I've already talked about the debt we have... and we know how we got ourselves into debt: living above our means. We both make good salaries but we used the excuse of living in an expensive area to spend more than we made. 

For the last couple of years, we've been trying to correct that. To help us budget, we use an envelope system. (This was much easier before Covid when you could actually go to the bank and withdraw cash in any denomination. We have had to modify the way we budget the last several months.) We have several sinking funds where we literally store the cash in an envelope until it's needed.

I have been told before that we have too many envelopes, but we have determined these are the categories that work for us. 

Here they are in no particular order.

     Car Repair - this is almost all things care related: repaires, parts, tires, etc.       It does not include insurance.

     Food - Self explanatory

     Gas - Self explanatory

     Clothes - clothes, underclothes, socks, pajamas, etc.  

     Hair/Self-Care - Hair cuts, (occasional) manicures/pedicures

     Essentials - Things like toilet paper, shampoo/conditioner, deoderant,           cleaning supplies, etc.

     Kids' Activities - Sports and dance expenses

     School - PE uniforms, pictures, yearbooks, field trips, sports fees, ASB             cards, etc.

     Pet - Dog food, shots, vet bills

     Christmas - gifts, food, Christmas tree

We have health insurance through The Husband's work (dental and vision insurance are through my employer) and we set aside a small amount for medical costs in an HSA at the beginning of the year through The Husband's work.

We also have a separate account where money is deposited from each paycheck to cover our yearly car insurance, giving to our church, and some small extras. We do plan for these expenses, but they aren't part of our envelope system.

For the most part, we carry money over month-to-month. Some months we don't need all of the money we put in the envelope and some months we need more than our monthly allottment. This has worked pretty well for us. 

We are still in debt, but since we have been using the envelope system, our debt has decreased and we have done better at managing our money and living within our means.

We also continue to contribute to our retirement. (I know a lot of people are against that when you are in debt, but we feel it's what is right for us.) I will do an entire post about our retirement contributions in the near future.