Want to read about the rest of the Budgeting 101 Series? Find it: HERE.
Budgeting 101: Class 1
“My” Envelope System
(Download Printable Envelopes at the Bottom to try yourself.)
Have you ever heard ofDave Ramsey?
He gives excellent finical advice.
He's the man behind: Financial Peace University, Seven Babysteps, Total Money Make Over, and more.
(Want to know more look: here)
After listening to him and going through his budgetingsystems I really liked his philosophy and his strategies.
BUT…It doesn’t completely work for me.
I know that should be a red flag.
But, honestly I had to be realistic about howI manage my budget,
because if it is too hard to keep up on, then I won't followthrough.
My Issues Were:
-Paying Cash for everything
-Different Envelope of Cash for each category.
-Charting out at the beginning of the month our spending…andaccounting for each dollar.
...but everything else I loved!
NOW I Do think these ideas are great. And if you can, then do them!
BUT...
For me, it was too much stress, with kids in the shopping cart, trying to get the exact amount of cash from one envelope for the food items, thengetting some out of the next envelope for household items, and some fromanother for baby items, …etc. It was overwhelming and I rarely had theexact cash in each envelope and it was more work trying to count and keeptrack, that in the end…I PULLED OUT THE DEBIT CARD.
(I KNOW, exactly what you aren’t supposed todo.)
So here is how I “altered” it to fit my needs.
"MY" ENVELOPE SYSTEM:
(To see the breakdown of my expenses, look at my Monthly Budget found: here).
ENVELOPE1: ($200)
Groceries
Household Items
(Including: Hygiene, baby needs, etc)
ENVELOPE2: ($100)
Food Storage
(Long Term Items, Basic Staples & Bulk Paper Products)
ENVELOPE3:
Entertainment
This includes Eating Out, Dates, Babysitting, and Entertainment
ENVELOPE 4:
Miscellaneous- Anything Else
Husband- Anything he chooses to spend
Wife- Anything I choose to spend
Kids- Clothes, Rewards, School Needs, etc.
My envelopes DON’T include cash.
Instead my envelopes include a list of what I spend &
inside the envelopes I keep receipts.
How I use the Envelopes:
On the front of eachenvelope, is a list:
1. The Budget Amount and 2. A Running Total.
STEP 1: When I get home from the store I write the amount spent on the list, then put thereceipt into the envelope. If the receipt happens to have items in multiple categories, then I put the receipt in whichever envelope that is has more items of that category. (For example, let's say I buy a toy at Walmart, this would go under "Kids", but I just write down the Toy and its Price on the Envelope 4, but the receipt is kept in Envelope 1.)
STEP 2: Throughout the month I keep a list of what is spent, thishelps me see how much I have left and to ration our spending. (When the designated money from an area is spent...it's gone. IF I really need something, I can spend from myMISCELLANEOUSbudget.)
STEP 3: Then at the end of the month I total everything up. Take theenvelope with its receipts and file it away, in our receipts box. Everything iskept easily organized and takes very little time on my part. (Which means Iactually do it, so it works)
I can easily track my spending, see how the budget is going and where our trouble spots are.
NOW HERE IS THE NEXT BIG QUESTION:
What do you do with left over money in each area? (…if there is any)
Well there are 2 Choices:
1.Put it into savings and pat your self on theback
2.Have it Roll over to the next month in the samecategory.
There are Pro’s & Con’s to both.
So what I first suggest is pay attention. Is there an area month after month withmoney left over?
Well, then you don’tneed to budget so much for that category.
But, there are some areas, like Food Storage that I like mymoney to roll over. Some months thereare better deals than others and I fluctuate how much I spend.
Also, in some of the more “fun” areas you don’t want to feellike, I have to spend this or I loose it.In fact, it is a great motivation to teach you to save. Like entertainment, you can go cheap onemonth so that you can splurge on an overnight getaway the next month. Or in my personal budget, I might save up so I can buy a more expensive item.
BUT, if your budget needs to be tighter and it's hard to make ends meet, then don’t roll it over and instead put it towards the basic needs.
PRINTABLE BUDGETING ENVELOPES found: HERE
Keep Checking back for more Budgeting 101 posts with more tips and ideas to save money!
Click: HERE for the rest of the Budgeting 101 Series. (It will be continually updated)
And for more on Dave Ramsey Check out Housewife2Hostess, she will walk you through it.
