Irregular Income Budgeting

Last week I wrote a series of posts on Budgeting. I had two readers write to ask me how to go about doing this if you have an irregular income. I found the following at daveramsey.com and thought I'd post it in case it helps you. 

From Dave Ramsey: If you're among the many Americans who are self-employed or working on commission, your somewhat unpredictable income makes it tough to create a budget. But that doesn't mean you don't need one! No matter how you get paid, you've still got to stick to a plan so your irregular income doesn't get out of control. Even if you don't know how to budget, we'll show you how. You can't use that excuse anymore!
First, start with the Monthly Cash Flow Plan budget formMonthly Cash Flow Plan Budget. This step helps you figure out precisely how much money you need each month in order to cover your four walls (food, clothing, shelter and transportation). Once you understand that budget form, you can move on to the next one, the Irregular Income Planning form.
In order to fill out the Irregular Income Planning budget formIrregular Income Planning Budget Form, take a look at your first budget. List each item according to its importance. The most important item on that plan should be your first item on your Irregular Income Planning form. Pay that item. The second most important item should be listed second on the form. Continue the list in this way, ordering from most important to least important.
When filling out the form, remember that how much you need for the item goes into the "amount" column, and the running total (starting from top to bottom) goes into the "cumulative amount" column. For example, let's say that food is on the first line, and you need $250 a month to feed your family. The amount you need to pay, $250, would go in both the "amount" and "cumulative amount" columns. The second line has gas with $150 per month, which means that $150 would be listed in the "amount" column. The total of those two columns, $400 ($250 + $150), would be listed in the "cumulative amount" column.
Continue to create your Irregular Income Planning form in this way until every spending category is listed on your budget. From this point on, when you receive a paycheck, take the amount and spread it out to the items on your budget, starting at the top and working down. Your check may not cover everything that is listed. That's okay. Use it to pay as much as you can. Then, when your next check comes in, pick up where the last check left off.

Good luck! Love y'all!

That old familiar feeling....

Image Credit

 For the last week, I've posted daily about budgeting, saving money, making better choices, not using credit, learning to live on less, etc. Let me speak openly here- I don't write about these things because I have it all figured out. Nope. Not at all. Not even a little bit.

I write about these things because they are areas that I'm working on, too. God has been speaking to my heart about them and I'm trying to share what He's teaching me with others. I've done really well this week about not spending money that I didn't need to, and have been keeping a 'spending journal' to track where my miscellaneous money is going. But the other night, that old familiar feeling struck.

You know the one I'm talking about. You see someone wearing something really cute, or you see someone with the latest technology device, or maybe it's someone driving a brand new car, or maybe it's someone who is eating out at your very favorite restaurant. For me, it was a bathing suit. Sounds ridiculous, right? We had met some family friends at a local outdoor pool and ran into one of Marcus' old girlfriends. That's fun, right? Just where you want to be when you run into your husband's old girlfriend. A public location while you're wearing a BATHING SUIT! But to make it even better, she looked FABULOUS. She had on a really cute, trendy bathing suit and looked trim and fit. I sat by the pool wearing my modest one piece that I've had for about 4 years, and suddenly felt insecure. As much as I hate to write that here for all the world to see, it's true. I quickly said to Marcus "I need a new bathing suit. Seriously". His tried to reassure me that I looked nice, but at that point there wasn't much use in reasoning with me. I was stuck.

Ever felt that way? It was like I felt like I HAD to have a new bathing suit so that I'd be 'good' enough. So I'd LOOK good enough. Friends, let me tell you- that is nothing but a lie from Satan. God says that we are good enough, just as we are. We don't need to have ANYTHING or ANYONE to validate us and make us accepted apart from Him. God reminded me of this today during my quiet time when I read Matthew 6: 25-34 (from The Message)

"If you decide for God, living a life of God-worship, it follows that you don't fuss about what's on the table at mealtimes or whether the clothes in your closet are in fashion (this one really slapped me upside the head!). There is far more to your life than the food you put in your stomach, more to your outer appearance than the clothes you hang on your body. Look at the birds, free and unfettered, not tied down to a job description, careless in the care of God. And you are worth far more to Him than birds.

Has anyone by fussing in front of the mirror ever gotten taller by so much as an inch? All this time and money wasted on fashion- do you think it makes that much difference? Instead of looking at the fashions, walk out into the fields and look at the wildflowers. They never primp or shop, but have you ever seen color and design quite like it? The ten best dressed men and women in the country look shabby alongside them. If God gives such attention to the appearance of wildflowers- most of which are never even seen- don't you think he'll attend to you, take pride in you, do His best for you? What I'm trying to do here is to get you to relax, to not be so preoccupied with getting, so you can respond to God's giving.  People who don't know God and the way He works fuss over these things, but you know both God and how He works. Steep your life in God-reality, God-initiate, God-provisions.  Don't worry about missing out. You'll find all your human everyday concerns will be met.  Give your entire attention to what God is doing right now, and don't get worked up about what may or may not happen tomorrow. God will help you deal with whatever hard things come up when the time comes. "
Matthew 6:25-34 THE MSG

We've all heard this passage many times, but somehow for me, when I read it in this translation, it was like I was hearing it for the first time. I hope it blesses you as it has me.

