Tell me about the envelope system

[Irin997]

I'm having trouble sticking to a budget. I'm saving money easily enough but I KNOW I'm overspending when it comes to fun/entertainment and groceries. I was thinking the envelope system would work well for me. Give me your best tips and what different envelopes you have and how you do it.

TIA!

 

[Karenj2]

I don't use a physical envelope system, but I thought I'd bump this up to the first page again for you. (I use YNAB Pro - www.youneedabudget.com - it's a budgeting program.)

 

[Olivia'sMom]

Gas
Food
Fun
Clothes

X-mas
vacation
misc savings ($50.00)

I get cash out at the beginning of the month and place that amount into the envolope. When I buy food I ony spend out of that envolpe. If I buy clothes and fun I seperate them and have them ring them up seperate. I very rarely go over budget unless I want to. Seeing how fast the cash goes makes me think before I spend.

Good luck

 

[Teresa Pitman]

I watch the TV Show "Until Debt Do Us Part" and she uses jars. If I can remember correctly, her categories are:

Food
Transportation
Clothing
Entertainment
Other

She does a budget with fixed expenses (and she considers savings and debt repayments to be fixed expenses) then the jars are used for the variable expenses.

It's a good show, very interesting to learn about the challenges different families face. What I always find interesting is that some of the families have very low incomes and others have really high incomes, but you can get into financial hot water not matter what your income.

Teresa

 

[tonilea]

We do:
Groceries - includes paper goods and toiletries
Pets
Gas
Clothing
Car repair
Home Maintence
Entertainment - does not include vacation
Vacation - part of this is in a savings account and part of it goes into the safe.

We portion out the money every paycheck. DH gets paid every other week. I have a spreadsheet with a spending plan based on the minimum amout he makes every two weeks. It self calculates, so I have the income at the top, with the catagories under and when always make sure that every dollar is accounted for - a zero based budget.

I don't particularly like going to the grocery store with cash, but it has really kept our spending under control. If I don't make it to the bank and have to shop using my debit card - I always spend more. Just a little of this and that can add up in a hurry.

 

[tonilea]

you can get into financial hot water not matter what your income.

Teresa

Truer words were never spoken.

 

[RN01]

We use those "envelope folders" {not really sure what they are called} that fold out and have 7-8 slots in them. We have a slot for anything we would spend money on ex: gifts, hair cuts, dr visits, car repair, food, entertainment, etc. My husband has it all budgeted out on the computer on how much money we spend in each catagory and when we get paid he puts that much cash in each slot. When we have a dr. appt we go to that envelope and get out the money we need. I love it because I know there will always be money there for what I need instead of hoping there's enough at the end of the month for everything like we used to do.

 

[richmond282]

Our envelopes (yes, we use actual envelopes) include:

Groceries and toiletries
Eating Out (This is where we tend to go over so, we gave it a seperate
envelope)
Car Maintenance
Medical and Dental
Entertainment

My husband and I each get a set amount of "spending money" too. That can be used for whatever we want.

I have to say the envelopes do keep spending in check. We assess our budget every few months to determine if we need to adjust what goes in each category.

 

[kellia]

Do you guys keep all the envelopes with you in your purse (or whatever for guys! ) or just take some before you leave? Also, do you still keep a debit or credit card on you for emergencies? My biggest fear is running out of gas money since I work so far away!

Also, do you take money out of another one if you need it or are you pretty rigid about keeping it in that category? Do you use a calculator in the grocery store as you are adding things in?

We are thinking of doing this, those little trips to the store just seem to cost way too much after adding in impulse buys.

 

[kellia]

I watch the TV Show "Until Debt Do Us Part" and she uses jars.

When is this on and what channel?

 

[rluey29]

Could someone tell me how to do the spreadsheet on the computer and what program you use?

 

[tonilea]

Do you guys keep all the envelopes with you in your purse (or whatever for guys! ) or just take some before you leave? Also, do you still keep a debit or credit card on you for emergencies? My biggest fear is running out of gas money since I work so far away!

Also, do you take money out of another one if you need it or are you pretty rigid about keeping it in that category? Do you use a calculator in the grocery store as you are adding things in?

We are thinking of doing this, those little trips to the store just seem to cost way too much after adding in impulse buys.

I use the basic envelope system that came with our Financial Peace University Class. It is over a year and a half old and is starting to fall apart. I plan to buy one of the deluxe versions. You can get them at www.daveramsey.com - but you certainly don't NEED them. A cheap coupon holder and some index cards would work just as well.

As far as being worried about running out of gas money - the first few months you use the envelope system - take out more cash than you think you will need. Then adjust it as you go.

