Onto February- Budget update

So January has come to a close and my husband and I were reviewing our budget like we usually do and we realized that for the past two months (December and January) there were some categories that we were having a really hard time staying within the set amount. Some of these areas were: blow money, baby, other, eating out, Target, Sam's Club, etc. so we discussed our goals for paying off our debt and the purpose of sticking to the numbers we had chosen to put in our budget. Then we discuss whether they were realistic or not. We made a few modifications but also decided that we are going to use a strict envelope system.

I had heard about an envelope system before from some people but never thought it would ever be something we needed to do. But, my husband does get cash tips from his part-time job and we were finding that it was easy to spend this cash even though it was already put into our budget, which was not only causing overspending in some areas but discrepancies in others. So we calculated what our estimate (on the low end) of his monthly tips will be and then chose which areas were appropriate for using cash. I then made up an envelope for each category and labeled how much cash goes into each envelope. For example, my eating out is labeled "EATING OUT- $40". Then I got out our stash of cash that was a mixture of his left over tips from January that hadn't been spent, money from selling some thing we had not been using and left over Christmas money. I then filled up each envelope with the predetermined amount and set them aside to use when February began.

Now that February has begun we have decided that any cash that comes into our house through tips, selling things, birthday money (for us- not the kids), etc. will be put aside for the envelope system. We will then divide up the cash on February 28th into the respective envelopes for March and any "left over" cash will be cash that is above what was in our budget and will go into a separate envelope to be deposited into our bank account quarterly and put directly onto debt.

The final change that we had to make for this month was adding new categories and redistributing money. We noticed that an excessive amount of money was going to the "OTHER" category so we wrote down all of the expenses and tried to find similar items. From this we found that we needed to add a category for the oldest two children for clothes as they are now in sizes that we have not been able to "stock up" on. We have continued to keep our "OTHER" category but will keep a running list in our notebook of the "OTHER" purchase and continue to look for patterns so we can add new categories as necessary.