My Story: Broken Down Budget

by Anthony Howland

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Throughout the past year my wife and I have done a lot to streamline our finances and reduce debt. There are many things that I could write about but I have chosen something that is not so much a money saving idea, but more of a financial stress reliever. We are a young couple (in our mid 20's) and do not have a lot of extra money at this point, and month end has always been a stressful time.

As with most people, I'm sure, we would have some extra money at our mid-month pay, but at the end of the month we were lucky to get all of our payments paid on time and in full. Two or three days after the pay came in, the money always seemed to be gone after paying our mortgage, car payment, power bill etc.

We developed a budget that works in two week cycles based on our pay day. We have envelopes set up for each expense that we have totaling 10 categories. Now, instead of making our "monthly" payment once a month, we pay half of it each two week budget cycle. We did not limit this system to our monthly bills and payments however. Our water and sewage bill is issued to us every 3 months and is generally within $10 of the previous one so it is relatively easy to estimate what the next one will be in 3 months. Using our system, we make a payment to "water" each 2 week budget cycle totaling 6 equal payments rather then having to come up with the full amount once every 3 months.

One more good example is this: Gifts are something that we all buy for people throughout the year whether it be for a birthday or Christmas or whatever. We have a "gifts" envelope set up where we contribute $20 every budget cycle. When a birthday of a family member arrives, the money is there to cover the gift purchase without having to ask "It's Mum's birthday, where are we going to get the money for a gift?"

What this system has done for us is complete equalization of all the expenses we encounter month to month or randomly throughout the year. It has relieved a lot of stress because our expenses are always approximately the same. I hope that this gives a rough idea of how the system works. It has worked very well for us and I hope that others may try it out. It makes life a lot easier and eliminates a lot of stress.

My Story is a regular feature of The Dollar Stretcher. If you have information that can help others save time or money please send it to with "My Story" as the subject.

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