This is a quick overview on what I budget for monthly (the one with the orange highlight was just for this month) all the ones with yellow highlights is what we budget for monthly and the ones with nothing on them are just extra categories that I forget to delete. Lol! For insurance, I think these get taken out of John's pay before we even see it. So I'm not quite sure how much it goes in that category. I should look to see if its in his LES. But we do have life and health insurance. I'll also sometimes add subcategories based on what is happening for the month, and we happen to be moving this month so I decided to fund it and budget for it under PCS. 

Under the savings category, Emergency Fund is our 3-6month EF and John's sav is our starter EF. I put money towards each one every month, putting more towards the actual Emergency Fund (which is now sitting in a HYSA - high yield savings account). I didn't feel content with just having a $1000 starter EF (as suggested by Dave Ramsey), so to be safe, I go ahead and fund it monthly, which right now we have $2k in plus the $2k cash that Ive saved. We've luckily only had to tap in to it once, which was the $800 vet visit. 

The breakdown:

So here is what I do when I sit down to budget. I start budgeting for all the important stuff first like housing, monthly bills, and essentials. After all the important stuff, I budget for the savings category. Tristan and Amelia always gets the same amount each month, and the EF and "john sav" is usually $600 in EF and $200 in "john's sav" depending on if I need to fund for other things that month. But I usually like to keep it pretty consistent with both those amount.  After all that, I go all the way down to debt. Before we paid everything else off, I had set amounts for each of the subcategories under debt based on minimum payments (plus whatever extra I had left over to pour into debt). But since everything else is paid off, I just left the budgeted amount for that category as is, and put it all to pay off our last debt, my larger amount Student Loan! The last thing I budget for is personal and lifestyle. And whatever we have left over after everything is funded, I'll go back and add that to the highest interest debt we have. 

In the 5 months we've been doing this, Ive kept all amounts for each category pretty consistent. The set amounts I decided for personal and lifestyle was based from how we've managed to get by the past few months. When we first started I based it off calculations from how much we used to spend on them. Clothing used to be $200 (i know i know, crazy!!), entertainment used to be $250, groceries started off with $500, dining out was $400/$450 (yikes!), but we've since cut back on a lot of our spending habits after the first month or two, knowing we can survive for less. For example, clothing allowance monthly now is $120 for all four of us, entertainment is $120, groceries are $400 (including costco trips), dining out is $250. We don't always use them up, and if we don't,  I'll roll the left over into debt and/or as part of "income" for the following month. We've also eliminated categories like Pax's grooming, John and Tristan's haircut because we do it at home now, and have saved us over $100/month, meaning more money towards paying for debt. 

Also the great thing about every dollar app is you can copy what you have on your budget plan from the current month to the following month, and correct as you go. Since I do this, I just change the amounts and I'll add categories if I need it. But most of it I've copied and pasted from the very first month we started, which saves you time. 

Cash System:

I often get asked how I do the cash envelope and if I withdraw our entire budget into cash. Answer is, NOPE! I can't because majority of our bills are paid online. I only use cash for certain categories and they are: gas, groceries, dining, toiletries, christmas/gifts, clothing, fun money, entertainment, misc... ok basically everything that isn't a bill. But here's my strategy with this, and its what worked for us. I will withdraw a certain amount the first half (first paycheck), and then a certain amount the second half. Once John's paycheck comes in, I will then total up how much cash I need to withdraw from each category, and then distribute it to each envelope (or in my case, tabbed dividers in my diy cash pouch). To keep track of cash flow, I have an index card for each of the dividers for my cash. I put the date it will be used for, the started budget, and then when I spend I track them and label it by date, store, and amount spent. For example, groceries, I'll pull out $200 of the $400 I budgeted for and that is what we use for that first 2 weeks of the month. If i spend $120 at commissary, I'll write down "02/03- Commissary - $120" then I'll write down how much is left over so I know how much I have left to spend in this category. So once that $200 is done, its done. I don't tap into any other categories to fund it. Certain categories like kids milk, toiletries, Paxybubs, I'll withdraw the entire amount in cash. There are also certain categories where I sometimes wont withdraw cash for in the second half of the month, since we do order stuff online and I'll just track it on the app. So this is where it might get complicating. How I keep track of this on the app is that I'll notate it as "in envelope" in the description for when you track your expense. But once I've done this, I no longer track my expense from this category in to the app, and instead track it on the index card. I know i know, this sounds complicating. It really isn't, at least not for me since I've been doing this for 5 months! Its also easier for me to explain in person because I can show it through the app than me trying to explain it word for word.  Maybe I'll do a video? Jk, thats a lot of work! Lol!

As for our cash flow, I keep ALL receipts when I pay in cash because there are no other record of them. So does John. So if I happen to forget to track it down, I can refer back to the receipts, and if there aren't any, I lose my mind trying to figure out what happened with that money. Its happened before, and I sat there for 30 minutes trying to figure out what we did with $25 because I forgot to track it down and I had no receipt. Keeping track of your expenses is important, cuz a few little hiccups, could throw you off.

The cash system is sort of hard to explain as it is a system or method that took me at least two months to get used to and figure out what worked for us. I was never fond of carrying cash, but it really helps keep me in check and on track, because once its gone, its gone. I cant swipe, I mean I can but I've learned to resist the urge. There is no right or wrong way to doing this as long as you keep track and are on top of your expenses. I'm also sure there is a way to eliminate the cash system all together because a lot of people have done it by simply keeping track of all your expense on the money tracking apps like everydollar and youneedabudget. Maybe sometime in the future when our debt is paid off, I'll decide to eliminate cash system all together. Who knows. Right now, this is what's working for us. 

This lifestyle change has felt so much more liberating. I no longer worry about whether or not we can pay our debts, our bills, groceries... because I know for a fact we can. I no longer wonder where our money goes at the end of the month, because I've already assigned each dollar a job. I used to panic when I'd see less that $200 in the checking account, but now when I see $60 in the checking account  at day 29, it just means we've made every dollar work for us. I actually get excited when I see anything left over by day 30 because it means extra money towards debt and/or to roll over for the next month! So if budgeting intimidates you, I'm telling you right now, dont let it! It can be overwhelming, and hard, and a lot of work... but it is a big factor in accomplishing your debt free journey! Dont wait, go ahead and get started now! List your debts, figure out how you wanna tackle each one, and stick to that plan. Gazelle intensity!