The Budget

Planning is hugely important for anyone living on a tight budget. We’ve recently decided to try to live off of one of our incomes to put some money away before baby number two arrives in April, and while we’ve always been wise spenders, living off of one income is something we’ve not had to do in the past and it’s been a challenge.

Over the years we have tried different methods to keep ourselves on track. From self-made Excel sheets to the cash envelope system – I’ve finally figured out what works for us (and what may work for you, too). Here are some ways we stay on track. . .

Cash System
If you haven’t tried this yet, it’s worth ditching credit cards for 90-180 days to see just how much you spend each month. Trust me on this one. It may take a couple months of prep before you can do it, but feeling the money leave your fingertips rather than swiping a card it really effective. We utilize a small 12-section pocket file that I picked up from a local dollar store with labeled sections (food, gas, car maintenance, pets, house maintenance, date night, etc). I make sure each of us (my husband and me) has our own section for a personal spending allowance each month. Sometimes it’s only $20, but I think it’s important to allow for a random cup of coffee or lunch out with a coworker here and there to keep our sanity.

I also pay all of our bills by check so I can keep track of what’s going in and out of our checking account in real time each month. You could also utilize automatic bill payment through a checking account.

Not adding additional dollars to the envelope file once you’ve settled on your budget for the month is a real challenge, but I sort of look forward to seeing if I can come in under budget at day 30.

EveryDollar Tool
I came across this free tool in late 2016 and didn’t utilize it to its full potential until this past month, but it is great for budgeting. I’m a pen and paper gal so I like to physically see my plan laid out each month and that’s what this does. This is now where I input my budget for each of our cash envelopes as well as savings each month. It’s great to be able to go in and adjust your budget and allocate funds based on how much you’ve withdrawn from the bank as the month goes on. Don’t forget to include insurance, health care, or other expenses you may not pay on a monthly basis, but should factor for.

Meal Planning
I’m a disaster without a weekly meal plan – especially during fall and winter months when our garden isn’t full of fresh produce. While we once were spending anywhere from $120-$140 per week on groceries, I’ve now been able to keep us at $80-$90 per week (and that’s during winter months while still buying some organic produce and dairy) through meal planning. I always shop ALDI first for essentials and then grab what I couldn’t find at ALDI at other local stores.

Three-Day-Hold Rule
There are unexpected things we have to purchase out of necessity each month, but more often than not I have to remind myself the difference between wants and needs. I am notorious for going to a store and putting a few random non-essentials in my basket. I find that if I walk around the store long enough with those items, I tend to put them back on the shelf before I leave. I now apply this same principle to shopping in general. When I feel like I “need” something, I require myself to wait at least three days before purchasing. If I’m not pining over the object of my knee-jerk affection a few days from my initial need, then I simply wait until I have personal funds to cover it or I don’t buy it at all.

Holiday + Birthday Prep
Tracking your family and friends’ birthdays and setting a budget early on can keep you from ruining your monthly budget. I have overspent on birthdays and holidays in the past (like, really overspent) so this year I vowed to change my ways. I created this Gift Budget Sheet to keep track of the gifts I plan to get the people I love and set a budget for each occasion. Remember – gifts don’t have to be expensive (and certainly shouldn’t put you in the hole).

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