How We Budget (Part 2)

In How We Budget Part 1, I laid out how we budget our money each month and break it up into different categories. In this post, I'll explain about the different things each of our envelopes pay for.

Our car repair envelope pays for any necessary (and sometimes unexpected) car repairs, tires, and oil changes. Lately it has been one thing after another with our cars so the envelope only has $50 in it, but we are trying to bulk it back up so there will be enough money to pay for needed repairs in the future. Many times, although there hasn't been enough money in the envelope to cover the entire bill, it's been helpful to have the extra couple or few hundred dollars cash ready to pay for at least part of the repair.

The essentials/miscellaneous category could just as easily be labeled Target/Walmart. We buy toilet paper, dish detergent, laundry detergent, shampoo, face soap, body wash, dog food, cleaning supplies and the like with that envelope. Although I try, I never budget enough money towards this category to fully fund what we need.

Clothes is pretty self explanatory; we buy clothes and shoes with that envelope; this includes undergarments, socks, swimsuits, and pajamas. This envelope mostly funds clothes for the kids but occasionally clothes for The Husband and me come out of this envelope too.  With this envelope especially there's never quite enough money as there is need, so we charge the rest on the card we pay off monthly.

Hair care is specifically for hair cuts. This pays for haircuts for me (I go bi-monthly) and The Kids (The Boy goes about once a month and The Girl only goes about twice a year), The Husband uses clippers and cuts his own hair.

The school envelope pays for all the miscellaneous items we have to pay for throughout the school year. These are things like school pictures, field trips, dance entrance fees, and fundraisers.  This also paid for all The Kids new school supplies (to the tune of $200) this year.  It was depleted and is slowly being built back up.

Our final budget category is kid's activities.  This pays for things for like dance competition fees, things needed for baseball or soccer as well as dance.  I realized that just because I paid registration fees for an activity, it didn't keep hidden fees from popping up.  I felt like I was being nickeled-and-dimed out of all my "extra cash" laying around so we started funding this activity. It's been very helpful, though again, it never covers everything and gets depleted often.

To many people, this is too many categories or too much cash to carry around, but we've found it really works for us.  I mainly handle the finances for our family and by having this many envelopes and funding them, we have slowly begun to dig ourselves out of debt.  We have decreased our debt load every month since December 2015, (when we recommitted to Dave Ramsey and the envelope system) and our envelope system is a big part of why.