Love you all!

Budgeting Week Post #5- So why does it matter if I honor God with my finances anyway?!?!

"Don't hoard treasure down here where it gets eaten by moths and corroded by rust-or worse- stolen by burglars! Stockpile treasure in heaven, where it's safe from moth and rust and burglars. It's obvious, isn't it? The place where your treasure is, is the place you will most want to be, and end up being...You can't worship two gods at once. Loving one god, you'll end up hating the other. Adoration of one feeds contempt for the other. You can't worship God and Money both". Matthew 6"19-21, 24

Does God really care about how we choose to earn and spend our money? YES! In fact, money is mentioned over 800 times in the Bible. 800 times! This was the second most mentioned subject in all of God's word. But yet we hardly ever hear it discussed in our churches or Small groups. Why is that? Dave Ramsey says it's because we don't often realize what a problem managing money is for the average family. Look at these statistics:

-

1. Marital Problems - 37 percent (the highest rate) of marital problems derive from financial situations
 

In fact, 33% of CHRISTIAN marriages are now ended in divorce and money problems are the #1 reason!
2. Cash Flow - 70 percent of all consumers live paycheck to paycheck, meaning they run out of money before the end of the month

Can you see why this is an issue that God cared deeply about us understanding and one that we need to get under control quickly?

Although we are all clearly told in the first commandment that we are not to have any gods before God (Ex. 20:3), many of us have made money a god in our homes and lifestyles.

Jesus, who knew the human heart and walked among man, also knew that money was an issue. In fact, two-thirds of the parables that he told deal specifically with handling our finances! Don't get me wrong here, the money and the 'stuff' isn't the problem, but the money and 'stuff' can be a SYMPTOM of the problem. He constantly warned us to guard our hearts against greed, covetousness, ego, and pride, because these are the tools that Satan uses to control and manipulate this world. "He said to them, ‘Beware, and be on your guard against every form of greed; for not even when one has an abundance does his life consist of his possessions’ " (Luke 12:15). 

Crown Financial wrote the following: Finances - our spiritual barometer
A definition of "faith," according to Hebrews 11, is trusting God totally. It means trusting God for things you cannot see or manipulate into happening. Most of us truly desire to be able to exercise this faith, but the world around us tells us to do just the opposite. If you don’t have the money for what you "need," borrow to get it. If it’s too expensive for your income, so what? You deserve it; besides, you have to stretch yourself if you want to be successful in this world.

God’s Word tells us to learn to be content and dedicate ourselves to serving God. In Hebrews 12:1 we are told, "Let us also lay aside every encumbrance, and the sin which so easily entangles us, and let us run with endurance the race that is set before us."

How and for what purpose God uses money (from Crown Financial's website)
Money is neither good nor bad: it is merely a medium of exchange. It is the misuse and abuse of money that cause the problems.

Because God is so good, He uses money for our benefit in several different ways.

1. God uses money to strengthen our trust in Him. It is often through money that God can clearly and objectively show us that He is in total control, if we will trust Him and accept our positions as stewards and managers of His possessions (see Matthew 6:32-33).
2. God uses money to develop our trustworthiness. This principle is important because our lives generally revolve around making, spending, saving, and using money. If He can trust us with money, He can trust us with greater responsibilities and His true riches (see Luke 16:11).
3. God uses money to prove His love. Scripture tells us that God assumes the responsibility of providing the basic necessities for everyone who trusts in Him (see Matthew 7:11). By transferring all money to Him, He often uses money to meet those necessities of life.
4. God uses money to demonstrate His faithfulness. Moses reminded Israel that it was God who would give them the power to make wealth. Our security is in God, not in our bank accounts. Discovering His faithfulness though financial needs encourages reliance on Him.
5. God uses money to unite Christians in blessings. God will use the abundance of one Christian to supply the needs of another. Surplus money in our lives has been given by God for the purpose of helping those who are in need.
6. God uses money to provide direction. There is probably no way God can direct our lives more meticulously than through the abundance or lack of money. Too often we believe God directs our lives through the abundance of money, but He also will lead us down His directed path by withholding money.
7. God uses money to cultivate self-control. One of the fruits of the Spirit is self-control, a key aspect of successful money management.
8. God uses money to clarify spiritual maturity. Many temptations clamor for Christians' attention. A great deal can be learned about our personal character and spiritual maturity by noticing how we handle money and determine financial priorities.

Areas in which God does not use money
Just like there are several ways in which God uses money for our benefit, there are several areas in which God never uses money to influence our lives.

