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Save on Holiday Gifts and Prevent Overspending

09.11.2015 by Marie // Leave a Comment

Are you thinking about Christmas yet? I know it’s early.  Some of you may even be complaining about the Christmas items showing up in store already.  However, if you want to save on your holiday gifts and prevent overspending, you need to start planning now. Don’t get stuck with a mound of bills and buyer’s remorse during the new year. These easy tips will help get you on the right track to rock your holiday budget this year.

Last year the average family of four planned to spend over $600 on gifts for immediate family! Join the #DIYHolidayChallenge to save on holiday gifts and prevent overspending this season!

The Numbers

According to an article published last December on Mintlife.com “mothers expect[ed] to spend $224 on average for gifts for each child” and a similar amount on their spouses (How Much to Spend on Christmas Gifts for Kids by Mary Hiers).  For a family of four, that adds up to over $600!  That number doesn’t even include extended family, friends, and coworkers.  Also, that is just what the women surveyed planned to spend.  How many people do you know (or perhaps have had it happen to you) that have been remorseful of overspending after the holidays?  Planning early can help you avoid this because remorse has no place in a season that is supposed to be filled with joy and love.

 

Save on your holiday gifts and prevent overspending by planning now with these tips! Click To Tweet

 

Determine Your Total Budget

The first step in planning is determining your total holiday budget.  This step is crucial to preventing over-spending.  Before you buy any gifts or even brainstorm gift ideas, sit down and think about what you realistically have to spend on gifts.  If your budget looks too small to fulfill all of your gifting needs/obligations, don’t worry.  I can help you achieve an amazing holiday on a small budget.

 

Join the #DIYHolidayChallenge to save on holiday gifts and prevent overspending this season!

Allocate Funds

Once you determine what you truly have to spend, it is time to divide that total amount among all of the people on your list.  Obviously your immediate family is going to get more of the budget than friends or coworkers and that’s okay.  Don’t worry if you are staring at only five to spend on a friend.  Again, I can help you with that.

 

Plan for DIY Projects

The caveat is that a small budget requires early planning and often a lot of do-it-yourself ideas.  Lucky for you that you have a secret weapon: DIY Adulation.

Starting now, subscribers will have access to a VIP only holiday page that will have a new frugal DIY gift idea every Saturday!  This exclusive page will help you create beautiful, handmade gifts for every person on your list that they will actually want.  How do I know it can be done?  I know because I have been doing this for our family for years now.

The Challenge

Every year we have saved more and more on gifts.  This year’s goal is a $500 budget.  Yep, $500 for all of the 30 people on our shopping list.  Sign up for our newsletter and be a part of this holiday journey now with a free printable Holiday Gift Budget available only to subscribers.  You will also get to see our family’s budget at the end of the season to see if I achieve the $500 holiday goal!  Join the challenge and save on holiday gifts this year!

Make this your most joyous holiday season ever by avoiding the overspending remorse later.  You can do it and I’ll be here to help you along the way.

See where I’m linking up!

 

Categories // Budgeting, Christmas, Finances, Holidays, Home, Winter Holidays

DIY Envelope System for Budgeting

04.21.2015 by Marie // Leave a Comment

Using envelopes as a budgeting technique is not a new concept.  However, it took me a lot of trial and error to find a system that worked for me.  A lot of people take the envelope system as this one-size-fits-all concept (I know I did) but this way of thinking ignores the uniqueness of people’s budgets.

Affiliate links may be used in this post. Ordering a product through these links may result in a commission. Read the full disclosure here.

If you are new to the idea of an envelope system, here is a quick overview:

An envelope system is a method for organizing and categorizing you budget.  This can be done with cash or electronically through some apps and websites.  Once you determine how much goes in each envelope, the theory is that you are “locked in” to those amounts (ie: not taking money from the Food envelope to pay for gas).

Hanging Quilted Organizer with text overlay - DIY Envelope System

With that being said, I am huge fan of the cash envelope system and after years of trial and error, I want to share with you the hybrid system that works best for me.  Feel free to tweak, alter, or totally re-invent this system to work for you.

What do I mean by hybrid?

For me, it is just not practical to do an entirely cash budget.  I don’t take the entire paycheck out of the bank to divvy up among all of the envelope categories.

Certain funds stay in the bank account so that some bills can be paid online.  These include payments such as the mortgage, utilities, and internet service.  You do want to pay these immediately, though, and subtract them from your balance.  Then withdraw remaining funds from the ATM and separate those into their respective categories.  (This percentage system is a great way to help you delegate funds).

How to Catagorize Your Envelopes

I used to use actual individual envelopes which were organized together by type:

Table of Envelope Budgeting Categories

Each item listed was its own envelope and in addition to the envelopes, I had a register for each one… um, are you seeing why this just wasn’t working?  I felt like I was constantly losing track and my budget was befuddled and I would allocate money into my “New Furniture” envelope in anticipation of the new mattress desperately needed only to have a part on the central air unit go bad and need replacing.  I tried obeying the “envelope law” of not taking from one envelope for another, but come on!  Is new furniture really a priority when it’s almost 90 degrees in your house?!

 

Blue Papers in Quilted Organizer

The solution to this problem?  Give yourself more grace.  Use an expandable file folder and break your budget down by more general categories like below:

 

Blue Sticky Notes Lined Up

This more lenient method allows you to be more consistent and stay on top of things.  Also, stop keeping registers for each envelope.  It is more work than it is worth and it doesn’t make you a horrible budgeter if you don’t.  Use this  percentage system and know they are getting the appropriate amounts.  As long as you are diligent with that system, you won’t have to worry about the money being there when you need it.

