Oh my! DH & the Dave Ramsey envelope system!

[wdwmom0f3]

My DH has been a fan of Dave Ramsey for years now and we have somewhat followed his plan which has helped us a lot. We just owe on our house & one car. We have never used the envelopes though, and DH thinks that we should try it to see how it goes. Suddenly I feel like I am being cut off from unlimited funds and I am freaking! Please tell me this will not be as hard as I think it will be. I am all for saving money, because I am trying to put money back now for a Disney trip in May, but I LOVE my debit card and if I carry cash it's GONE in no time at all. HELP! Do you have any tips or advice that will help me? What has worked & what has not? Also, what envelopes do you use?

 

[JandJ]

We didn't use Dave Ramsey, but we do use virtual envelopes and count credit cards just the same as cash, paying them in full every month, so I can't give you specific advise, but I can tell you that when DH and I got married I knew this budget system was in my future and I went into it kicking and screaming. It took me a good 6 months to embrace it. Now, I would never go back! Before we were married I was in debt, not extreme, but I had 3 credit cards and all had balances. Now, no debt except our mortgage which is very reasonable. We use Quicken to manage our virtual envelopes and it's the best system! We never argue about money or where it's spent.

The best advice I can give is to make sure you and your hubby agree on how much is to go into which envelope. We figured that out by tracking every penny we spent in Quicken for 3 months - and I mean every single penny (for example .65 in the vending machine got tracked as vending; $5 donation to the neighbor kid's school got tracked as charity; etc.) - and we still do track every penny. That way we're sure we're sticking to the virtual envelope budget system. After nearly 5 years, I have to say, it's the only way to go

Good luck and I bet in 6 months or so you'll love it!

 

[minnie1928]

I too am following DR's plan, but modified for us. I found that I actually spend MORE if I use cash. You can still have envelopes...virtual envelopes in Quicken or some other method. That way you can keep your debit card, but still utilize the envelope system.

 

[tlbwriter]

Yes, try the virtual envelopes. I don't like to carry cash either. But if you carry a list of the amount of money in each "envelope," and subtract what you spend using your debit card, you can use the system without having to carry cash.

 

[pattiteach]

K- we do the envelopes. I carry a coupon organizer-like thing in my pocket book that has a place for food& gas. I take money out for those church, husband pocket money and mine, allowance for 3 kids, cleaning lady, spending and entertainment. When the cash is gone it is done. It works well for us.

 

[vicki_c]

I like YNAB (You Need a Budget) software for the same purpose. It's a budgeting system that is basically virtual budget envelopes. We replaced MS Money with YNAB on the computer, then purchased their iPhone app when it was released, so the amount in our virtual envelopes is always right there with us on our phones (although you do have to sync to the computer - unfortunately they don't have any syncing in the cloud capability yet - only to your computer).

 

[mom2d&b]

Long long ago I used to use "real" envelopes but there became to cumbersome for me. I currently use my debit card for 99% of all purchases. I have my account linked to Mint.com so all charges are posted there and I then put them into categories. Much like a virtual envelope system. I love mint.com

 

[mrudman]

We started using a real envelope system about 10 months ago, and I LOVE it! Was little hard at first knowing once you're outta cash, you're out.. but now we usually have cash left at the end of each 2 weeks period (get paid every 2 wks).. it's been awesome for us.

 

[dislvr74]

We've been a cash family for 10 years now and I love it. We used to do separate envelopes, but found that we were just borrowing from one envelope when another was empty. Now I just withdraw cash every week and we keep it in one big pot. (I do maintain a sort of "slush fund" in the checking account for unexpected things like a trip to the doctor or for when my DH forgets to bring cash with him and uses the debit card.) We keep the cash in our safe and don't carry the full amount around with us. I'm afraid if we did that we would spend it too easily.

 

[NJDisney]

Long long ago I used to use "real" envelopes but there became to cumbersome for me. I currently use my debit card for 99% of all purchases. I have my account linked to Mint.com so all charges are posted there and I then put them into categories. Much like a virtual envelope system. I love mint.com

Is it easy to move each debit to a different category on mint.com? I signed up and have many of my accounts link but that's about it

 

[wdwmom0f3]

OK, you all have made me feel better. I have been pouting all day about it. He hasn't noticed, but it has stressed me out. My goal is to have money left at the end of each two weeks to go into my Disney fund. I hope that this works well. It's worth a try anyway.

He set up 7 envelopes for me today. Cheer, gas, food, medical, school lunches, clothing, and Misc funds for extra emergency cash. I hope that I can keep all of this straight. All of our regular bills will come from checking because they are about the same each month. I think I can do this. I have to see the positive, and you all have helped with that so thank you!!!

