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Creating a budget is critical in managing our household finances. Our budget not only allows us to plan and track where the money will be spent, but it enables us to direct the course of our family finances.
There are a lot of budgeting methods out there and I’ve tried some of them including pen and paper budget, excel, cash envelopes, budgeting apps, 50-20-30 rule, and zero-based budgeting.
There’s no shortage of useful budgeting methods, but what works for one person may not work for the next.
What works for our family right now is the combination of all these different methods: zero-based budgeting, paycheck budgeting, pen and paper budget, excel, and cash envelopes.
In this blog post, I’ll share with you how I manage our family budget and how I save money paying our utility bills.
Just a short background…
My husband and I work from home. My husband is a computer engineer / IT and I am a content publisher. My husband currently receives a fixed monthly income and he gets paid every 15th and 30th. I get paid once a month and my income varies from month to month.
My husband and I have different perspectives when it comes to money management. We used to have disagreements around how money is spent. There are times where we don’t always agree on our money choices but we realized that the key to getting past the disagreements is by listening, communicating our own point of view, and coming to a common ground or mutual agreement. We have to constantly remind ourselves that we are a team, not rivals.
Last year, I made a detailed plan on how we can handle our finances better as a family. It took me several days to make the plan. I made our budgets on paper and spreadsheets, I laid out our short and long term plans, I made PowerPoint presentations, printed them out and put them all together in a binder (funny but true), and I prayed about it for several nights before I finally presented the plan to him.
We discussed all the details, we considered each other’s point of view, and we came up with a more solid plan. I’m happy that our current spending plan – our budget – is working for us right now and we are on the same page in terms of our financial goals.
Anyway, here are the steps on how I manage our family budget.
5 Steps on How I Manage Our Family Budget
Step 1: I make a list of our monthly expenses.
Before I create a budget and start writing our numbers down, I need to know first where our money is going. Tracking our spending not only allows me to make a realistic budget but also gives me the numbers I need to use within our budget.
So the firs step is I write down all our expenses for the month including the fixed, variable, and irregular expenses.
- Food & Groceries
- Misc. Fund
- Husband’s Personal Fund
- Wife’s Personal Fund
- Family Support 1
- Family Support 2
Step 2: I calculate our expected income for the month.
I figure out how much money we earn per paycheck and we combine our income.
- Paycheck 1: ₱26,000 (every 15th of the month)
- Paycheck 2: ₱26,000 (every 30th of the month)
Step 3: I create a budget for every paycheck.
I budget the money we earn every paycheck and I split our monthly expenses between paychecks.
I follow the zero-based budgeting method where every peso we earn has a job. Any “extra” money we have left over from each paycheck goes to our miscellaneous fund.
Simply put, zero-based budgeting is Income – Expenses = Zero.
For example, if our monthly income is ₱50,000, then every line item in our budget should add up exactly to ₱50,000. And this leaves us with zero. ₱50,000 – P50,000 = ₱0.
This is our current and actual list of expenses in our household budget, but the the amounts are not accurate.
Paycheck 1 : ₱26,000
|Husband’s Personal Fund||1,000||15th|
|Wife’s Personal Fund||1,000||15th|
|Family Support 1||2,500||15th|
|Food & Groceries||7,000||15th|
Paycheck 2: ₱26,000
|Husband’s Personal Fund||1,000||30th|
|Wife’s Personal Fund||1,000||30th|
|Family Support 1||2,500||30th|
|Family Support 2||2,000||30th|
|Food & Groceries||7,000||30th|
With zero-based budgeting, every peso must have a plan. Now, this doesn’t mean that we should go on a shopping spree to force ourselves to spend everything. Instead, a zero-based budget means that we can account for every peso, and make those pesos work for us.
When we don’t assign any “extra” money a plan, we’re most likely to spend that money on unplanned expenses even if they aren’t necessary.
Step 4: I Use Cash Envelopes
We determine the categories that we need to pay in cash, we add them up, and we go to the nearest ATM to withdraw cash.
In our family budget, we spend cash for our house payment, family support, and food & groceries.
We split our house payment between two paychecks (15th and 30th) and we pay it in cash.
My husband and his siblings share a fixed amount every month for my mother-in-law’s medical expenses. We combine our house payment and mom’s allowance and we give it to her every 15th and 30th.
I also set aside an amount for my parents’ allowance every month and I give it to them in cash. When they’re in the province, I send their allowance through Unionbank online banking and they claim it at the nearest Palawan Express branch.
Food & Groceries
We buy our food and groceries in cash because we find it easier to stick to our budget when we know exactly how much cash we have on hand.
I also keep track of our food and grocery expenses by writing down all our purchases in my expense tracker notebook. This is the best way to know where exactly our money is going and how much we spend for every category in our budget.
