Budgeting When Money is Tight: Part 5

I hope this series has been helpful for you in some regard!  I'd LOVE to hear what has been helpful, impacting, challenging, etc. during this series.  Leave a comment below if you want to share something!

Today we will be discussing a little more in depth the concept of Envelope Budgeting (found in Part 1).  Switching to envelopes can seem a little overwhelming, but rest assured, you will quickly get the hang of it!  If you've missed the other parts in the series, check them out here: Part 2, Part 3, Part 4.

How Do I Do My Envelopes?

If you are looking to get started with envelope budgeting but aren't sure how to break up the categories, I am listing below the categories that we use.  You can do an envelope for anything!  Plain white envelopes work great, especially when you are first starting and figuring out which categories you'll actually use.  Once you have established more permanent envelope categories, check out my homemade envelopes HERE to add some fun to budgeting ;)

Here are my envelope categories:

Grocery
Kids (includes diapers and their clothing)
Dates/Restaurants
Healthcare premiums
Car Maintenance
Car Registrations
Babysitting
Misc./Clothes
Ben
Jessica
Dr.'s Co-Pays
Special item savings
Hair cuts
Gifts

Some of these categories are small ("gifts" only gets $5-$10 per month) and others are big (grocery gets $400 per month, kids gets $40-$50 per month).  ALL of our spending is done this way, with the exception of our tithe, savings, rent, gas in our cars, and basic bills & payments.

I do have a set amount for each of these categories, however it does fluctuate depending on our income.  Certain categories are skipped in rough months (such as hair cuts, our personal money, gifts, and special item savings), others always get the designated amount (car categories, grocery, health).

In our case, my paychecks are devoted to our cash envelopes.  Every other week I sit down with my money book, write down all my envelope categories with how much I need to go in them, how much I actually put in them, and the running balance of each envelope.  I always make a note of any envelopes that got skipped due to a smaller paycheck, and I make sure to add the missed amount on the next cycle if the paycheck is better.

This is also when I redistribute any "left over" funds from my grocery category (I allow most other categories to just "roll" from month to month).  I'll take the left over funds and move it to either special item savings, a birthday party (if one is coming up), or pantry stock-up items.


Thinking of giving envelope budgeting a try?  Sit down with a pen and paper and write down all the categories that you'd like to include.  Write down how much each category will get, and how often (once a month with the full amounts, twice a month with half amounts?).  


This is the final post of this series.  I understand that there were things that I touched on that I have not expanded on...I will work on getting to all those different topics over time (coupons, drugstore game, etc.), they are just not a part of this series.  I hope this has been helpful, and I'd LOVE it if you'd leave a comment sharing something you learned, are processing, are going to try, or a tip of your own for the other readers.  Thanks!

Budgeting When Money is Tight: Part 4

Today is part 4 of my series: Budgeting When Money is Tight.  Like I've said before, we don't have it all together, and we are not professionals, but, we have been working very hard over the last 2 years to knock out our debt.  With Ben's recent knee surgery bills, we have been set back a ton!  We are continuing to work hard to be financially free, and I'm wanting to share the things that have best helped us over the last two years in hopes that it would be inspiring and encourage to you., too!  If you've missed the first three posts in this series, check them out here: Part 1, Part 2, Part 3.

Cutting Your Grocery Bill

Menu planning is probably the easiest way to start seeing a decrease in your spending at the grocery store without diving into the world of coupons.  And yet, for most people, it can seem so daunting and intimidating.  By building a menu plan before heading to the grocery store, you can maximize your time there, and avoid extra trips during the week, which can add a lot to the grocery budget (who actually grabs just the one item you went in for?).  If you sit down for just 15 minutes before heading to the store, you can feel prepared for both your shopping trip, and the rest of your week.

How do I get started?

Use your store circulars to build meals that utilize the items on sale that week.  I recommend choosing just one store to get yourself started.  If you regularly eat spaghetti once a week and pasta happens to be on sale, buy 4 boxes to last you the month....doing just that, you've cut your pasta expense for the month in half!  If chicken is on sale, do a couple chicken meals that week.  If it's ground beef, do some meals utilizing beef.  Think also about your days.  Do you have a day that will be really long and you won't have time to prepare dinner?  Consider a crock pot meal for those nights!

Once you have chosen your meals for the week (breakfasts, lunches, dinners, and snacks), write down all the ingredients for each meal.  Can you split one pound of ground beef among two meals instead of buying two pounds?  Plot out how much of each ingredient you will need.  Then, take inventory of what you already have and cross those ingredients off of your list.

