculated that we spent on food/dining out in November ~ $1,400USD. Its been a rough adjustment trying to keep track because in the US Im used to tracking everything via credit card purchases in MS Money, but in China we pay mostly with cash and have a difficult time keeping up with what it is spent on. That amount seemed very excessive. Back when were in both living in the US we would guessimate that we spent about $400-$500USD/month on food/dining out in total.
This would mean we were spending about 3x what we averaged in the US. Granted there are some explanations -- we celebrated Thanksgiving dinner at a restaurent with a special holiday meal, my wife was getting adjusted to China and I tried to show her some of the best places in the area, we starting stocking up on American packaged foods for future consumption, etc.
But still --- we both agreed that $1,400USD is too excessive. We needed to put in some controls to make sure going forward we are not spending that kind of money on food. We talked it over and decided to implement the paper envelope system.
The paper envelope system basically means you take your alloted budget for whatever (for us food) and put it in an envelope. You used that as a feedback mechanism so everytime you spend money, you have to take it out of the envelope -- you quickly get a sense of how much your spending and how much is left to last you the rest of the time.
We never liked or used that idea in the past because with credit cards it was too difificult to keep track and I could quickly see how much we were spending using MS Money. However, now that the vast majority of our food/dining out transactions are paid in cash this could work well for us. Add in that now there are two of us and just one pot of money, it should also help us communicate our spending better.
We decided to start with a weekly budget of 1,500 RMB or ~$210USD/week. Its still a lot of money, over $800/month, but much less than what we spent in November. As we bring our food spending down to a managable level we will continue to think about reducing our budget some more.
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