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02 March 2012

Love my envelopes.

Remember that list I made after reading "One bite at a time" by Tsh Oxenreider? 

Well, I've done something unusual for me.  I've actually been working on it.

I know, weird right?  I usually make big wonderful lists and move on.  Kinda goes along with my hope chest full of fabric, my empty photo albums and the sad, sad state of the boys baby books. 

I thought I'd update you on how things are going with my list.   I've actually accomplished a lot, but only because I had already half started these projects.  I just had to finish them.

Goals I'm marking off this month:
Drink more water.
Establish a date night
     We've had 1 at home date and 1 dinner out.
Establish a budget
     While it's not the most in depth, it's a start.
Use the envelope system

This is the one I want to tell you more about.

I've mentioned before that we used the envelope system in the past when we were both working full time.  We paid off a massive amount of debt.  I really don't see how I could have became a mostly stay at home mom without doing this. 

We've gone back to the envelope system as of January 1st. 

It's not that hard.  We decided together how much money we thought we would need for each envelope.  We then went back and adjusted until it matched what we felt we could spend.  It's a work in progress.  We've added envelopes and changed amounts over the past two months based on our spending. 

Here's how we do it:

Each payday, I review the budget - bills that need paid, upcoming events,ect.
I then go to the bank and pull out the amount of cash I need.
The cash goes into the assigned envelope.
When you're out of cash, your out of cash.

Now, does that mean that if I'm out of gas and I need to go to work I don't go?  No.
It means that I need to take the time and plan ahead.  I need to think about how I'm spending my money.  And if I still run out of cash in an envelope, I need to decide if I'm going to take it from another envelope or go without. 

These are the envelopes we have for now:  groceries, gifts, eating out, entertainment, babysitting, school, gasoline x 2, clothing, spending x 2.

For us, not every envelope can get filled each pay.  Sometimes life is like that.  There's just not enough to go around.  But every little bit we add in helps.  Instead of being surprised or just picking up things at the last minute (and at full price), this system helps me to think ahead. 

As I put money into our clothing envelope last week, it made me think about how ratty Ronnie's church shoes are looking.  Then this week, I stopped in Gabe's and found a nice pair of brown leather Rockport shoes in (amazingly enough) a size 13 extra wide for $25.
I didn't have to wonder if I had money to spend on shoes.  I was able to look in my envelope and know what was there.  And in all honesty, for that price I would have borrowed from another envelope if I needed to.  It was a great deal.

The point is, it's much harder for me to part with cash then to swipe a debit card.  This really helps us with our spending. 

If you want a more in depth look at the envelope system, check out Total Money Makeover by Dave Ramsey.  It's available at most libraries or you can pick up a used copy cheap on Amazon.

It works for us.


Kathleen Guire said...

Pretty too! Jerry and I used to do this! Great reminder. I have been reading Success is Not An Accident with the kids and working on goal setting, finding God's gifts and talents for our lives and setting measurable objectives. One habit we have started is Thursday coffee out for discussion time with older teens. Thanks for confirmation.

247mama said...

We are envelope cash system people as well. However, I have never taken the extra step to make gas a cash system. We just always swipe the debit card for gas. Seems easier. Thanks for sharing.


Charli said...

If there is a bug in the system, the gas envelope is it. It's so hard to pay cash for gas..especially when the kids are with me. I try to make sure to get gas when I'm on my way to work by myself.