Tuesday, September 20, 2011

Living Within Our Means (The Envelope System Way)

I had numerous discussions with my family, friends and colleagues about this issue. Some of the comments I got from yesterday's post also mentioned about how tough life is and how difficult it is to sustain our daily living. Prices of all basic commodities and services keep on going up and more often, we are facing the dilemma of having so many budget envelopes to fill. My answer to this is simple. "We have to live within our means". Why would we spend more than what we earn in the first place? We have to make a list of our budget and set our priorities. If your income is small, then you have to spend less on luxuries and just concentrate on the basic necessities. On the other hand, if you have a bigger income, then you can consider pampering yourself with some "little things" from which you can derive pleasure at. Our life style should coincide with how much money we make. I would like to cite this as an example....I had spoken with someone who was complaining about the burden of buying diapers and milk for his baby as the cost of these two things are relatively high now. I advise him to get away from diapers if they cannot maintain buying these and just use cloth diapers instead. I'm thinking, people of older generation can live without diapers, so that means it's possible to live without it. This is for comfort and to ease our everyday burden of washing cloth diapers but if we feel the difficulty stretching our budget because of this, so just get away with it. Same with our monthly bills...if we feel that we have so many envelopes to fill, then we have to re examine what is necessary and what is not. If we need to get away with everything and only stay with the electric and water bills, why not? If that's only what we can afford at the moment. When our resources increased then that's the time we add up on something that we really want and would make us feel happy and comfortable. Getting away with debt and the big interest associated with it is very important. That's why whenever I make a budget even before when our monthly income is really very small, I try to make a budget plan. First, I would list down all the normal expenses that a household would need to keep it running. I allocate a specific amount for each category. After I calculate and I see that the amount is not sufficient, then I go over my list again and cross out those things which we can live without until I'm able to balance the income and the expenses. This way, I could get away from debts which will just add up to my burden in the long run. I gradually increase my monthly budget as our income increases and this also translates to increasing the number of my envelopes. To attain financial security, planning is very very important. Sometimes, we feel upset for having only few pieces of envelopes to fill...but that's the beauty of life. Working on a specific goal is like a fuel that keeps us running and makes life more challenging.

I would like to reveal some of my tips based from my own experience. Last time, I prepared a number of envelopes which includes my "leisure fund", "savings", "goals", etc. But our income is not enough at the time to fill all those envelopes that I wanted to fill. So I just only pick those that are important and keep the other envelopes together with my monthly planner. Every time I open my planner and I see those envelopes, I always have that desire to keep on moving and find ways and means to increase my earnings so that one day, I could fill those envelopes. I always keep them at hand to inspire and motivate me. So, gradually...I would pick one envelope from those that I set aside and add it up one by one to my monthly envelopes until one day I just found out that all my envelopes are already on "active status". 

Figuratively, I would say that we are the ones controlling our envelopes. How many envelopes that we have to fill depends on us. At the end of the day, it's us who make the decision.

Having said this, I would like to stress that all the foregoing are just my personal views and opinions. It may or may not be applicable to some but then again, I'm sharing these things hoping that other people having similar experience can relate to me. Each person has his own life style and his own strategy to meet his desires. It's just a matter of choosing what's best for us.

Have a great day! :)


  1. in poor families like the urban poor communities i done my integration work when i was still a student, the envelope system is not their problem, their problem is paano magkakalaman ang kanilang sikmura sa kakarampot na kinikita

  2. I understand about your concern to those people in urban poor communities. As I said, each person has different life style and different needs. They have different problems that need to be addressed, it's more of a general concern. I'm referring to ordinary home makers managing their household within the confines of their monthly resources. Envelope system will never be applicable to those with almost zero income. I think that's a different story.

    Anyway, thanks for your insights.

  3. thanks for sharing this krizz... i used to practice the envelop system kaya lang may mga times talaga na hindi na nakakarating sa designated envelops nila yung pera kasi bills are waiting to be paid, etc..

    but i am really hoping to get the chance to use them someday...so instead of envelops what i usually do before my husband's payday is to list all the necessities or have a budget for what is needed tapos lista din lahat ng actual expense in that way, makita ko kung san napupunta ang pera...

  4. Hi Rovie! It's okay...kasi it depends naman talaga sa preference natin when it comes to budgeting. You have to do which way u are most comfortable with di ba? Thanks for the constant visit Rovie! :)


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