Cash envelope system

[Deleted]

I mentioned that im doing a budget challenge on FB put together by a friend.

We're following the Dave Ramsey methods.

I'm switching to cash envelope system (which I've been reluctant for years to try) and wanted to know if anyone had any tips.

*Is envelopes better than an accordion thing?

*Pay big ticket items and then take the rest in cash.

*Obviously, don't carry the cash on you. :-)

Any other tips or tricks from those who have done or do the cash envelope system

[pamela]

I still paid gas for the car on my debit because it was not worth the hassle and I would not overspend on gas.

For logistics, I liked the system where the envelopes are attached to each other because it's harder to drop one and not notice. Annoying for sharing with DH, but that shouldn't be an issue for you. I did carry them all in my purse all the time, but I wasn't walking around a big city and likely to get mugged.

For some categoies I did allow any leftover funds to roll over from one month to the next if expenses fluctuated. Others, I'd pull back the extra at the end of the month and that would go on the debt.

You have to keep up the detailed budget to go along with it so you know how much to pull out for each envelope, especially if you have to break it up and do multiple withdrawals during the month due to when you get paid. Limit ATM trips though to limit fees and make yourself plan ahead.

[Deleted]

Oh I should mention that this is based on my unemployment and that covers the basics. Car, rent, food, gas. No other categories.... Just survival mode.

There's a no fee atm down the street from me. So that's a plus.

[sunnysideup488]

Someone I know recommended using monopoly money instead. Still use your debit card for the purchases, but act like you are spending the fake money. Once it's gone, it's gone.

I thought that was a good idea. I don't like having too much cash. It gives me anxiety that even my zoloft won't touch.

[Deleted]

Monopoly money is a good idea.
I already know that I spend cash like crazy. So that's an option.

I think seeing the cash in hand and the zero balance in my account is what will make everything stick. Otherwise, I think I'll end up right back here.

[bostonmichelle]

DH and I did this for about a year to really reign in our spending. We withdrew money each week when I got paid for groceries, fun money, and dining out. We paid our utilities, mortgage, loans, etc thru autopay and used DH's cc for gas because he got 3% off.

It really worked and really kept us in check doing it every week. If we wanted a nice meal out we had to plan and not spend the first week's money to "save" it for a nicer meal the second week.

I kept the grocery money in the back pocket of my wallet, my fun money in the main part, and left the dining out money at home. We'd take the dining out money out when we went out for dinner or breakfast. If I wanted coffee or something it came out of my fun money.

[Deleted]

I used to do this and it was really helpful. Now my life is so crazy that I can't keep on top of it like I used to.
~I used the accordion thing. It was sturdier than the envelopes and help up better.
~I only had categories for groceries, eating out, household (cleaning, toiletries, etc.), and fun money.
~I would take cash if I knew I was going somewhere that fit in these categories and then I always kept $40 or so in my wallet that was my fun money. This would allow me to buy things I needed or wanted while I was out instead of putting it on the card and forgetting about it because I didn't have cash on hand. If I used the $40 to buy something like milk or eggs I would reimburse myself out of the groceries category when I got home.
~If I finished a pay period and had money left over I would take it out of the accordion holder and place it in a special place. It became a savings account of sorts. After about a year and a half I had $1100 in my "left over" envelope and we used it to pay part of our kitchen remodel. It was sort of like found money.

[glynn]

I do this with our fun money. We get a set amount each of my paychecks. When it is gone no more fun. I also conserve when I know something is coming up that I will need money. I pay all the set bills online and that comes out first. I have a set amount for food that I put on CC then pay, if I go over I have to pull from somewhere else.

I have DD1 doing this in her 3rd year of school. She worked lots this summer and took enough cash in envelopes to get her through until fall break. She decided on $65.50 a week for food so we will see how that goes. She had a small job for gas money but that feel through so I may be funding that we will see.

[Deleted]

Thanks for the tips!! Just got word my food stamps are approved so that's one less categorize. That amount can now go towards savings. Every little bit helps.