I always re-write my list in a neat fashion, and if I have the time, I try to organize the list by aisle at the store (this helps me avoid going back and forth across the store-huge time saver when you're shopping with 3 small kids!).

Now, without even dealing with coupons, you can save money by going into the store and getting exactly  what you'll need for the rest of the week.  You will save money by avoiding "extra" items that aren't on the list, and you'll also be saving money by avoiding the store for the rest of the week.

Isn't that simple?  Now, you can of course get much more detailed into this process by using coupons, stocking up on sale items, going to multiple stores (or price-matching at WalMart), and freezer cooking meals that are super cheap, but this is the general idea for menu planning.

Also, remember, the fruits and veggies that are in season will be the cheapest (usually under $1 per pound).  You can use it as an opportunity to try new produce that you maybe otherwise don't usually eat.  Eat what's in season, and you'll keep that part of your budget low.

Check back tomorrow for part 5 of this series!

Budgeting When Money is Tight: Part 3

Welcome to part 3 in a series about some practical tips to budgeting when money is tight.  If you missed them, check them out here:  Part 1, Part 2.  Today I will present two more tips to help you as you begin saving money, living within your means, and Budgeting When Money is Tight!

#5: Tithe 

"Giving" is not usually at the top of most people's budgets when money gets tight.  Ben and I have always, without fail, tithed to our church body (the word "tithe" literally means "tenth").  Regardless of the difficulties we have faced over the years with finances, tithing FIRST has always been a priority. I believe God honors our faithfulness and obedience in this area.  How do I know that?  Well, even when there was no possibility of paying for all our necessities, God always provided for the missing areas in miraculous ways!  Every.  Single. Time.  We call it Jesus math.  The numbers don't always add up to us, so God must be working His own numbers into the equation!  Plus, nothing helps us break the hold of money over our lives quite like giving it away! 

Why would we tithe if we can barely meet our bills/payments?  Well, God has asked us to do this.  Being faithful to God is far more important than the numbers on my budget sheet, and the fear of "not having enough" is something that I want to stay away from.  Being obedient to Him is so important to us that this is not even a negotiable line item in our budget.  

Giving costs us something, but I've never met someone who was disappointed in their decision to give. Tithing is an action demonstrating that all we have is God's anyway.  Tithing is an important aspect in dealing with our money.

Do you tithe?  If not, I encourage you to pray and think about it!  Maybe take baby-steps to work up towards a full tithe... or, just jump right in.  Ask God to help you trust in His provision for your finances, and to have JOYFUL heart in giving!  



#6: Cutting Back

Don't freak out.  Breathe.  Okay.  Now it's time to look at that budget and make it all work!  When money gets tight, we often have to re-evaluate our budgets to make our expenses fit within our income. This will usually mean cutting back in some areas.  This will require an open mind and some creativity!

1. Groceries:  One of the best areas to work at cutting back is your grocery spending.  Did you know that in 2011, the average American family of 4 spent between $610-$1200 PER MONTH on groceries?!?!?!?!  Our family of 6 budgets $400 per month for ALL consumable expenses (including groceries, toiletries, dog food, paper/ plastic consumables, etc.).  Now, if you are anything like the "average" American when it comes to grocery spending, this may seem a little overwhelming to you.  Let me remind you that I indeed used to spend around $1000 a month, and have been working at lowering my grocery bills for over a year now.  It may take time.  Some ways to cut back in this area are: menu planning, using coupons, playing the "drugstore game", making items homemade, freezer cooking, and meatless dishes (I will expand and explain each of these at a later time).  Set small goals for yourself (try cutting your spending by just $10 a week at a time until you can adjust). 
2. Dates: Dates are an absolute essential to every marriage!  That being said, dates out can be expensive.  Factor in a trustworthy babysitter, dinner, and an activity, and the cost of your night out quickly adds up!  The good news is that this is an area that is very easy to cut the costs from.  Babysitting can be covered by a willing family member, or you can even trade babysitting nights with another family.  Dates can be relatively cheap if you purchase food/activity vouchers through sites like groupon.com, livingsocial.com, restaurants.com, and many others.  Be sure to sign up for coupons and deal alerts through your favorite restaurants.  Often times, you do not even have to make a purchase to receive a free dessert, appetizers, etc.  And finally, you can always pack a little treat and take a walk together to a local park to eat it together under a beautiful tree!  Totally free!  Be creative, and you can easily cut some (or all) of this expense from your budget.
3. Cable:  Whoa.  I know. That's a big one.  Ben said "no" to this option for a couple years before finally going for it!  If you aren't yet willing to give up cable, try changing providers or switching to a smaller, less expensive plan.  If you do cancel, you can always sign up for HULU, Amazon Prime, or NETFLIX for pretty cheap ($8ish each per month) and still watch most of your favorite shows and many movies for a fraction of the cost!  Sports programs are a little more difficult, but I'm sure everyone has a sports-fan friend who'd be happy to have you over and watch sports together!  (Read my post here about how we cut cable, save $800 per year, and STILL watch all our favorite shows).

