If you haven’t read yesterday’s post (part 1), please stop and go read that first...
The financial program we used to help get ahold of our finances advocated to have special cash envelope “rainy day” funds for multiple life categories - This is stuff we know that automatically comes up in life, and by preparing in advance for these expenses, it allows us freedom from being overextended in our regular day to day income.
Right now, our family’s cash fund categories look something like this:
Car maintenance(oil changes/tires/parts/filters)
Car license/registration (these fees are always due yearly for us- we plan in advance- also, every 4th year, we renew our driver licenses)
Clothing ( we don’t shop for clothes unless we really need them- but we have money set aside to buy anything my husband, myself, or our children may need through the year. I was never a huge clothing shopper even before so this part wasn’t hard for me — in fact, I almost feel like I buy more clothing for myself and the kids now that I have money set aside to do so. My husband recently lost a large amount of weight. None of his clothing fit him anymore. We were able to take some of that money and replace his basic wardrobe without fretting about where we were going to get the money from!! It was so liberating !!
Christmas (we have a set amount of money we put back each year for Christmas. We stick to that amount and don’t spend more than we have budgeted.)
Homeschool (since we homeschool, we set aside the amount of money it takes to buy their curriculum and their school supplies each year.)
Vacation (if we plan on taking a vacation that year, we pre-plan! We set aside the amount
of money we feel comfortable using and we stick to that budget.
Misc/Giving (this is like our petty cash fund- it’s for anything we need money for outside of our usual day to day living expenses- we have used money from this fund for : gifts, a special project/offering at church, or to send a love offering to an evangelist on the field. Just because we are on a budget doesn’t mean we can’t give to others! In fact, we are actually more free to give now because we plan ahead and have money put aside to do so!! God loves a cheerful giver and He wants us to be in the financial position to be available to help other people out!!! We also use money from this fund for unexpected, but relatively inexpensive things that pop up in life like a broken phone or an broken appliance that needs a part, etc. (If it is an expensive have-to expense, it would come from the main emergency fund.)
Where do we get the money for these funds?
When we get our tax refund each year, we automatically refill our envelopes. We have a set amount for each category that we feel is adequate for our needs and we try to keep that amount in there at all times. (if we spend any of the money, the next time we get any extra money, we refill whatever envelope category that we previously used so we always will have funds available for each need. ) By doing the major part of the filling of the envelopes with our tax refund check, we don’t have to budget and take money out of our day to day living income for these items. (I know some people don’t receive a refund; Each situation/family is different — you may have to budget $20-$30 to put into your envelopes until you get them all supplied—any extra money, bonuses, stimulus checks, whatever means you come by throughout the year, use that money as well ! )
This past year, we, like most Americans, received stimulus money. We did a few minor projects we had been wanting to do around the house but the vast majority of that money went to our emergency fund and our envelope system... Why? Because there may come a time when we need that money and if we have already spent it, we won’t be able to use it when we really need it. Planning ahead now has sure saved us a lot of stress/heartache that we had to deal with previously because we didn’t plan ahead. I highly recommend this practice!!
-Tiphanie ❤️
—Stay Tuned for Part 3 tomorrow——————
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