1. God never uses money to worry us. If Christians are worried, frustrated, and upset about money, God is not in control. God said that wealth without worry is His plan for our lives. In addition, He promises to meet the needs of those who trust in Him (see Matthew 6:25).
2. God never uses money to corrupt us. Many Christians have fallen into Satan's trap and are being corrupted. Christians whose financial life is characterized by greed, ego, deceit, and other worldly snares are at enmity with God and His plan.
3. God never uses money to build egos. Frequently, Christians are trapped by financial ego in that they use money in an attempt to build self-worth and ego. However, in Christ all are financially equal because all wealth will pass away. What will remain will be those things that have been laid up in heaven—the true wealth.
4. God never allows money to satisfy our personal whims or desires. God does not expect His people to live in poverty; however, He also does not endorse lavishness. Surplus is provided so that God's work can be funded and those in need can be helped. If the surplus is hoarded or wasted on lavishness rather than used for His plan and purpose, chances are the surplus will be removed.

So what do I need to know?
1- God wants us to be wise with the money we are given and to set aside some for savings. (Prov. 21:20)
2- God wants us to make a difference in our family by giving to future generations (Proverbs 13:22)
3-  The Bible DISCOURAGES debt. Yes, I'm serious. Proverbs 22:7
4- We are not to buy something unless we can afford it. Stop putting things on the credit card if you can't afford them!  Luke 14:28
5- We cannot be fully devoted to serving God and yet fully absorbed into our own world focused on always aquiring more money and more "stuff"


So what do I do?!?!


1- TITHE- This is not a request, it is an act of obedience. Malachi 3:10

Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the LORD Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.”

2- GIVE TO OTHERS- Acts 20:35

In everything I did, I showed you that by this kind of hard work we must help the weak, remembering the words the Lord Jesus himself said: ‘It is more blessed to give than to receive.’

3- DON'T WORRY- Philippians 4:19

And my God will meet all your needs according to his glorious riches in Christ Jesus. 

4- DON'T WORRY- Try to not be sucked in by the world's pull and needing to have more 'stuff'. Before you make a purchase, pray about it for an entire week. Talk with your spouse, a parent, a mentor, or a friend. Wait and see if after that week you still feel that you need it as badly as you did a week before. Could that money be more wisely invested somewhere else?

 James 4:14

"For what is your life? It is even a vapor that appears for a little time and then vanishes away."

  

Crown Financial says that "Money is a Tool, and Test, and a Testimony". Choose how you spend it wisely. 

Love to all of you! Hope you've enjoyed this week's series on Budgeting. Monday I'll post on Couponing.

Don't forget our giveaway we're doing for anyone who posts our blog on your Facebook page or on your own blog. You have until Thursday, June 30th at 10:00 a.m. Good luck!

Our First Giveaway!

Our first giveaway is starting now! I'm giving away a copy of "Faith Based Family Finances" by Ron Blue and Jeremy White. This book is published by Focus on the Family and is fabulous! I have my own copy that I refer to often.

Want to enter? Simply share our blog on your facebook page or on your own blog. Once you've done that, send me a message or comment with a link to where you posted our blog.

The contest begins NOW and ends next Thursday (6/30) at 10:00 a.m. This contest is only open to those living in the U.S.

Thanks and Good Luck!

Budgeting Week Post # 4- Steps to Freedom and Helpful Ideas

In case you haven't been following this week's series, we've been talking about Budgeting.
Here are links to the past three posts:
Day 1- Click Here
Day 2- Click Here
Day 3- Click Here

Today I'm going to list for you the recommended steps (as described by Dave Ramsey) and then give you some additional ways that we save money in our home.

Dave breaks them down into 7 Steps.

Step 1- Set up an emergency fund with $1,000 dollars in it
Step 2- Pay off all debt
           
    We have paid off all of our debt except for our home. For those of you that may have credit card debt, student loan debt, new furniture debt, etc., the time has come to PAY IT OFF! As I posted earlier, debt only serves to enslave us to the past. Dave says that to do it quickly you should first make a list of all the money that you owe to anyone (except for your home) starting with the smallest balance first. Then you begin working on paying it off first (he calls this your debt snowball). Pay the MINIMUM balances on all of your other debts, but on your smallest debt (regardless of interest rate)- throw every single dollar you have available towards it. Once it's paid off, move on to the next one on your list. Keep paying minimum balances on all the others except for the one with the smallest balance. You will be working with 'gazelle like intensity' towards paying off these debts one by one.

Step 3- Once all of your debts (excluding your home) are paid off, work to save up three to six months of living expenses. He calls this your FULL emergency fund.

Step 4- Begin putting 15% of your household income into Roth IRA's and pre-tax retirement plans. Some people say they want to save for their kid's college savings accounts first but Dave says this is a mistake. You can always get a loan if you have to for their college, but there are NO loans for retirement. Don't invest more than 15% at this time into this account.

Step 5- College Savings Account- Dave recommends figuring out how much you are going to need to save each month at 12% interest for college when you or your kids will attend.

Step 6- Any extra money should be thrown towards your mortgage. Want to build real wealth (according to Dave)? Pay off not only all your debts, but also your home!

Step 7- Build wealth and give. This is your opportunity to bless others and to begin building a legacy for your children and grandchildren.


Think these 7 steps are impossible?
Here's some motivation for you then. http://www.daveramsey.com/articles/article-list/category/lifeandmoney_wedidit_user_generated/

Some other ideas that we have found work in our home:

1- We have a cash rewards credit card. Now for some of you, this would NOT be a good idea. For those of you who can handle using a credit card and paying off the FULL balance each and every month, it could be a great idea. About 5 years ago, we signed up for a cash rewards card with the intention of using it for every purchase and paying off the full balance each month. Since that time, we have never left a balance on it, incurred any interest charges, and we have gotten paid over $1,200 dollars! For us it's a win/win situation.