 

Open Quilted Coupon Organizer

Bonus Tips:

Don’t limit your envelopes to cash.  Include your gift cards, gift certificates, and more all filed in the appropriate categories.  Having it all in one place simplifies your life!

  • Use a binder clip on it and hang it from the wall on a push pin or small nail.  This lets you put it anywhere that is convenient for you and your family.
  • Skip the plastic filofax and go for a cloth or leather one.  This doesn’t have to be expensive.  You can get the quilted organizer pictured here for $5.

I’d love to hear about your experiences with the envelope system.  Any special tricks that work for you and your family?  Let me know in the comments!

 

See where I’m linking up!

 

Categories // Budgeting, Finances, Home

Easy Method for How to Budget Your Envelopes

04.21.2015 by Marie // Leave a Comment

When deciding how much of your money to put in each envelope of your budget, some are obvious.  You have a specific budget for your groceries (hopefully).  You know how many times you have to fill up your car in a given week.  These have repetitive, tangible numbers that make it easy to plan for.  Then you get to an envelope like Home Repairs or Vehicle Tags and you’re left wondering how much is an appropriate amount to ensure it is there when you need it.  To help out, I have a simple method for determining a percentage to assign to the envelope which can be applied to any amount of money.  This is an easy system to budget your envelopes each month.

This is a very math heavy and photo light post.  

If you can bear with me, it is worth it.

Pencil and Calculator with text overlay - How to Budget Your Envelope System

Find out how to use this easy system to budget your envelopes and save money. #budgeting #envelopesystem Click To Tweet

 

You need 2 numbers before you can do this calculation:

Your estimated Net Income

Know or Estimated Category Costs

 

**If you already know these numbers, you can go ahead and skip to step 3

Computer and Post-Its with text overlay - Figure out your net income

Step 1: Figuring Your Net Income

To figure your net income, take your hourly wage and multiply it by 40 (assuming you work a 40 hour week).  For example, let’s assume your hourly wage is $15.  Multiply that by 40.

 

15 X 40 = 600

 

Now multiply your weekly wage times 52 (the number of weeks in a year).

 

600 X 52 = 31,200

 

Next, take your yearly gross income (31,200) times .35 (to account for taxes and any pre-tax deductions taken from your check)

 

31,200 X .35 = 10,920

 

Lastly, take your gross income minus your estimated taxes and deductions.

 

31,200 – 10,920 = 20,280

 

$20,280 is your estimated Net Income.

stack of papers with text overlay - Determine Your Category CostsStep 2: Determine Your Category Costs

To figure your category costs, you need to know how much needs to go to each category.  Some of these can be estimated simply by your wants.  If you want to makeover your living room in 3 years, set a budget for yourself and divide it by 3.  For instance, say you want to spend $2000 on your living room makeover.  The formula would look like this:

 

2000 / 3 = 667 per year

$667 is the amount you would need to save every year to have the money to re-do your living room.  This same idea should be applied to all of your envelopes.  If you know that your Vehicle Tag Renewal is $187 each year then that is the amount that you want to make sure is in your envelope at your renewal date.

Step 3: Getting Your Envelope Amount

I have never been (and probably never will be) a mathematical genius.  Frankly, I am still waiting for the day that geometric proofs will become a staple in my life.  I have always loved ratios, however.  They are super easy and have many practical life applications, including helping you with your envelope budget.

Here is a basic ratio:

 

x/y = z/100

 

For our purposes, the ratio will look like this:

 

Known Envelope Amt/Net Income = x/100

 

X stands for the percentage of your total Net Income that is needed for your envelope category.  Going back to our Tag Renewal amount of $187 yearly, we can plug our numbers into the formula.

 

187/20,280 = x/100

 

Now, you simply cross multiply (and feel free to use a calculator… no need to be a hero, unless you’re into that sort of thing).

 

                                          187 X 100 = 20,280X

                                                          18,700/20,280 = X

                                                                       X = 0.92 (and a bunch of other numbers that you

                                                                       can just drop off)

 

Move your decimal two places to the left and you have your percentage:

Your Tag Renewal Envelope percentage is .0092%.  However, because you are almost always going to have that crazy long decimal (in this case .9220907298) you should always round your second decimal place up to ensure you have enough money in the envelope. Note the difference below:

 

20,280 X .0092 = $186.57

20,280 X .0093 = $188.60

 

Step 4: How to Use Your New Percentages

Okay, now that you have your percentage figured out, it’s time to put it to work.  You’ll be happy to know that this is the last step.  Yay!  You’ve just been paid and after you pay all of your bills you have your “extra” for envelopes (“extra” is actually already allocated, the word just delineates it for our purposes).

According to our calculations, your bi-weekly paycheck should be around $780.  Assume that after paying your bills, you have $137 left.  Here is the formula to figure out how much of that money goes to your Tag Renewal Envelope:

 

137 X .0093 = Amount to go in envelope

$1.27 is the amount

 

Pencil and Calculator with text overlay - How to Budget Your Envelope System

This may seem like a lot to take in, but the time it will free up for you in the future and the peace of mind you get from it is very worth it.  You will also become faster with practice.  I recommend reviewing your figures annually to account for pay increases and other changes to your budget.  Looking for an easy and inexpensive envelope system?  Check out mine here!

See where I’m linking up!

 

Categories // Budgeting, Finances, Home

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