The Envelope System

Our family's budget is based on the envelope system.  This means that we pay cash for everything, from groceries to date nights.  At the beginning of each month we take out a certain amount of money for our envelopes.

My hubby gets two paychecks a month.  The first paycheck basically covers our envelopes, and his second paycheck covers our rent.  The envelope system can also work on a week-to-week basis, if that's the situation you're in.  You could even make an envelope for rent/mortgage if it suits you.

Proverbs 27:23Know well the face of your flocks; and pay attention to your herds.

Davey Ramsey suggests this percentage of income for households that make at least $3,000 a month: 10% to a charity, 10% to savings, 25% for housing, 5% for utilities, 10% for transportation, and 7% for medical expenses.  This will leave 33%.  Because this breakdown does not cover our monthly expenses (the ones that I can't control as much - - like rent and utilities), I have settled on this breakdown of our spending: 10% to a charity (tithe), 47% to housing, 2% to utilities (we are very blessed to be on a town electric company), 16% to transportation, and 25% to groceries.  This leaves no money left over, meaning that we have to stick to our envelope system.

We don't have any money in the budget right now for medical expenses (outside of insurance, which is taken out of each paycheck automatically), date nights, babysitters, or spending money.

1 Corinthians 16:2On the first day of every week each one of you is to put aside and save, as he may prosper, so that no collections be made when I come.

If you can, save save save!!!  The general rule of thumb is to first tithe 10% and second save 10% as soon as you get a paycheck.  I so wish that we followed this rule and saved money each month.  It's something that we're working on.  Unfortunately, I can't figure out a way for us to save.  We have the lowest rent we can possibly find (we live in a one-bedroom apartment with our little one), lowest electric possible, and we use the car as little as possible.  Our student loans are in deferment for economic hardship (if you have student loans and aren't making enough money, call and ask about an economic hardship deferment to get you through until you're making more money).

So, here are the quick and easy steps to utilizing the envelope system:

1. When you receive each paycheck, take out the cash.
2. Split up your money into labeled envelopes.
3. Use the cash in each envelope for its specified disbursement.
4. When you run out of money in an envelope, you have no more money for that expenditure.

Happy enveloping!!

Jobs, Jobs, Jobs!

What do you do when you need more money in your budget?  Look for a job!

My husband works full-time and earns enough money for our family that we aren't eligible for SNAP (Food Stamps).  Actually, we aren't eligible because he makes $300 too much a year.  A year!  In other words, we have $25 more a month than people who qualify for food stamps.

Needless to say, we have been looking for jobs.  When I had our son, I tried going back to work but after paying for daycare I was making about $40 a week.  Now that's just not worth it - - to have someone else raise my baby!  So I became a stay-at-home mom while my husband continues to work full-time.  Here are the ways that I contribute financially (my jobs):

• I plan the budget and make sure that we stay on budget.

This is one of the hardest jobs that I have!  Staying on a budget has never been something that I'm good at.  BUT because it is one of my main jobs, I can focus my attention on it and really try.  Reading blogs helps me a lot.  One of my favorite blogs is called Blissful and Domestic.  Danielle, the author of this blog, posted about Living on a Budget back in June.  When I read it, I found that many of the ideas presented in this post are things that we already do so I found it very encouraging.

• I grocery shop once a month, and keep us out of the grocery store otherwise (as much as possible).

Again, an idea that I found on Blissful and Domestic, we shop only once a month for groceries.  When we go to the grocery store more than once a month, we always spend more.  It's really hard at first (and we just recently started), but it's SO worth it!

• I work part-time

A great way to contribute to the household financially is to work part-time, either from home or when the hubby comes home.  When we first found out we were pregnant with our little one, my parents kept suggesting that either hubby or I work at night.  Although this is probably a great solution for a lot of people, I am confident that we made the right decision for our family.  I couldn't bear the thought of "never" seeing my husband... so I had to come up with ways to make money and still be home in the evenings.  These are the ways I came up with:
- I tutor in the evenings for an hour as soon as hubby gets home - - which allows me to be home in time for a late dinner together and bedtime.
- I became an Usborne Books & More Consultant.  This allows me to get books for homeschooling (eventually) as well as get out of the house and have some adult interactions.
- I blog.  Although I am just getting started with this, I'm hoping that it will become a source of income sooner or later.
- I work part-time at my church on Sunday mornings.  This allows me to spend time with my family on Saturdays (our church offers a Saturday night service) and my husband and baby to have some quality time on Sunday mornings until I get home.

• I look for recipes and cost-cutting ideas online.

Pinterest is great!!  I check it once a day, and try to spend no more than 30 minutes on it at a time (I don't want to be on the computer all day, and Pinterest can be addictive!).  I "follow" people who have similar interests as me, and I don't follow boards/people that are not going to be helpful to me.  The only things I pin are things I intend to use, and I often try things as soon as I pin them!  You can follow me on Pinterest here.

• I keep track of our bills, and whenever possible I pay them as soon as they come.

This is one that I still have some trouble with.  We're still having trouble paying all of our bills each month, until we start making more money.  But for those of you who have enough funds to pay your bills each month, it's a great idea to pay bills as soon as they come.

• I keep in contact with our loan companies.

Two months ago I had a lot of calls to catch up on, and my name actually went to collections because I hadn't contacted our loan companies in so long.  We haven't been able to afford our bills, but I had been putting off calling them.  But guess what?  It wasn't nearly as hard as I thought it would be.  The way it worked out, God really blessed us because my name was sent to collections.  That's what got the ball rolling on my Direct Loan, and what helped me to call the companies and defer my payments.


Praise God for hard times, because they help us to become better stewards of what He has given us!