You’ve been prepped for the journey, now it’s time to launch into the DIY Income with Autumn Evelyn, and first thing’s first; YOUR BUDGET!!
I know, it’s scary to look at all those numbers, sitting on a page, always screaming that it’s just not enough, but now it’s time to put in your ear plugs and ignore the screams, roll up your sleeves and dive in! Things may get ugly, but in the end it is SO worth it!! And we surely can’t make a Do-It-Yourself income out of nothing. So in order to make the most of what we have, we had better hop to it!
The way I organized our family’s budget with my husband started with a pad of paper, a list of all our bills, and a trip online to www.daveramsey.com! Yes, he has a store attached to his website, but you don’t need to buy anything! Mouse over the “Tools” tab on his webpage (not the store page!) and you will find a tutorial on how to get out of debt (TRUST ME, IT WORKS!) annnnnd, free downloadable budget sheets for all different types of income. There is also a free online budget tool! Use these! Dave Ramsey’s goal as a financial advisor is to teach people how to make 1 million dollars (to retire on) while being able to achieve their personal goals of saving for their children’s college, or buying a new car. But REMEMBER, both with Dave Ramsey’s system, along with my own DIY mentality, sometimes that means you can’t have what you want now, you have to be patient and wait until later...or come up with an alternative that’s a compromise!
This is the "Executive" version of the envelope system sold by Dave Ramsey on www.Target.com for $17.
With the base of my system stemming from Dave Ramsey, you should now be familiar with the style. If you didn’t visit his site for at least a quick look before you sat down to hash out your budget, what I am referring to is the Envelope System! The Envelope System is a set of envelopes that contain the cash needed for monthly expenditures that are not set bills you can pay online. So this does not include utilities, car payments, other debts, or doctor bills, although you should have taken your budget, pulled all of those things out, and are now divvying up what’s left. The envelopes take this “free” spending money and tie it down. You should have an envelope for weekly gas, pet necessities, your personal spending money, monthly food budget, gifts, and anything else you spend money on!
So let’s do this step by step, shall we?
Let’s start generally and work our way down to the finer details. It is easiest if you have an excel sheet handy where you can punch in your numbers (or take the ones you ended up with on Dave’s site and fill them in), and add lines, or change totals as you go.
Think of everything you regularly spend money on. In our house the categories go a little something like this:
CATEGORY
- Food
- Pets
- Car Maintenance
- Baby
- Gas
- Husband’s Clothing
- Wife’s Clothing
- Husband’s Spending
- Wife’s Spending
- Gifts
- Joint
Now before you get excited over the “Joint” Category, let me explain that this is extra money that my husband and I jointly have rights to, and is used for extra activities, such as dates, trips to the pumpkin patch or zoo as a family, or games. Really it’s allotted for any activity we would do together or with our children!
I expect that your house will have similar categories, it just depends on how you want to break down your spending habits. However, you MUST allow yourself some spending money. Dave Ramsey calls this “blow money” and if you don’t plan ahead for it, you will blow more than you can truly afford, and land yourself in heaps of trouble! Let me also say that whatever does not get spent from the envelope of a specific category will still stay in that specific category. So, at times we do not use all of our gas money, but the excess will remain in the envelope for emergencies, or weeks where there is extra driving, or even saved for a road trip down to visit the in-laws (if “Joint” is unable to afford the gas expense).
Now, the last thing to do is break everything down to it’s most minute form. Dave wants you to allot for everything, but I want you to allot for EVERYTHING!! What I mean is, when he says Gift Fund, I say: Write Down Every Birthday, Person You will Buy a Gift For Christmas (Including 40 Dollars Extra For Those Unexpected People), Mother’s Day, Father’s Day, Grandparent’s Day, Anniversary, Valentine’s Day, Children’s Friends’ Birthdays, Your Adult Friends’ Birthdays, Halloween Candy, Christmas Cards, Gift Wrap and Supplies, Birthday Invitations, and Actual Birthday Party FUND! After you have written EVERYTHING down, figure out how much you would REASONABLY spend per occasion. I spend 20 dollars per birthday. 20 dollars may be too much for your financial situation, maybe 5 is all you can afford (we did not start out at 20, as our lowering debt has freed our money, we have decided that gifts are something important that we want to spend more on). Keep in mind though, this has to cover the shipping expense if it’s for anyone out of town. Sometimes, I want to spend more than 20 dollars on a person’s gift, or I forgot to account for shipping. To make up the difference I use my own spending money, or the Joint envelope if it’s for a mutual friend and my husband agrees. Finally, tally up the total, and divide that by 52 (weeks in a year), which leaves you with the amount per week to stash in your envelope.
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This is a little snapshot of things you should allot for! I have separate excel pages for all of the categories for easy locating!
While you are entering each individual occasion into your list, now would be a prime opportunity to add the date it will occur, and a spot for how much you actually spent on that person. If you are doing this in Excel or Google Documents (A FREE version of Excel), which I highly recommend as it allows for multiple users (ie you and your spouse) to come back at later times and change or update the sheets, put the column totals at the bottom. Then it will be easy to keep current with your spending, and hopefully with your DIY tools, you can cut costs on things like invitations and gifts, and carry over any unused portion to another occasion where you might need it more. For instance, I was given a heap of retired Army gear, which I boxed up and gifted to my kid brother, who had no idea the stuff was free for me and was completely elated to receive it! I used the 20 dollars I saved on his gift and put it towards stamps for my Christmas Cards, making it possible to send out twice as many as I did last year!
I know this is a lot to chew on, but bear with me, we are almost done! I want you to break down each category, as specifically as you can, like we did with our Gift Fund. This is how you will come up with your weekly numbers, at a reasonable amount. I understand what it means to live tightly, but with the DIY Income, we can make the tightest of budgets reflect nothing of the sort! So Car should reflect all oil changes, wiper replacement, and a bit extra for new tires and unexpected emergencies. Pets should include the cost of food, litter, toys, and medications. Baby is the fund for doctor visits, medications, and accessories. The other categories, like clothes, spending, and joint, should be a little more variable than the set costs of owning a pet, or driving to work, and can each be a percentage of whatever money is left over, depending on how important each one is to you.
Feel free to ditch my categories and make up your own! Just make sure you you account for EVERYTHING!!
And one last tip: For a cheaper version of the Envelope System sold by Dave Ramsey, use actual envelopes and either paper clip them together, or store them all in one area. For a sturdier alternative, buy a couple of $1 expandable, accordion pocketbook size files, available at Target! A friend of mine found a $3 version at Target that comes with a notepad, so you can make lists or track your expenses if you feel you need to locate where all your money is being spent!
Cheers to fancy and frugal!
Disclaimer: I do not guarantee the results of the Dave Ramsey system, nor the price or availability of said accordion files at Target. I am merely sharing what has worked for me.
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