We used a Capital One Cash Rewards card, but there are many good options out there.

2- Power and Gas Bills
   We have gas heat and a gas water heater, so we typically have pretty high bills for both that and our electricity. Now that we are a one-income family and we budget so strictly every month, I was having difficulty forecasting exactly what our monthly utility bills would be. I called our Power company and our gas company and both agreed to an Equal Payment Plan. They take all the bills from the previous year and figure out what the monthly cost would be. I pay that same amount every month. If I end up using more power or gas, they send me an additional bill at the end of the year. If I use less, they credit it to my account. I just got a $75.00 credit last month because we had used less power than they predicted over the last 6 months.

Also, we installed a programmable thermostat. Marcus was able to install it himself in only a few minutes. It automatically adjusts the temperature for us according to a schedule that we set. For example, if no one is home during the day at your house, you could set the temperature to be higher in the Summer so that you aren't paying to cool a house that no one is in. You can also set it to begin cooling down about 30 minutes before you are set to return home so that it's comfortable when you return. We make the most use out of our programmable thermostat in the winter. We set it to adjust the temperature a little cooler once we're all in bed and under the covers and then we set it to warm it up about 30 minutes before we wake up. Our power and heating bill has reduced significantly since we began using this thermostat.

3- Shop at stores that offer rewards. There are many, many programs out there. One quick example is Bi-Lo. For every $50 you spend (pre-coupon), you get .05 cents per gallon off of your next gas purchase. This may not seem like a fabulous deal to you, but if you're a couponer, it will. I can go in there and get 100.00 worth of items for around 10-15, and rack up .10 cents for 20 gallons of gas. That just saved me another $2.00. Imagine doing that once a week for a year and you just saved yourself over 100.00 on gas!

4- Set up a babysitting co-op with your friends. Find some friends you trust that have kids of similar ages, then take turns babysitting for each other. FREE. PLAYDATE. FREE. DATENIGHT. Win-Win.

5- Re-purpose old items.

This was an old spice rack at our house. It now can be either a K-Cup holder for our Keurig, or Karsyn loves to use it as a stool at her art easel. Don't go buy something if you can make do with what you have. Running out to buy things you thought you "needed" was what got you into this mess in the first place, right?

6- Sell anything you aren't using. Seriously. Use it or sell it. Do you really need 6 nine by thirteen baking pans? Is it important that you have 3 pair of khaki shorts? Utilize resources such as craigslist, ebay, local yardsales, selling to friends, selling on facebook, and newspaper/Iwana ads. Have old books or movies? Half.com is a great way to sell them quickly. Old textbooks? Get rid of them!

My Daddy used to say "the more stuff you own, the more it owns you." Get rid of what you don't need and hopefully make some money while you're at it. Then use that money towards your debt snowball!

7- Renegotiate any ongoing contracts you have with companies that charge a fee. Call your bank and credit card and ask for a lower interest rate. IT WORKS. Check out the prices of competitors for some of the services you're currently paying for (Satellite, Phone, Cable, Cell phones). 

It is possible to live with less. I promise.
I'm going to post tomorrow with some scriptural background on WHY we need to look at our hearts and the motivation we have towards 'stuff'. I'll start next week with the couponing post.

As always, thanks to all who have sent messages and comments. I am so grateful for the life experience you are sharing and also that you are reading what I write.

Love you all!

Our Cash Envelope System (Budgeting Week Day #3)

I have mentioned in my earlier posts here and here that in our household we use a cash envelope system.

At first when we considered this system, we thought there was no way in the world that it would end up saving us money. In the past, any time I get money for Christmas, Birthdays, or presents, I. SPEND. IT. Quick. While my sister would still have hers 9 months later mine would have been gone in a matter of 9 hours. However, we have found that not only does this cash envelope system work, it works WELL.

You see, it's a lot harder to pull a $20 bill out of your pocket and have to 'break' it to spend it on a java chip frappucchino (that you know you don't really need) than it is to simply swipe a credit card. It's also a lot harder for me to give into picking up a few little things for the kids (which add up to an expensive thing!) while shopping somewhere when I know that the envelope for kids items is down to 4 dollars.

Here's what we did:

Using the budget that we had written (again, refer to this post if you haven't done that yet), we knew what our recommended spending percentages should be and we also knew what our spending habits had been by looking over bank statements. We picked out categories of spending in which we knew the amount could vary or that was considered a 'luxury' item in some cases. I'll describe below the envelopes we use and any tips for that category if I have any.

Again, we use a four week cycle, so every 4 weeks EXACTLY, I head to the bank, get out the precise amount that we need for our envelopes and then I fill them with the set amount of cash.

