A Closer Look at Our Family's Cash Flowchart Process and Budget

My husband loves to see percentages while I search for exact numbers. I never really saw his point until he showed me his version of how our cash flow looks like. On an Excel Spreadsheet is where he meticulously assigned values in percent for all these:

Income

(net: less Tax, Retirement, Health insurance, Disability Benefits, Life Insurance and HSA contribution)

Less Giving

tithes, charity and personal cause

 (Check issued for tax write-off and to set example for our kids.)

Less Savings

(6 months of living expenses if not yet attained), college fund, Christmas savings, vacation basket and personal fund 

(Automatic) 

Less Mortgage and Utilities 

(Automatic Payment)

Less Groceries, Gas, Miscellaneous and Kids' Paycheck 

(Cash)

Extra Income goes to House Pay Off. 

The Net Income should be 100% after tax and pre-tax deductions. The Giving, Savings, Mortgage, etc and the other monthly living expenses are assigned percentages that total the net income. Depending on the amount needed for that category is how we determine to assign the rate of percentages. Although this varies and plenty of tweaking are expected, it is good to know that all the money earned are allocated for different reasons but towards the same purpose of living well. No more lies, no more leaks, and most importantly, no more arguments because everything is transparent. 

We have weekly, monthly and quarterly family meetings. I encourage all families to have these because aside from being able to spend time with each other, each member of the family will know the financial situation. If we're barely keeping our heads above water or we're already on easy street, each member deserves the right to know. A weekly meeting is every Saturday, the kids' payday. It's just a simple inventory of the pantry and a chance to suggest menus for the week. Then, comes the monthly meeting, our favorite because through this, depending on how much money left, we get to celebrate the fruit of our patience by eating out or grabbing some Pizza. Quarterly meetings are mostly spent in front of the computer screen tweaking the percentages of each category. This is where we see the rise and fall of our assets over liabilities. When our liabilities are still much greater than our asset, we know we still can't afford that Coach bag in the mall. It gives us more direction to where we're heading. We print a copy for our household binder and save one to a designated hard drive.

Notice the ladder of priorities...

Tithes and charitable giving are budgeted first because our family believes in giving back as a gratitude to God for the income and all the blessings received. On my previous blog

http://treasuresinthemundane.blogspot.com/2014/10/staying-in-budget-while-living-large.html, 

I mentioned we always write check to set example for the kids. And by doing so, there is traceability for tax purposes.

Next is savings. Always pay oneself automatically first to avoid the tendency of missing the opportunity. Money spent will be gone forever so plan to only live by whatever is left after Giving and Saving. Make sure to gather emergency funds enough to sustain your family for months of no work. Our family decided to save up for 6 months of living expenses, that is the total monthly expense for mortgage, utilities, groceries, gas and tithes. We can hold off other savings and investments for that time being. And the kids can definitely help with chores without pay. That way they can take part on the temporary hardship. 

Mortgage is the 3rd in priority. A house that still carries a mortgage is a house that isn't yours. That's why we prefer a smaller home with smaller mortgage and lesser expenses. If you still owe somebody something, make sure to insert that here too and pay it off before even thinking of paying off the house. Pay your creditors as fast as you can to get as much joy in your life as you can. Even if you're setting aside money for emergency fund or Christmas savings, it won't make sense if you're still paying high interest loans. There is so much you can do when you live a debt-free life. You can use that voracious interest you're paying right now to enjoy a paid off vacation to the Philippines or to shower blessings to the less fortunate this Christmas. Moreover, you sleep better at night than sweat of fear for the uncertain. Utilities are in this group too since payments are made automatically in order to facilitate more time for important matters.

Finally, live with what's left for groceries, gas, etc. This is where creativity flows. My husband always emphasizes the difference I made as a stay-at- home mom in this category. Even though, any extra money left on this area is not at all enough to expedite the house pay off, but the lack of control to stay within the means will create an enormous impact, a disaster. So as much as possible, it is pertinent to nail the budget. After many analyses and discussions, we've finally reached a verdict of setting aside only $400/month for groceries, $500/month for gas and car maintenance, $100/month for clearance and Goodwill items on clothes and of course, some Avon, etc. and $100/month for kids' paycheck. 

The $400/month for groceries is so much more than enough for us as a family of 4. Here's what we did to stretch our dollar in order to fit much happiness within:

1. Overall inventory monthly and menu making weekly. 

-I search my freezer and refrigerator for meat and scan my pantry for dry goods and sort them by list (so I know how much of the kind of meat and other ingredients I need to shop) like this: 

I used to do monthly meal planning but the unforeseen cravings killed me so I reduced it to weekly. That way, my family will have the chance to request their own favorites for that week. While they're aware that Monday is chicken day, Tuesday is soup, Wednesday is for leftovers, Thursday is other meat, Friday is for fish, they are also given the weekends to wish for pancit or barbecue. Saturdays and Sundays are usually feast days with desserts. 

2. Determine the actual daily budget.

-If we have a budget of $400/month, then we can only have $13.3/ day on a 30-day month or $12.9/day on months with 31 days. This is absolutely no way to afford eating out. For a family of four, this is just a tip. That's why it is important for us to make our own pancake mix and other cake mixes to help defray other costs but still eat the same good food. Trust me, mixes are truly budget savers. I use either the calculator I have on hand or a quick estimate on my brain to determine if the 3-lb meat for $12 will last us in a day. If not, then I continue to search until I find items that will miraculously multiply through soups, beans and casseroles. 

3. Weekly and monthly shopping

-Although, I plan to shop monthly based on the overall monthly inventory (which usually works when I get my list straight ahead) and only weekly for produce and some as-needed items, I still fall short forgetting some items so I had to sit down and make myself a system. It seems to work but I hope it will with you too: 

And while I'm planning my shopping list, this is also the time for me to browse through my Cash Back Apps, Ibotta, Checkout 51, Shopmium and Shopkick in order to get the most of my budget.

When in Walmart, I never leave the store without making use of their Savings Catcher.

4. Celebrate No-Expense days with inspirations. 

http://treasuresinthemundane.blogspot.com/2014/10/diy-tin-can-project.html

-We call these DIY days since we usually do some projects out of materials we already have. Aside from fattening our savings, we are able to allow the kids’ imaginations to soar and spark their ingenuity while saving Mother Earth.

5. There is always something to be thankful for.

-Matthew 6:27-29 “And who of you by being worried can add a single hour to his life? And why are you worried about clothing? Observe how the lilies of the field grow; they do not toil nor do they spin, yet I say to you that not even Solomon in all his glory clothed himself like one of these.”

When the going gets tough, I cling to this verse. I look back to realize how God has been so generous to us, providing us with every need even if at that moment, we feel anything cannot possibly suffice. At the end of the day, as we find ourselves with each other, wrapped in the mantle of God’s protection and love, we are grateful. Everything is temporary. My husband’s job won't be there forever, anything will cause our disappointments, our cash flow process and budget can fail but with HIM, we will always find abundance. It always pays to seek treasures in the mundane!

I hope you are enjoying the journey as much as we are!

Love always,

Maria (Ehma) Porpio