 

[NewmanFamily6]

I'm not going to lie to you I cried a few times when we first started it.Once you see all the progress you are making though you feel a little silly.

 

[jimmytammy]

We have doing the Total Money Makeover system(Ramseys)since Apr and it has been great! The envelopes are a great system to use. Ramsey and his DW still use them, and he has become a multi millionaire. Not saying using envelopes will do it, but point is, he is has gotten to this stage and still feels it necessary to use them.

It is hard to give up that extra spending $$, but once you do and begin to accumulate, man what a free feeling it provides!

 

[TnTWalter]

I could never do the cash thing....

So I had envelopes with 'Grocery' Household Entertainment etc. and the amount budgeted for the month at the top [like I had that amount of cash in the envelope].

I would then take the receipt and write the amount and bring the total down. So let's say I had $400 in an envelope and spent $100. I would now have $300 on my envelope.

The other benefit is I knew where my receipt is if I want to return something.

I have YNAB but there's something about the power of the envelope when you open your wallet....YKWIM?

Trish

 

[nunzia]

We've always been pretty strict with our 'extra' cash. All we owe right now is the mortgage and a couple medical bills that don't have interest, so I'm just paying them on a monthly plan. I budget tight..bills, extra toward the house, savings for retirement, trip, emergency, toward annual bills, I then put money in envelopes, one for each week until next payday. I then leave some extra in the checking account and we debit things like gas and some grocery..we buy stuff on sale and I just reorganized my freezer and we should really just eat of that for a year...We do pretty good this way. I always have the extra in the checking acct..things come up like sharpening the chain saw..and his brother's chainsaw too..so $23.00, and etc etc. What is left over in the envelopes gets thrown into a box to use as cash during vacations...it adds up! We are both really frugal, so a little goes a long way. I do use the CC and have carried balances in the past, but now just find a way to pull from somewhere to pay it off each month. If I've charged things like gifts the pay off comes from our regular paycheck budget (I live in a tiny town and there is really no where to shop unless you adore Walmart or KMart), big items, like hotel bookings come from the trip fund. Recently we've been booking and paying for a whole year of trips coming up, plus planning another small trip in December and paying for our son in Denver to come also since it's tied in with other son's Police Academy graduation, so that's more extra. When big things like this really start piling up I juggle the budget AND pull from savings, but know it will go right back in.

So many people seem to really like mint.com..I always thought it would be just another security risk...I'd like more input on how all of you use it and how you like it?

 

[labdogs42]

I like the virtual envelope idea. I may have to check out those sites! We use Quicken, but it isn't enough right now. we need a little more structure. Thanks for the idea!

 

[Virgderon]

Just want to put in a plug for the No Spend thread here on the Budget forum. I have been on it for about 4 months now, and it's really useful for tracking discretionary spending. I post what I am buying every day, and it's easy for me to go back and see what categories I am spending the most in. It keeps me honest too.

I think most people focus on the the "no spend days" total and get discouraged, but the real beauty of the thread is that you are keeping track of what you spend and hopefully staying under budget.

I like that you get support too. I find Dave a bit too extreme. I get that he has helped a lot of people, but I'll take the debt snowball and leave the rest.

Anyway, tracking your spending on the No Buy thread might be a "baby step" to build the discipline to do an envelope system. If nothing else it will be an eye opener. The first month I did it , I was shocked at what I spent in certain categories.

 

[rbork]

15 years ago..we used a black box. Looked like a coupon box with a couple tabs.
Grocery, Entertainment, Gas, and Personal Spending (that included eating lunches out, coffee trips, clothing etc.) We used ACTUAL cash. It worked great although it was hard to convice DH to try it at first. When the Entertainment money was gone, it was gone and that meant we had to say no to some invitations or desires to eat out etc. But it did "train" us well and we were able to stay debt free. It takes a commitment from both spouses and good communication. DR system sounds like our elementary system we had more than a decade ago.
Wish you luck and applaud your efforts.

 

[minnie1928]

I like the virtual envelope idea. I may have to check out those sites! We use Quicken, but it isn't enough right now. we need a little more structure. Thanks for the idea!

Not to be nosey, but I'm curious...what kind of structure are you looking for? I use Quicken HARD (except for their budgeting piece, that's a mess) and I've found ways to make it do everything I want or need it to do. If you have a particular issue I might be able to help you figure it out?

 

[danielephant]

focus on the family has a money map and they have an "envelope" system that is just like balancing a checkbook... you keep your debit card and just log ALL your spending. and they have the logging sheets on their website that you can pring for free i will post the link