I’m sure everyone has heard of the cash envelope system by now. I had heard of it plenty before I gave it a try.
Gage and I were both pretty bad at just sliding our debit cards everywhere without considering how much we were spending. It didn’t cross our minds at the time how many bills we had left to pay. We would end up with nothing to show for the money we had made and bills still left to pay. Every been there? I had heard of Dave Ramsey’s Cash Envelope System and didn’t ever pay much attention to it. That was until we had a guest speaker at a mom’s event at my church. He talked about the benefits that he had experienced from using this system and being on a budget.
How to use the envelope system:
I talked to Gage about using cash envelopes for our budget and we decided to give it a try. Basically, you calculate your total income and you calculate your total bills. You divide it up and decide how much you need to take out of each pay check to pay your bills and you put it in the envelope for that bill. If you have money left over after your bills are paid, you then make cash envelopes for other needs or things you like to do monthly.
For example, we have envelopes for future medical, school needs, vacation, mission trips, etc. You make sure that every dollar coming in has a place that it is going to. I would also recommend that one of the places it is going is to savings. We still do our savings through the bank. We each have a certain amount of “play” money each check and a certain amount of “food” money. Once we run out, we must eat from the groceries at home instead of eating out for lunch.
Carrying Cash Instead of Cards:
I did have to start using a longer wallet than my little strappy one I had used before. I labeled note cards with things like, “groceries, fun, clothing, food, etc.” I placed them in my wallet to separate the different money. Although, I’m still trying to figure out a better method, because I still tend to mix all my wallet money up. The rest of the money stays locked up in the designated cash envelopes.
This has saved us so much time and money, it is ridiculous. I used to tend to forget about the water bill and end up on hold forever and paying a late fee. Now, I have the dates of every bill written in my planner each month. Our budget is now down to a science and everything is paid on time. Now we don’t get into arguments about who spent what out of our checking account when we had bills left to pay. We paid off all of our credit cards last year using the snowball method. That made it even easier for us to start budgeting right after that.
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