1- Miscellaneous spending money/Blow money: Both Marcus and I get a set amount of this each month. We don't budget for any "fun" items, so anything of that sort would have to be bought from our Blow money. I typically spend mine on taking the kids fun places, new books, Starbucks, or small items that I may want such as earrings, salon shampoo, etc. If it's something that we really want to buy and it's not an item that fits into our budget, it has to come from our Blow money envelope. The best part of blow money? You don't have to feel guilty about whatever you buy. For example- I some days take the kids to get happy meals at McDonalds. This is as much a treat for me as it is for them because it's usually a fun outing and they can play outside for a while, and also because I don't have to cook their lunch. My husband is completely anti-fast food when possible, so I KNOW he would never want me to spend our budgeted money on happy meals. But since it's MY blow money, I can spend it however I want to. Same goes for if I want to buy a $5.00 cup of coffee- as long as there is enough in my envelope, I don't have to feel bad. With that being said though, keep in mind- the amount that we set aside is very small. We are trying to use "Gazelle like intensity" (as Dave Ramsey says) to reach our financial goals, so we don't allot ourselves much money for 'extra' items.

2- Eating Out- With two small kids that hate to sit still, eating out is not something we do often. We set aside a small amount each month in this category which covers take out one or two times and usually a meal out for a date night. We are big users of restaurant coupons and we usually try to eat at places where we either have a gift card or a coupon. We have saved so much money by not eating out as often! In fact, the amount we set aside each MONTH is now around the same amount we used to spend on one nice meal out. Crazy, huthh?!
I use this book to find my restaurant coupons:

 You can buy this from local school groups or sports teams that are selling them, or many retailers carry their own version. It is FULL of restaurant coupons, store coupons, coupons for things like discounted admissions ticket prices, etc. It is typically around $20 but pays for itself almost with one use. We buy at least two every year and keep one in both of our vehicles.

I also find restaurant coupons in newspapers, on the back of receipts, from magazines, on the internet, and collect them from friends. I keep them all in this small coupon organizer which stays in my purse at all times.

3. Diapers- I can't wait until this envelope is no longer necessary! I use coupons and stock up when I can get them for a really low price. This envelope is also where we spend from if I need things for the kids such as toilitries, medicines, socks, hairbrushes, sunglasses, sunscreen, etc. It's our MISC KIDS envelope I guess you could say.


4. Oil Changes/ Car Repairs- We don't typically have a vehicle expense each month, but we have found that in the long run, it's better to set aside a small amount each month than to be hit with a big bill when something happens. We find coupons for this in the mail usually, so I never pay full price for oil changes.

5. Clothing- We set aside an extremely small amount each month for clothing. In fact, the amount we spend on our family of four over a month is less than I used to pay for one item! We are learning to make do with what we have and trying to not desire newer and trendier items. I have a few really great friends that let me have their clothes that no longer fit and one friend even lets me have her sons clothes that he has outgrown. I try to pass our stuff on to someone else so that we can also be blessing others. It is amazing when you look in your closet at all the clothes we have and then we say "I have nothing to wear!". Have you read the books Radical or The Hole in Our Gospel? Completely changed the way we look at the things we "NEED".

6. Babysitter- We plan for at least one date night per month. We pay a girl from our church to keep our kids and it is worth every penny. It is good for our kids to be around our sweet babysitter, it is good because she is grateful for the money, and it is SO good for our marriage. I will post in the next few days about a babysitting exchange concept and how you can save money through that as well. But first let me just say- your marriage is worth the investment. For us, we will make sure we have at least one date night out of the house a month and a few date nights at home after the kids are in bed. We have to make our marriage a priority, and you should do the same for your own!

7. Toiletries- I coupon for almost all of our toiletries, but if I have to spend any money it comes out of this category. I'll post more about couponing later this week.

8. Entertainment- We budget an amount for this category each month but many months we don't spend it. Our kids are still pretty small for things that cost much money (activity wise), so typically we go to the park or to friend's houses, or to the swimming pool for entertainment.

9. Home/Yard- This is for things like air filters, home improvement projects, fertilizer for the yard, etc. We only set aside a small amount, so if there are any BIG projects, we have to save up for a few months before they can be started.


10- Birthdays- We set aside an amount each month for any birthday presents that we are going to have to purchase. This also includes things like Mothers Day presents, Fathers Day presents, Valentines, etc. Although we don't buy anything for each other, we do buy presents for our parents and for our friends on their special days. I try to stock up toys and things for my kid's friend's birthdays when I find a good price and then I use them throughout the next few months. I get a lot of them on Black Friday shopping and they last me through the year.

11. Food- This is our hardest category to stay in budget. When I used to grocery shop using my credit card, I'd have an amount that I'd aim for, but if I went over it was no big deal. I'd swipe the card and move on. Now that I am using cash, it is MUCH harder. I have been weekly grocery shopping the past two months (as opposed to my monthly grocery shopping post here) and by the fourth week, sometimes we are down to very little. Those weeks I have to get creative and use up anything we can find at home. I could just use our Debit card and spend whatever I need to, but we have determined that we're going to do all we can to stay within our set amount in that envelope. And let me tell you, it's SUCH a good feeling when you know you have!


I keep all of the envelopes together inside this clear bag:

I don't carry the full amount in most of the envelopes and I leave the envelopes at home that I know I won't need that day (Ex: babysitter or eating out).

