Between 2007 and 2008 my life will have undergone so many changes that impact my financial situation. All of them are good changes, IMO, but it's still kind of making my head spin. In 2007 I: Moved out from my mom's and started paying rent at a much higher rate. Got a new job that pays significantly more, but causes me to need after school childcare for DS8. Had my son, who up to this point hated all sports/extracurriculars decide he really wants to play hockey, basketball, and soccer, learn the guitar and filmmaking and take up tae kwon do! In 2008 I hope to: Buy a car (which means car payment, insurance, and gas, but also hopefully significant savings in terms of taxis, and changing how I shop) Adopt a second child (which has no financial upside, but will be worth every penny!) Anyway, if I am able to add a second child I will need to start budgeting more seriously than I have in the past, and I think the "envelope system" that people talk about here makes sense to me. The problem is that I have absolutely no idea how much to put in each envelope, up to this point I have made enough that I simply making frugal choices when I could worked fine, but now I'll have daycare which will probably push me into needing to really budget. Anyway, can people give me a sense of what their envelopes contain. To give you a sense of where I am financially, with one parent and 2 kids I'll probably have about $1,000 a month left over after the following have been paid: rent utilities (only internet, phone and cellphone everything else is included in rent) health, dental and vision insurance car payment car insurance retirement savings aftercare/daycare/summer camp for both kids 2 after school activities at a time for DS1, none for the new child, who I am hoping will be too young to want them What other categories do people have in their budgets? Food, gas, emergency fund, entertainment? What am I forgetting? Also, I'd love to hear strategies people use for keeping their spending low. Thanks!