Cash envelope system?

[mefordis]

Did you switch from credit cards to the cash envelope system? If so, do you know how much less (if at all) you are spending now vs with the credit cards?

Thanks!

 

[LJSquishy]

We do a virtual cash envelope system if you will. We use the YNAB software (You Need A Budget). I took several of the free online webinars and won a free copy the day before I was going to purchase it so I recommend taking the classes if you think you may want to buy it!

We are living almost rent free right now as we've been saving for our next house and have a pretty nice rent situation going on right now so our numbers are a bit inflated but since starting YNAB we have been able to save an extra 33% on top of what we were already saving. Our leaky categories (places where we had excessive spending) were clothing, eating out (not so much sit down restaurants but lots of little trips for coffee, dessert, or snacks), and a category which we now call Fun Money which we each now get a certain amount to spend on anything we want whether it's a book, DVD, game, extra coffee, earrings, etc.

It's been life changing for us -- it's allowing us to sign a contract on building a new house NOW instead of in two or more months like we initially planned. It will also work wonders for us once we have our new mortgage payment and other house-related expenses as I'm sure it will be an adjustment to have a huge house payment again. We've already budgeted our expenses with a mortgage so we know what each category looks like with that scenario and how much we're saving each month...no surprises with YNAB now.

 

[LJSquishy]

Also, we still use our credit card for all of our purchases so we can get the rewards from it but the point is that all of the money is pre-budgeted so it's all money you already have, you're not spending money you don't have. Credit card is always paid off and last month we got $40 in statement credit as rewards.

 

[tvguy]

We never found it necessary to go any great lengths to budget. We just made sure only the amount we budgeted was in the checking account, and when (or if) it was gone, we were out of money for the month.

 

[Chelley00]

I do it for groceries because I had a bad habit of just grabbing stuff to fill in for lunches and snacks and was constantly going over budget. Now I can't go over because I can only spend my cash at the store.

 

[Albort]

Credit Cards all the way. I also am another person who uses YNAB. I set my budget and watch how much money i use a month, then on the next month, i tend to try to spend less. the credit card rewards help out on travel as im gonna spend the money anyways, i might as well earn a percentage back on it and be able to use them to travel for free.

 

[pjlla]

I started using an actual envelope system about a year ago and I am LOVING it!! It does take some discipline but you know what.... Christmas is a month away and I have MORE than enough CASH ready to go shopping! I don't use the envelopes for daily/monthly bills like groceries.... I use it more for long-term expenses like a new car, snow tires, Christmas, vacation, and tuition. It is a HUGE blessing to know that when I have a big expense coming up, I have the money. When we used to try to leave it in the checking account, it would (slowly but surely) disappear.... a little extra spent here, a little extra spent there.... and before you know it the new car money or new tire money that I was counting on was gone! With the envelopes it is "out of sight, out of mind" until it is needed!

I will still charge many of my Christmas gifts in order to maximize my air miles.... but I have the cash to immediately pay it off! ...............P