*THE GOAL IS TO NOT SPEND ANY MONEY THAT ISN'T IN YOUR ENVELOPES! There will be some items you are spending money for that you budgeted for ahead of time, but the plan is that for anything NOT on your budget, it has to come from your envelopes.

Let's say that one month we have A LOT of birthday parties that we're invited to. I may need more than the amount we have available in the Birthday envelopes. I am going to have to take money from another envelope (such as Entertainment) to pay for it. If I don't have the money in another envelope, I shouldn't buy it.

*I try not to pull money from other envelopes if I don't have to.

*I write the amount I put into the envelope on the back each month when I fill them with cash. As I spend, I also write down where and how much I spent. This helps me to track where my money is going.

*I keep receipts in the envelopes so that I can have a visual reminder of what I spent it on as well.

*If there is money left over at the end of the month, you can decide where it will go. Do you want to keep it there and add the full amount to it for next month? Do you want to take out all remaining money and apply it to any outstanding debt that you may have? Save it for a vacation? Save it towards a splurge? It's up to you. But listen closely here- it is FUN to sit and see your hard work paying off when you have money left over...when you can know that you have been honoring God with your finances and that you are learning to live within the means He has given you. F U N.

Come back tomorrow and I'll post about steps recommended to take towards financial freedom. Thursday we'll talk about helpful ways to save and then Friday I'll wrap it up with couponing.

I have been L-O-V-I-N-G the messages some of y'all have sent me. It's so nice to hear that many of us share the same struggles and that you are benefiting from reanalying the way you are spending your money. I encourage you to post your comments here so that others can benefit from reading your strategies as well. I have gotten some good ideas from your emails and am excited to implement them in our home.

Love you all!

So I want to make a budget, but where do I begin?!?!

The first step in determining how to set up your budget is to get organized. Pull together your pay stubs, your checking account register, your credit card statements, any auto draft payment information, as well as any outstanding debt payment information.


It helps me to have one place where I keep all of this information together. I have a inexpensive 2 pocket folder that clips into my Home Management Notebook. It looks like this:

Any time I am ready to reconcile last month's budget or to write the next month's budget, I simply pull out this folder. Everything I need is there. I also have in there copies of my blank budget, notebook paper, recommended spending percentages, and our monthly cash flow document. 


There are MANY resources out there that give you sample budget sheets. Here are a few:


Dave Ramsey Quick Budget Form


Crown Financial Quick Budget Sheet


as well as a Budget Analysis Form from Crown financial here


I took these resources plus a few more, and put together the budget that we use. 


I listed every bill that we must pay each month on a sheet of paper. I put beside it how much we typically owe as well as two more columns beside it. I will fill these in at the end of the month with the actual amount spent and then the difference between actual amount spent and budgeted amount spent. 


We use the cash envelope system, so that is included on our monthly budget as well. (I WILL POST HOW WE DO THE ENVELOPE SYSTEM TOMORROW). 


The last three sections on our budget include a section for Income and Total Expenses (for reconciliation purposes), a section for Grad School Savings,  regular Money Market Savings, and than any unforeseen expenses. 


It looks like this:

 

Here's a closer view of the different sections:

I like to keep ours all on one page so that it is easier to keep track of. I keep a stack of these pages in our folder and can pull them out and edit them at any time. 


We use a ZERO-BASED budget system, which means that we plan out ahead of time where every single dollar should go during the month. We plan for the exact amount we will put into savings, put into saving for graduate school for M, car repairs, gifts, home and yard expenses, everything! Most of this is taken care of through our envelope system as I'll describe tomorrow. 


When you begin working on your budget, the hardest part is knowing HOW MUCH to budget for each of your categories. I used resources from Dave Ramsey and Crown Financial for this. Here's a link to the Crown Financial page with this information:


Click HERE

For example, for our family of four, they recommend that we spend around 30% per month on Housing expenses. You can look at this chart and figure out (based on your income level) how much to spend on what. Our first payment is always our tithe and we tithe off of our gross income. We have seen the blessings that can come from this and so we strive to give above and beyond our tithe each month. 

So what now? 


Look at all the materials you pulled together. 
1-Figure out first what your total income is. We use gross income, but you can do it however you'd prefer.
2- Figure out what time frame your budget will be for. We do ours in four week increments because we are now a 1 income family and he is paid every 2 weeks. We start our new monthly budget out every four weeks exactly. 
3- Write out all of your expenses that are regularly occurring (such as mortgage/rent, Insurance, TV/Satellite, phones, retirement savings, etc. Using the link above, figure out what you SHOULD be spending on these items each month.
4- Make a list of all other expenses that you regularly incur in a month but that may fluctuate some. This is where your cash envelopes will come in (again, come back tomorrow to learn about these!)
5- If you are married, sit down with your spouse and go over all of this together. Look at all your expenses from the previous month and determine what you think you should spend in the coming month.


*If it is your goal to begin saving money, you have to SPEND less than you EARN! Seems simple, but for so many of us, this concept is hard to grasp. If you can make some cuts to the expenses you currently have, you can begin paying off debt. I will talk about this on Wednesday's post, but debt is NOT something you want to have. Period. 


