Cake & Icing: A Budget Experiment

Cake & Icing: A Budget Experiment #31days of Greater

Have you ever heard of a cake and icing budget?

The cake is made up of things that are crucial and must be covered.

The icing is everything extra. Everything. Every month, you come to the table with needs and wants {like a hair cut or birthday gift}, and decide what the icing money ought to go to.

My parents taught me to budget at a young age, but as I considered the cake and icing plan, I realized that I tend to spend money that’s “in the budget” for a particular category if I know it’s there.

So for the last couple months, we’ve changed from a zero based budget {assigning every incoming dollar a place} to a cake and icing spending plan. We have saved more than ever before. It causes us to choose what we want our extra to go to and avoid the ‘well it’s there so I can spend it’ syndrome.

I’m excited because if an opportunity to help someone comes up, I don’t feel like I have to go against the budget to do so. I feel like I can do greater things with the resources we’ve got- just by shifting how we handle them a bit.

How does your family manage your money to allow for things like this?

PS I did some research before we switched and discovered this is also called a ‘spending plan.’ If you’re intrigued, these articles were incredibly insightful:

greater #31days of curating & blessing out of excess

Read more about Greater here.

PS The original image is via Style Me Pretty Living and their delectable-looking Funfetti Cake & Ice Cream recipe.

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  • Audrey @ Putting Me Together November 5, 2013 at 3:36 PM

    I’ve never heard of this, but this sounds more or less like what we do. We hardly spend more “just because” we have underspent and have money left over. Why spend the money if you don’t need to be spending it, you know? Like you’ve said, you can do so many greater things with it! :)

    • Caitlin Author November 6, 2013 at 7:51 AM

      SO true! I didn’t even realize I was doing it. After our conversation a couple of weeks ago, I went back and found the Earn 1K free stuff and have been working my way through it. Hello hidden fears and scripts! I’ve been looking at everything through that magnifying glass and this was part of that. Thanks for the great suggestion!

  • Selah November 5, 2013 at 9:30 PM

    I liked what the Wall Street Journal article said about planning ahead for irregular fixed expenses. We learned over the years to save up for expenses that happen infrequently, like quarterly auto insurance bills, or annual vehicle tax bills, or Christmas, etc. Instead of using emergency money or credit to pay for those things, I set aside a little bit each month, and save up to cover those bills I know are coming.

    • Caitlin Author November 6, 2013 at 7:52 AM

      Exactly! That’s something you don’t necessarily think about when you sit down to develop a budget or spending plan. Wise words, Selah!

  • Emily L. December 10, 2013 at 4:54 PM

    This really got me thinking!! We just started budgeting in August… and kinda became lax about it for a couple months. :-/ Try to get back into it…. We have separate budgeting sections for everything included eating out/ entertainment/clothing … I love this way of thinking! Not sure if it would work…. We may have to try it for a couple months… I tend to spend money that doesn’t have an allocated place… Sometimes I wish I was a saver and not s spender! David balances me out well tho, lol

    • Caitlin Author December 11, 2013 at 7:45 AM

      That’s great! It’s helpful to have spouses on opposite ends of the spectrum because it can help keep life fun yet money smart. :) Another good book I read lately is I Will Teach You To Be Rich by Ramit Sethi. He also talks about the conscious spending plan but gives some helpful tricks and goes deeper into using psychology to keep yourself from spending money. So far, the spending plan has allowed us to save more…honestly I feel like it has helped me label items better than our old budget.

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