Envelope system`

[sweeps]

Re: Envelope system`

Just a thought but could you use play money as a substitute for cash in the envelopes? That way you could still do the envelope system, but not have to handle all that cash.

[poundwise]

Re: Envelope system`


I keep all of my accounts with a budget sheet and Quicken and do virtually everything online.

I recently helped my parents set up a budget system for themselves. If I had tried to get them to do what I do, they would have been lost and frustrated. They have an envelope system for many things and a notebook with a sort of 'virtual' continuation of that system on paper for the items they handle from their checking account each month. Thus far this has served them very well.

I think an envelope system, to some degree, helps those who are not techincal or detail oriented, and those who are, frankly, spenders. It is a lot harder to spend cash than it is to run a debit card or write a check.

[Ima saver]

Re: Envelope system`

Well I am not at all techincally inclined. When I first started this envelope system, I had no checking account and no credit card at all. I still do not have a debit card, nor have I ever used an ATM. I just keep enough money in my checking account to pay the bills, nothing extra for spending. Our spending money is an allowance we get each week!! I have a misc. envelope if we ever run out of spending money for gas and food.

[kristinecfp]

Re: Envelope system`

I think an envelope system, to some degree, helps those who are not techincal or detail oriented, and those who are, frankly, spenders. It is a lot harder to spend cash than it is to run a debit card or write a check.

Two thoughts:

First, the envelope system can be beneficial to the technically savvy as well as those who are not technical. There's an online envelope system (www.mvelopes.com) for the technically savvy that I've heard great things about (no I'm not connected to this organization in any way), and of course, many people use Excel spreadsheets to run their own envelope system.

Second, it IS harder to spend cash than it is to use a debit/credit card. I sometimes recommend that clients who have a spending problem go back to the traditional envelope system (using cash and paper envelopes) to help them control areas of spending that are a problem.

Great discussion thread - thanks for starting it Diolla!
Kristine

[Fizgig]

Re: Envelope system`

Another option is to use cash/envelopes only for discretionary spending outside the home, rather than everything from your mortgage payment to your toenail polish. I have my "necessary" spending like bills and savings contributions, and that's all paid from home. I'm not going to accidentally overspend on my cable bill - it's discretionary spending that's the potential danger.

Outside spending like clothes, entertainment, etc is budgeted and I withdraw cash once a week for it. I don't care too much if I borrow from one category to splurge on another, because I figure the real goal is to keep total spending below a certain number. In the long run, it doesn't matter if I spend $10 more on clothes and $10 less in a restaurant, as long as it balances out at the end of the month.

[Ima saver]

Re: Envelope system`

Yes, fizgig, I agree. The money I put in my envelopes is always spent on that particular item. For example, my van payment was $420 a month, so I put $105 in the van envelope every week. There was never anything left over, that payment was the same every month. The only envelope that ever has money left over it the envelope for electricity. I budget for my highest bill, which has been $160. If it is less, I move that money into savings.(challenge)
My telephone bill is the same every month because I use a phone card for long distance calls. I do budget $60 a week for charge cards, so there is sometimes money left in that envelope too.
I give my self an allowance and that is for eating out, alcohol, gas, misc. I generally run out of money on Sunday (today) and payday is tomorrow.

[Diolla]

Re: Envelope system`

Unlike Ima I grew up with technology and am very comfortable with it. My envelopes are only for 'face to face' spending, my monthly bills are paid from my checking account online. I guesss I am too lazy to use virtual envelopes and have to keep track of how much is in each one.

If you need a visual but feel uncomfortable having cash I guess the play money would work but you would still need to keep track of it somehow. When I spend the money in my envelopes it is handed to the clerk (imagining the look if I handed him monopoly money ) Change goes into the change jar and bills go back into the envelopes. Unless it is a great deal and I wint to stock up or a "need" I seldom borrow between envelopes.

NOTE: When I used to scan out with my debit card my budget was $75 a week for groceries and I would usually go over. Now my envelope holds $60 a week and I never do.

[Ima saver]

Re: Envelope system`

I don't mind having the cash around. I live in a safe area and if anyone came into my yard, my doberman would eat them!!

[poundwise]

Re: Envelope system`


The worry about having cash in the house is overblown. Most of us have hundreds, if not thousands, of dollars in electronics, jewelry, etc. Also, unless you go around advertising that you keep $X in your desk, no one is going to know.

I have seen a couple of cool stand-alone 'virtual envelope' software programs. I think they were both shareware. They work like Quicken or Money to help you budget and track, but the interface/menu of accounts looks like a desktop with 'envelopes' on it. Might be a good system for some folks; especially someone transitioning from physical envelopes to a computer. Just a thought. If someone's interested you can check this one out: Snowmint Budget or just Google 'budget envelopes shareware' and see what you get.

[Ima saver]

Re: Envelope system`

I will just stick to what I have been doing all these years, it has worked for me!

[poundwise]

Re: Envelope system`

I will just stick to what I have been doing all these years, it has worked for me!

Absolutely! There's more than one way to skin a cat.

[Ima saver]

Re: Envelope system`

Interesting article!!

[boefixepa]

Re: Envelope system`

I use Mvelopes and love it. It has literaly changed my financial life and I will never go without it, or something like it, again. It was not something I had ever done and it was a little scary switching over from quicken. But the difference between and on-line register and an actual budgeting system was a miracle! It makes a HUGE difference. For the first time I understood what a budget was! For the first time I didn't care what my checking account balance was...it was an odd feeling. I had always lived breathed and died by that checking account balance. Now I don't even care! All I have to worry about are the 2-3 envelopes I spend from. All bills are taken care of, all incidental expenses are there. All the stress is gone! ALL HAIL THE ENVELOPE BUDGET SYSTEM!!! I love it! And danged if when that vacation envelope gets to a couple grand (it will take a few years) I AM going on a an Alaskan Cruise!

[jmjj215]

Re: Envelope system`

I AM going on a an Alaskan Cruise!

Now we're talkin'!

[Ima saver]

Re: Envelope system`

I have heard myenvelopes mentioned several times. What is it?