*After looking at your regular monthly bills, call the companies that provide those services to you and negotiate a lower payment. I have reduced our bills SIGNIFICANTLY by calling and telling them that I would be dropping their service if I couldn't get a lower monthly price. This works! If the person you are speaking with can't help you, ask for "Customer loyalty" or "Account Termination". I have always found that the people you will speak with are desperate to keep your business and will make changes to keep you a customer. 


I have gotten our cell phone bill reduced by $35 a month, our satellite by $22 a month, and our Internet by $17 a month. Do the math- that's 74 dollars a month or $888 for making a few 10 minute phone calls!


Terminate any expenses that you don't really need. Are you paying $65 dollars a month for a gym membership that you don't use? As much of a fitness supporter as I am, you need to drop that membership! Most gyms now don't require contracts or joining fees, so cut that expense until you are actually going to use it! What about a home phone? Do you NEED to pay over $30 a month for a home phone or could you just use your cell phone? In most cases it's much cheaper to add minutes to your phone plan or add a friends and family option than to pay $30 a month for a home phone. 

Talk to your car insurance agent- are you getting the best rate possible? Should you increase your deductible a little so that you can lower your monthly payment? 

Talk to your benefits coordinator or tax professional. Do you need to increase your standard deductions from your paycheck? If you are getting a substantial refund each year from the state or federal government, then your money would be better utilized by increasing your deductions. If that money is yours, why let the government use it interest free? Change your deductions and then put it into the bank where you can start making interest on it for yourself!

There are MANY ways to save money and there are lots of people who know far more about this than I do. BUT, these things have all worked for us. We are surviving as a one income family and learning to be content with what we have!

Start working on the steps described above, and come back tomorrow. We'll talk about cash and how to make it work for you!

Our Journey Towards Living on Less

"To live content with small means- to seek elegance rather than luxury, and refinement rather than fashion. To be worthy, not respectable and wealthy, not rich"- William Ellery Channing

In June of 2008, we had our first child. At that time I was working as a teacher and my husband was an Athletic Trainer. Neither of these professions is exactly known for paying well (especially where we live in the South), and so when we felt like God was leading me to take a year off of work, it was a little scary. We felt confident that it was what we were being called to do, so I left my job with the intention of returning one year later. During this time I stayed at home with Karsyn, began learning how to live on less, and finished Graduate school.

We were surprised month after month when the budget written out on paper always came up short, but because of God's faithfulness, we always had enough money. On paper it didn't work, but it did work month after month after month.

I returned to work in the Fall of 2009 as a School Counselor and Marcus had been promoted to working in a Administrative role at the hospital he had been working for. We decided we wanted to have another child and it happened quicker than we expected. Mack would be joining our family in May, and once again we felt called that I should take a year off of work.

With the things we had learned over the past two years, we were much more knowledgeable in how to not only set up a budget, but to actually stay within it. I had also learned many tips and strategies for saving money through couponing, selling items, buying items on discount, consignment shopping, etc.

Over the next week I'll try to post some things here that helped us, in hopes that they can help you!

Let me be very clear on this point. We do NOT have it all figured out. There are thousands more people who know far more than we do and who have much more evolved systems. I will share with you what works for us and then you can do with it what you wish.

For today's post, I'll give you a few resources that you can begin using now and looking over. I'll also add some helpful information that may motivate you on your journey towards living within your means.


My favorite resources on financial freedom:
Dave Ramsey
www.daveramsey.com

He has MANY publications, DVDs, Group Studies, tools, software programs, etc. that can help you get started. I will talk more about some of the tools we used most in tomorrow's post.

Faith Based Family Finances which is published by Focus on the Family Ministries.

And many of the resources from Crown Financial Ministries and the Crown Money Map.

I'll be giving more specific information from these tomorrow that will help you get started. For now- some helpful things we have learned:

1- The way we spend our money should reflect our convictions on life.
2- It is OKAY to invest in things that really matter. It is also okay to spend money on things that don't every now and then. The key difference is to plan to do those things- to intentionally set aside money ahead of time so that you afford them.
3- Debt will only serve to enslave you to the past.
4- We have GOT to learn the difference between a luxury and a necessity.
5- Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like. - Will Rogers
6- Cash is a tool that we can use to build, repair, or create what matters most to us. - Dave Ramsey
7- Our goal is that WE should tell our money where it should go- Dave Ramsey
8- It is essential that both partners in a marriage are equally committed to the same goals and spending/savings plan.
9- If you will live like no one else (not spending money, cutting out all non-necessary expenses, not buying things we don't need to try to fill some void), then later you can live like no one else (completely debt free, able to give money to others, to your family, etc.) Dave Ramsey
10- Keep it Simple and stay focused on the goal you are trying to reach. Dave Ramsey calls this Gazelle-like intensity.

Please join me again tomorrow as I show you how I put together our written budget and how we stick to it. I'll also try to cover our envelope cash spending system, couponing basics, and anything else you might have questions about. If you happen to still be reading, do me a favor. If you aren't a follower yet, click FOLLOW. It thrills my soul each time I get a new reader!   Also, please comment or send me a private message and let me know what questions you have or anything you want to know about these topics.