These are just a few areas where cutting back is decently easy to do.  We have done all of these.  Getting your grocery bill down will take practice, but it is so worth it!

Think about the areas where you want to try cutting back.  Write down a list of goals, as well as some baby steps to help you achieve your goals.  Give yourself grace as you learn to spend less in certain areas.  

Head HERE to read part 4 in this series. 

(Updated 3/3/15)

Budgeting When Money is Tight: Part 2

Yesterday I posted about two ways to begin budgeting when your money is tight.  If you missed it, check it out HERE.  Today I will share two more money/budgeting tips that I believe are important and necessary to keeping track of your finances ESPECIALLY when money is tight.  I believe that regardless of our monetary situation, we should do well with managing our money, but when money is tight, we have to be that much more careful & thoughtful when it comes to our money.

#3: Keep a Money Book/Cash Journal

I am not so hard-core as to track every expense flowing from my cash envelopes, (though I'd like to be) but I do keep a "Money Book".  In my money book, I track how much money I had for envelopes, how much got placed into each envelope, the running balance of envelopes, and designated plans for any extra.  Knowing where any "left-over" money will go before you actually have any is important.  Is it going to be applied to debt?  Savings?  A special item?  Christmas?

I also track yearly/bi-yearly/quarterly envelope goals for my "sinking funds" envelopes (car registrations, healthcare premiums, hair cuts, car maintenance, etc.).  You can also use your money book to track "needs" and "wants", and write down plans for how you'll get money for those (Leftover grocery budget?  Selling items?  Babysitting?).

The final thing that I use my money book for is my list of pantry stock-up items.  I keep a master list of pantry items that I like to keep on hand.  When I have a little extra grocery money at the end of the week, it is *usually* assigned to re-stocking some aspect of my pantry (bulk flour, bulk oats, etc.).  Why do I believe my pantry items are important?  Well, when money is tight, you can always use those pantry items to home-make lots of homemade foods & meals!

You money book is just that- yours!  Use it to write down anything that may be helpful for you when it comes to money.

Try keeping a journal for a month as you try out envelope budgeting!  

#4: Define "Necessity"

I used to have a problem.  I "needed" an extra set of bed sheets.  I "needed" a new mixing bowl.  I "needed" new, better fitting, expensive jeans.  One day I realized that I didn't actually "need" any of those things.  Sure, it would have made my life more convenient to have two sets of bed sheets.  In reality, though, I learned that I could just do laundry promptly and have my sheets back on my bed within two hours.  It would just take discipline.

The items we declare to be on our "need" list, are often just wants.  Make a list of your needs, and sort through them, figuring out which needs are real, and which are just perceived.  I bet most of your "needs" will make their way to the "wants" list.  At least in my case, that proved true.

Here are some helpful questions in deciding if something is a need or want:

• Can I function without it?  
• Is it something to be used for health, safety, or other wellness necessity? 
• Is there another item that I already own that can be used in it's place? (i.e. if your cookie sheet is too old to use, do you have a pizza stone you can bake cookies on instead?) 
• Do I need this item for work, business, or another money making venture? 
• How often would I use it?  
• Does a friend or family member have something similar I could have or borrow?  
• Do I have money in the budget for it?

Many people live with far less than us.  Deciphering between our true needs and wants will help to avoid needless spending.  And when our budgets are tight, needless spending must go.  

Here's and added challenge: For one week, keep tally of every time you use the word "need" in relation to stuff.  This will surely bring your attention to the amount of things that our flesh feels the "need" to have, and hopefully this challenge will encourage a change of thought in this department!

Head here to read part 3 in this series and to learn more about budgeting when money is tight!