instead of a strict budget, we have more of a budget "goal." at the end of each month we reactively track our expenses and classify them accordingly to measure performance. for us this is less restrictive and fits our lifestyle. during the month we try to live frugally, but we don't change our actions because one bucket of the budget is empty. post-spending tracking gives flexibility with variable costs (like the price of gas) and yields freedom.
sidenote #1: we are not anti-credit cards. i agree with most of dave ramsey's advice, but credit cards can be a very useful and profitable financial tool if used properly. we have a capital one card (with a personal photo on it, ha) that earns a $50 walmart gift card every other month on average. by using our credit card on expenses, we get $300 worth of gift cards a year! there is no annual fee with the card and we make sure to pay it off fully every month.
sidenote #2: we love automatic withdrawal options. all of our utility bills, car insurance premiums, mortages, cable bills, even our tithes at church are automatically taken out every month (i can't decide if i like this last one, though. our church encourages people to give by direct deposit, but sometimes it seems to lose part of the heart of giving. however, the accountability of having it taken out every month and the heart of that decision to set it almost makes up for it).
we also automatically transfer money to parker's college fund and savings fund. we just switched his savings fund into a mutual fund because we were sick of getting minimal interest at the bank. any time he gets gifts for his birthday we put it directly in one of these accounts and enjoy watching them grow (oh and our names are listed as the account holders even though they are for parker--better for financial aid later in life!)
phew. this is getting long and i haven't even listed our budget categories. hopefully more on that later, although i'm not sure anyone is really interested in this topic or cares. james and i are by no means experts, but we've found a good system that works for us. and i can't do a post without a couple of pictures of parks...he can now open doors! ahh this was a scary day when he realized he is tall enough to reach the handles. and i love the next pic of him, even though i have no idea whose legs are behind him (at his friend abree's 1st birthday party some of her relatives were playing with parker). so cute!