Love you all!

Homemade Baby Wipes- REPOST

About a year ago, a friend's blog introduced me to homemade baby wipes. It turns out that even when you buy the GENTLE or the SENSITIVE baby wipes, they will have chemicals added to them that can irritate a baby's skin. Karsyn began having major diaper rash around 15 months and when I switched and started using this homemade version, we saw a big improvement.


Even if your baby may not have sensitive skin, these wipes are easy to make and very cheap.Most likely, you have all the ingredients at your house already.
In case you're interested, here's the recipe that I have found works best.

1- Boil two cups of water. While this is boiling, you need to saw in half a roll of select-a-size paper towels. (The soft VIVA ones are my favorite, but you can use other brands).
This part is a little tricky and messy. I have found it works best if you use a serrated knife, or you can use one of those electric knives like you slice a turkey with and just do a whole batch of them at one time. I had a tough time today with the brand of towels that I used so as you can see, I also used scissors and a sharp knife as well.

2. Once your water is boiling, remove from heat and add:
1 TB. Vinegar (keeps bacteria from growing in the wipes)
1 TB. Baby Oil
1 TB. Baby Soap or Shampoo (I use lavender scented)
1 TB. Lotion (I use lavender scented)

Stir Well

3. Put the wipes in a container of your choice jagged side down and pour the mixture over them.

4. Put the lid on the container, turn it upside down and let it sit for five minutes.

5. Turn it right side up and let it sit another five minutes. Then remove the lid and pull out the core.

Your wipes are now ready to be used. Pull the first wipe from the center where the paper core was removed.

The cost effectiveness of your wipes will be determined based on what you pay for your paper towels. For these, I got them for about .52 cents a roll. I figure I used about .05 cents worth of each of the other ingredients, so the total cost is less than dollar for two batches. If you compare that to paying regular price of 3.00 per 64 wipes, and assuming that two batches is equal to two containers of 64 wipes, you just saved yourself $5.00 for 10 minutes of your time!

My First Monthly Meal Planning Venture

I have tried to plan meals in advance before. I have the best of intentions, but rarely do I stick to that plan after about the first 3 days. Life has always gotten in the way. This year, one of my goals was to be more organized and to be a better manager of our finances.

We follow many of the priciples of Dave Ramsey's plan and we use the cash envelopes system consistently. Part of that is that at the beginning of the month, I get out the cash we will need for groceries and I put it in an envelope by itself. When that money runs out, I either have to find some in the other cash envelopes (which are usually also empty by the end of the month), or do without. This has saved us loads compared to when I would shop and just swipe my bank card. There is something much harder about parting with the cash in your wallet than swiping your plastic and thinking "whoops, I went a little over!".

Which brings me to menu planning. I decided to attempt not only planning meals for the entire month, but also making one massive grocery store run in hopes of saving some money. What usually happens is that when I grocery shop weekly (or every few days as it has been lately!), I go in to get one item and I purchase at least 10. This can kill our budget quickly...back to the menu planning.

If you have ever wanted to attempt it, here is the way that I did it. I'm sure there are easier ways, and yes, I know that there are services you can pay for that will do this for you. However, now that it's done, I can't tell you how much satisfaction I have gotten from doing it myself!

Step one:
I made a list of all the meals that my family will eat, or recipes that I wanted to try. Here's a picture.

Next, I looked at our calendar and scheduled when I'd need to cook. Some nights we eat warm-ups, a few nights we'll be dining with friends, and a few nights we'll get takeout.
Here is what that looked like for us:

 

The hardest part was making the shopping list based off of the things I planned to cook, plus ANY of the foods we eat on a regular basis for the entire month. I made a list and just made hash marks for any items that I need multiple ones for. It looked like this:

Next, I organized this big list into sections of the store so that when I went shopping (with two kids in tow) it would be as quick and easy as possible. Here is that list:

The last list I made was a list for items I'd need to be that week that wouldn't keep if I bought them at the beginning of the month. It's mainly produce and things we'd have to use week to week. Here it is:

I went to Wal-Mart to shop this month. Marcus kept the kids,  so I purchased every item (except for 3 I didn't find), paid for it, loaded my car and was home an hour and 15 minutes later. This included a few trips to the Wal-Mart restroom due to all the water I was drinking (another resolution!). The best part, it was approximately HALF of our monthly grocery allowance. Which means, as long as I stick to the plan I will have saved a significant amount of money, all for the time it took to make this plan and shopping list. Total time invested- probably about and hour and a half in planning, and another hour and a half in shopping and putting the groceries away. Worth it? Absolutely! Another bonus is that each morning when I wake up, I know exactly what I'm fixing that night so I can begin thawing out the meat, or during breaks from the kids I can begin preparing parts of it so that I can spend less time that night.  This month will be the hardest because I didn't know the process until I had been through it. Now I know what to do and I can re-use a lot of the work I did for this plan.

What do each of you do to plan for your families meals? I'd love to hear!