I do shop with a calculator. It is a PITA, but it works.

Any budget takes time to get it running smoothly. At first, you may find yourself struggling, but just be patient. We have been doing the envelope system for over a year and a half and we are now debt free and it is so easy it only takes a few minutes a week.

We do keep a debit card, but rarely use it. Since we are now debt free, we are a little more relaxed.

 

[tonilea]

Could someone tell me how to do the spreadsheet on the computer and what program you use?

I just created my own spread sheet on Microsoft Works. It isn't very complicated - or I wouldn't be able to do it. Back when I was in school we were taught computers on Tandy computers.

 

[Teresa Pitman]

Kella, Til Debt Do Us Part is a Canadian show on the "Slice" network. I don't know if you can get it anywhere in the US. I like it a lot. She works with couples who are stressed out about their finances and over one month, gets them to change what they do, and creates a plan for them to get out of debt and build up savings. Sometimes it means they need to get a part-time job, or sell their home, or make some other fairly drastic changes. Some couples jump right in and do what she asks, others really resist and don't want to make the changes.

At the end, she gives them up to $5000 to help pay down their debts. If they haven't done all the things she asks, they get less money. She also usually gives them a gift - sometimes a trip, sometimes something they need (on one episode, she gave the wife a really high-quality camera because she was trying to build up a side job as a photographer).

Teresa

 

[Olivia'sMom]

Do you guys keep all the envelopes with you in your purse (or whatever for guys! ) or just take some before you leave? Also, do you still keep a debit or credit card on you for emergencies? My biggest fear is running out of gas money since I work so far away!

Also, do you take money out of another one if you need it or are you pretty rigid about keeping it in that category? Do you use a calculator in the grocery store as you are adding things in?

We are thinking of doing this, those little trips to the store just seem to cost way too much after adding in impulse buys.

No I never borrow from another envelope. If I don't have the money I don't get it. I carry my food and gas money with me.

I don't use a calculator. We do our big trip once a month and go back weekly for bread and milk. After the big trip I can see how much is left and split it up into the number of weeks that are left, that way I know how much I can spend on "impluse" or special buys. Also for your big trip make a list and stick to it. When I was first starting out I would take my list and go to one store and I would write down the prices of things on my list . Then I would go to the store that I felt was cheaper and do my shopping, but if the other store was cheaper I would wait and buy it there. I know that sounds like I lot of work but the first store was close to work so I would go during lunch. Now I look at the ads and shop at the store that overall cheaper. But buty the special at he others. I hope this helps.

 

[Louisianafive]

Do you guys keep all the envelopes with you in your purse (or whatever for guys! ) or just take some before you leave? Also, do you still keep a debit or credit card on you for emergencies? My biggest fear is running out of gas money since I work so far away!

Also, do you take money out of another one if you need it or are you pretty rigid about keeping it in that category? Do you use a calculator in the grocery store as you are adding things in?

We are thinking of doing this, those little trips to the store just seem to cost way too much after adding in impulse buys.

We keep our envelopes at home(in a safe place). We take what we know we are going to need. This systems actually helps you plan just about everything you do! I hate having surprises in a store!
And yes, a calculator is a MUST when I shop.

 

[DreadpiratK]

Kella, Til Debt Do Us Part is a Canadian show on the "Slice" network. I don't know if you can get it anywhere in the US. I like it a lot. She works with couples who are stressed out about their finances and over one month, gets them to change what they do, and creates a plan for them to get out of debt and build up savings. Sometimes it means they need to get a part-time job, or sell their home, or make some other fairly drastic changes. Some couples jump right in and do what she asks, others really resist and don't want to make the changes.

At the end, she gives them up to $5000 to help pay down their debts. If they haven't done all the things she asks, they get less money. She also usually gives them a gift - sometimes a trip, sometimes something they need (on one episode, she gave the wife a really high-quality camera because she was trying to build up a side job as a photographer).

Teresa

Wow, where doe we sign up???

 

[richmond282]

I keep the grocery envelope and eating out envelope in my purse usually. The others are kept at home. When we need $ from those we either take $ out of the envelope or take the envelope.

In terms of gas, we have a gas credit card. It is only used for gas and paid in full every month, no exception. I just don't feel comfortable keeping that much cash on me or at home.

 

[kellia]

Thanks! Next week when we both get paid, we are going to take cash out and start doing that!

 

[Irin997]

Thanks for the tips guys! I knew I'd need envelopes for gas, groceries, fun/entertainment but I never thought to add one for clothes. Now comes figuring out how much I need in each category! Thanks again!