Does anyone here use it?  I only use it for emergency fund (so DH can't touch it).  Does anyone here use an envelope for clothing expenses, school, medical, dental expenses also?  I was reading Dave Ramsey and it sounds like these items use an envelope.  Does anyone here like/dislike this system?  I wouldn't use it for anything I already pay online on through bill pay (it's free anyway).

Carmina 

 

Hi Carmina,

I have heard people say they've had really good luck with the envelope system and Dave Ramsey backs it 100%. I tried it in the past for groceries/gas/entertainment/clothing, etc.  Non-fixed expenses so to speak.  I didn't have the willpower not to "borrow" when I was short or over spent in one category.  For me it works better to track it on a spreadsheet where I'm not looking at actual money.  I know that sounds strange but it only takes me a couple minutes in the evening to update my spreadsheet and make a note on a small notepad in my purse how much I have left in each category. 

 Good luck.

DH has an elaborate system set up involving a binder divided into several sections for everything, but he can tell at a glance where we stand. He uses this system for his "morning mental gymnastics" and I understand the system if he's not around and I need to know something. The only thing I use the envelope system for is my saving system. All $5.00 bills I get go into this envelope and it does not get touched. My goal was to save $5 per week but as it turns out I have managed to save over $500 so far. Its just a little game to encourage me not to spend everything and so far its worked well.

 

I've used a modified version for those budget catagories which were hard for us to control: gas, groceries, entertainment, personal, clothing. We do a lot of online billpay or auto deduction from our checking so it didn't make sense to use envelopes for electricity, cable, mortgage, phone, garbage, sewer/water. I tried the full envelope system and wasted gas driving to pay bills in cash all over our bigger city and then trying to make sure I got a receipt from the cable company (whose office was 6 miles from my house, yikes), etc.

However, using envelopest for the out-of-control catagories really helped me and DH get our spending under control and plan our activities accordingly. When the last $20 was in the gas envelope, we had to really decide about driving anything more but the absolute minimum (to work and home). Same with entertainment--when our money was out, we had to eat at home, do free activities, etc. Groceries: I budgeted $300 a month and we had to feed our family of 4 on that.

I think it is a good system but can be modified to fit a person/family's lifestyle.

I use Microsoft Money for my checking account register. On payday, I make transactions for each of our bills, even if we haven't yet received them. Then, as I do make purchases in each of the categories, I subtract the amounts from my budgeted amounts and keep track of what I have left.

For instance, I budget $400/month for groceries. So on payday, I make a checkbook entry in Microsoft Money that says "groceries" for $400. When I go to Albertsons and spend, say, $80, I'll input that grocery trip into the checking register, then subtract that same $80 amount from the $400 transaction, which leaves me $320 in that "groceries" entry for future spending.

It seems to work for me.

We've used it for about 3 years and it works well. however, there are some months where budgeting from the bank acct with a debit card just works better. For instance, because we were on vacation, dh's check this week is really small. So we can't fill much of the envelopes to start the month's envelopes with. So I'll just take a gas and grocery allowance with the debit card, since that's all I'll need for now.

Either way, I can budget Ok.

slk,

I budget for my mortgage, insurances and automatic payments on Quicken using a similar method as you. It gives me a buffer in my bank acct as well as knowing I'll have enough money to pay those expenses when they come up during the month.

Cinnamon,

That buffer is a comfort, for sure. The only thing DH doesn't understand is that when I say we only have $10 in the bank we can spend, and he sees the bank's balance showing we have something like $1000, I have to explain to him that the mortgage, groceries, insurance, etc. have to come out of that $1000, so we're really flat broke. LOL

wow really?  I guess that is why I can't share accounts.  I like to know I am the only one spending the money in there!   dh is responsible for some bills and me others.   but dh knows that the balance includes bills in his account.  now if he would look at the mail!

Wow that's amazing from just 5 dollars a week, I know our change jar adds up last time I cashed it in I has over 300 dollars.