Thursday, March 4, 2010

Life on a Budget

"She watches over the affairs of her household..."
Proverbs 31:27

The last few weeks I've had 3-4 friends ask me about family budgeting and how we make it work on one income. I figured I'd share our experiences and techniques and encourage any one else who might be in a financially challenging situation.

Last October Tim and I made the decision that I would become a "work at home" mom. It was a big decision that meant a huge life change for our family. Though we knew things would be different, I don't know that we were totally crystal clear on exactly how different. My last day of working in the "outside world" was October 2, 2009, right before the holiday shenanigans ensued. We were very quickly distracted by the festive hoopla and it wasn't until mid-January that we really began to feel the impact of our decision to have me at home with Sawyer. So, for the last month and a half, I have found a new job: Official Keeper, Adjuster, Balancer, and Assessor of the Household Financial Affairs.

Because I am an administrator at heart, after we were married, I naturally gravitated towards managing our family finances(bill paying, budget planning, etc.) but the last month or so, I have taken my job description to new levels. Because we knew going from two incomes down to one would be a major hit to our lifestyle, we began using "the envelope system" to help us make our budget.

Here is how it works...

Using a basic budget template I found on Excel, I put together a monthly budget I thought was realistic for us to follow using the following categories:

Check Payment
Electricity and Gas
Vehicle Insurance
Health Insurance
Retirement Account
Savings Account

Dining Out
Hair Cuts
Car Maintenance

After figuring out how much money I needed to allot for each category, I plugged it into the monthly budget spreadsheet as "projected cost."

The first weekday of the month, Sawyer and I head to the bank and take out our cash for the month (I used to do this every two weeks but for our current budget needs, once a month works best). I organize the cash in my handy-dandy envelope that is divided into my nine categories and that is that!

Being able to literally see the amount of money we have available for eating out at any given time, helps us decide if we really want to spend that $10 at In N Out or if we'll save it for later and eat lunch at home because once it's's gone.

At the end of the month I go back to my Excel budget and plug in my "actual cost" numbers to compare them to what I projected and make any adjustments needed to make sure we make our budget the following month. For example, in February we came up about $50 short in our grocery budget. Because our God is such a provider and loves to bless us, He provided the $50 in a completely unexpected way and we were able to buy the groceries we needed. But to make sure we didn't get in that jam again, I adjusted some budgeted items and added the additional $50 to our grocery cash for March.

If this whole "envelope system" seems time consuming, well, it is. BUT it has allowed us to live on one income and not have to rack up credit card debt in order to survive. I probably spend an average of 6-8 hours a week on our "financial affairs" whether it be coupon clipping, meal planning, deal shopping, or prepping for the next months budget but because I consider it to be my new job, I approach it as a challenge and not as a burden. In addition, Tim and I know that, for now, God has lead us to this place and that as long as we are good stewards of what He gives us, He will continue to bless us and provide for us above and beyond what we think we need.

"The world and all its wanting, wanting, wanting is on the way out-but whoever does what God wants is set for eternity."
1 John 2:7


  1. Impressive! I am glad you did this because Matt and I want to move to this system soon!

  2. I'm working on this as well, though I'm much more inclined to try Mvelopes like Jennifer suggested. Though I'm sure the physical reality of cash in front of me would a much better incentive! Thanks for the inspiration. ;^)

  3. May I suggest that you read some reviews of Mvelopes before you go that route. I too had a bad experience with them, and now just use the cash envelope system, way better accountability also! Great work Amber, I am the CFO in our house too, and I feel so much better knowing where the money is going before we ever even have it in our hands.

  4. Amber - 3 weeks of blogging and you have 13 followers already! You go girl. You're a natural. :)
    I have not yet gone the envleope route but using pearbudget very carefully and updating regularly is so far serving the same purpose for me. I track where I am in each expense category keenly and ensure I don't go over. I love it...
    I agree completely that being intentional and proactive as a homemaker as one of our many jobs is worthwhile and even necessary. We ARE working from home and we do 'make' money (in a different way)!

  5. Amber, I loved this post!! First, I keep thinking about your statement "work at home" mom. I LOVE THIS!! Though I am not a mom, since reading your post I have been using this term with the families that I work with to empower the moms they are not as they would say "JUST a stay at home mom." Wish you the best with maintaining your budget.