Do any of you use the envelope system advocated by Dave Ramsey? Well, I do, but only for my regular grocery shopping and mad money. For more than a month now, I have been going to the bank and getting out a certain amount of cash to spend on groceries. For the first payday of the month, I always allocate more. That's when I stock up on stuff and when I also am usually out of a lot of stuff. At first, I was only doing this because my debit card number had been stolen and so I was without a card for about 10 days. Now, I see that this system actually works to keep me on track with my spending. Sometimes, things happen for a reason. I can actually predict within $5.00 or $10.00 what I will spend and not feel deprived at all. Before this, I think I probably spent a lot more because the money was "invisible." By the way, my mad money is money I can spend for snacks, lunches, etc. without having to worry about it.
Envelope System
November 27th, 2009 at 07:55 pm
November 27th, 2009 at 11:59 pm 1259366397
November 28th, 2009 at 12:20 pm 1259410856
With the 'spending plan' software mentioned above I found I hated things going red (overbudget) in my categories when I overspent so it curbed me from bad habits fairly quickly and I learned to estimate what enough was in each category so I didn't underfund certain envelopes.
Long before I used envelopes I used to use baby food jars to do budgeting with. That method also worked well with teaching my kiddos about the budgeting process.
November 28th, 2009 at 01:13 pm 1259413998
November 28th, 2009 at 06:07 pm 1259431635
November 30th, 2009 at 02:42 am 1259548929
Physically, the entire lump of money still sits in my credit union account, all earning 3% APY. I track it down to the last cent too, so it works for me.