We used to pay our groceries using credit cards but we find it hard to control our spending and it just doesn’t feel good (for me) to be paying for something that we have already consumed days ago.
And, as much as possible we want to avoid consumer debts so if we can pay it in cash we use cash. We use credit cards when there’s a good promo or when we make purchases online or when money is really tight or when we’re short on budget.
Step 5: I Use Online Banking Facilities
We have a BPI savings account which serves as our holding account where we put all our income in one place.
This is the account we use to pay the rest of our expenses including:
- Utility Bills
- Husband’s Personal Fund
- Wife’s Personal Fund
We give our Tithes/Offering thru online bank transfer.
I give my Tithe or 10% of my monthly income to the church, while my husband gives a certain amount from his income for church offering.
If you’re wondering why I give tithes and my husband doesn’t, the answer is – he’s not yet ready to tithe. I told him the significance of tithing based on scriptures, but I don’t force him to do it. I respect him and I know that in God’s time, he will eventually understand the value of tithing.
Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. – 2 Corinthians 9:7
We split our savings into 4 categories and we have a dedicated account for each category.
- Emergency Fund – BPI Save-up
- Sinking Fund – BPI Save-up
- Retirement Fund – COL Financial
- College Fund – COL Financial
Irregular expenses vary from household to household and are paid once per year or intermittently.
For example, my husband and I pay our family’s health insurance once per year. To avoid being ‘surprised’ by this annual expense, I set aside money periodically throughout the year in a sinking fund to make sure that I have money available when the bill is due. Because these expenses are irregular it is necessary to save incrementally.
Let’s say we need to pay ₱30,000 for our family’s health insurance. I’ll divide the annual amount by 12 (the number of paychecks allotted for this fund).
Based on these numbers I would need to set aside ₱2,500 per month if I began saving a month after I paid our previous health insurance.
If I paid our previous insurance in August 2020, I should have started saving up ₱2,500 per month starting September 2020, so that by August 2021, I’ve already saved the full amount of ₱30,000.
Irregular expenses have great potential to wreck our budget so we really need to spend a few moments on this step.
Our irregular expenses this year include:
- PhilHealth Contributions
- SSS Contributions
- Pag IBIG Fund Contributions
- Health Insurance
- Life Insurance
- Car Insurance
- Car Registration
- Car Maintenance
- Macey’s Tuition
- Travel Fund
My husband and I have separate accounts for our personal funds.
We have different hobbies and interests and we agreed that we use our personal funds for the things that matter to us. My husband uses his personal fund for his woodwork projects, computer games or gadgets, vaping, etc. I use mine for my blog’s maintenance, books and courses, gardening, health & beauty, etc.
I pay our utility bills online thru Shopee and I love it because I earn coins cashback and save money on our bills.
Before I learned about Shopee, I used to pay our utility bills using BPI and BDO online banking facilities.
How I Pay Our Utility Bills Through Shopee
Step 1: I check our utility bills statements
- Meralco –
- Manila Water –
- PLDT –
Step 2: I top up my Shopeepay Account
I add the amounts of our 3 utility bills and I top up that amount in my Shopeepay account through BPI Online Transfer.
There’s a ₱12 charge per top-up transaction that’s why I add the amounts so that I will only have to top-up and pay once.
Step 3: I take advantage of Shopee’s promos to earn coins.
I always check Shopee’s current promos and read the terms and conditions to get coins before I pay the bills.
Today, the promo is 15% cashback capped at 120 coins valid for one bill payment transaction only.
I used to earn coins per every bill payment transaction during the past two months, but today, the promo is only good for one transaction, hence I only earned 120 coins which is equivalent to ₱120 discount.
Step 4: I pay my utility bills and get a discount
I paid our utility bills including Meralco, PLDT, and Manila Water on Shopee using ShopeePay as payment method.
I was able to redeem 170 coins including the 120 coins I earned today and 50 points that was left on my Shopeepay account from my previous transactions.
That’s ₱170 savings from our utility bills and that’s exactly the reason why I love paying our utility bills through Shopee.
Figuring out how to budget can seem confusing in itself since there are so many ways to approach it.
For my family, zero-based and paycheck budgeting methods work for us. I’m also glad that my husband and I are now more involved and aware of our spending plan. And, like all plans, it should be discussed, tweaked, and revisited often to ensure that we’re on the same page when it comes to managing our finances.
Your budgeting method might be different and that’s perfectly okay. Budgeting is personal. It doesn’t matter what method you use or how much money you make, or what you spend on every month. What is important is you have a budget and you stick to it.
If you don’t have a budget yet, you can start by using my free monthly budget template. And if you want to know why you need a budget, read this:
How about you, how do you budget your money? What methods do you use to keep track of your spending?
Feel free to share your thoughts in the comments below and talk to you soon. 🙂