Goodbudget – An envelope money saving system

Beginning the Journey 

With the New Year upon us, it is a time for resolutions and a renewed opportunity to change the direction of your life. I spent 2013 in a bit of blur. As a Stay at Home Mom (SAHM) I spend the days as chief operator of our home. Managing the household bills and caring for our 20 month old son. I never thought I would be the kind of person interested in being a SAHM, but everything changes once you have a child. The cost of childcare would have been half of my take home salary alone, and I would have never been home based on my previous salary.

Taking the plunge

So at least temporarily, I have been a stay at home mom, working to stretch our budget, save money, and find creative ways to get by. The number one thing I can recommend for anyone who is faced with the prospect of living off of one income, make a budget. Once you have established a budget based on your current spending habits consider how you can trim that budget. Do not make late payments. In order to get the best interest rates on loans and auto purchases, you will need good credit. So if you find yourself unable to make your bill payments on time contact your creditors and ask for an extension or a temporary hardship waiver of payments.

Budgeting

In 2008, I started watching a cute Canadian television show called “Til Debt Do Us Part”. It is a clever show that focuses on families or couples that are in financial trouble and helping them improve their finances and repair their relationships. This show was the show that helped me understand what budgeting is, and where to begin. The show’s host Gail Vaz-Oxlade has a website where you can find helpful spreadsheets to begin your personal budgeting.  I have used these spreadsheets to create a budget for myself and have used her debt tools to estimate a plan to get out of debt.

Cutting Your Costs

Once you have established your budget, look at every line item and determine if you can cut anything out of your budget. Many people talk about cutting that daily Starbucks out of your daily habits. While that is one way to reduce costs, it can be difficult to alter daily habits. I recommend that you look at ways to reduce your recurring monthly expenses.


In 2005, I started using an envelope budgeting system. Our financial situation was so bad, that I had to pull the money straight out of the bank and place it in envelopes in my lock-box at home to use over the week.  

I couldn’t manage money. I was working a freelance job with flexible income and had no clue how much money I would bring in month to month. I didn’t know how to manage money and I didn’t know where the money I was earning had gone. 

It took me years to dig out of the financial mess that I had dug myself into. I probably would have found my way out sooner, but in 2006 I took an auto loan I could not afford. With a car payment of $507 a month, electric bill, gas bill, apartment rent and an inconsistent income, I had no way to manage my expenses. Putting my discretionary income into envelopes worked to some extent, but it was not sufficient without a budget.

As I look back, I realize that I was aware there was a problem, but I didn’t know how to get myself out of the hole I found myself in. As you may have realized there are steps to creating a budget, and these involve understanbding your income, your expenses, and once you understand those, you can divide the discretionary expenses into your envelope system.

If you have made a budget and now would like an easy to use program, I highly recommend the budgeting app and website called Goodbudget. I have been using this program since it was first called Easy Envelope Budget App (EEBA) it hasn’t changed much since its name change.

Why do I like this program?

Having an app on my phone enables me to write down my purchases right after I make them. The application is also available on a computer and can be synced between multiple phones allowing for all family members to record these transactions.

The application allows you to divide your spending between different categories and then fund your envelopes every week with a reminder to add money to your envelopes. You can add money with rollover or without rollover.

As you get used to the budgeting process and begin to track your expenses you can alter your budget based on your needs or changes in your income. However, what is important is that you track your expenses and understand where your money is going.

Have you used a budgeting app? Which one is your favorite? 

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