You can have it all; you just can’t have it all at the same time. – Gail Vaz-Oxlade
Gail Vaz-Oxlade is a woman who does not take crap. Just watch her show or read her book, Debt-Free Forever. You may cringe at first when witnessing her sometimes crass, but always blunt honesty about other people’s lives—like the time she told a young couple that they are kicking babies out like kittens, an occasional bleeping out of expletives, or a whack on the forehead to an unsuspecting (but not undeserving) debt monger—but her ability to bring couples who are on the brink of bankruptcy back from the edge is impressive.
And Gail doesn’t just bring couples back from the edge so that they can live a mediocre life. She leaves them with a budget that, if they stick to it, will yield them close to a million dollars in retirement! The numbers vary from couple to couple, of course, but to be able to bring someone from $70,000 in the red of non-mortgage debt, to $1 million in the black by the time they retire is incredible. What is her true magic? In a word, it’s jars.
One of the first things that Gail does with a new couple is to take all of their plastic away (both debit and credit cards) and give them glass and paper instead. She sets a budget and allocates each category to a jar with a label of the weekly amount the couple may spend in that category. Categories include: Food, Clothing, Entertainment, Transportation, and Other. That’s right; Gail is a practical realist, so she doesn’t expect a couple to go without clothing or entertainment in order to reach their goals, she just expects them to spend much less than they are used to in these categories (typically $25 a month, though that is in Canadian money).
Couples are allowed to finagle these jars; for example, if you have an unexpected spike in food expenses one week, then you can take from one of the other jars. But she is also quick to point out that pet money comes from the “Other” jar, and so if you need to take a pet to the vet later in the year, you should build up a reserve to pay for that in cash from not spending all of the money in that jar. If you are using another jar to pay for another category, you might not get that reserve you need later.
I don’t know whether it’s the simplicity of the system, or watching others who are financially lost use these jars and come out to the light, but I love the idea of money jars for budgeting. However, my husband and I aren’t really on the level where we need to use the jars to budget our money, and perhaps you aren’t either. So, I had an idea to take this a step further and make it relevant to people like you and I. Frugal Decadence is all about making do with less and not compromising on what you would like, so why not use a few jars for some of your variable expenses throughout the month and see if you can’t tweak out extra savings from these expenses to use elsewhere…say to make sure you have $5 left at the end of the month to commit a Random Act of Kindness?
Or perhaps you have another goal in mind, like traveling to an exotic location, purchasing a home, or acquiring assets to make your money work for you. Make a poster or rip out a magazine photo that embodies your goal and post it above your money jars. Now your decisions to reach for money out of these jars will be anchored around a purpose, and you may find yourself with extra at the end of the month to put towards your dream.
Are you interested in reading Gail’s new book Debt-Free Forever? Leave a comment below for the two books that I have to giveaway. The winner will need to give to email me their address at frugalconfessions [@] hotmail.com (whatever address you are comfortable with), and I will forward this to Gail’s publisher who will mail you out a copy. Good luck!