After much nauseating review of my spending habits over the last few months, I've decided to start the "envelope" system today.* (Recommended by Steve-smart man.) Cash budget-here I come. I'm all set to go to the bank at noon and take out a giant wad of cash to divide into my little envelopes I've already pre-marked with their designated amounts.
Now, I am not as extreme as some. I'm still going to have money set aside for grooming my dog every month, getting pedicures, gifts, clothing etc. I'm just going to have a limit, so it's not out of control. Once I get a bit more control, I'll look into areas where I can skim some off and perhaps spend a bit less.
Since I'm just starting on a cash budget, I'm a little worried to totally spend my entire paycheck into each "envelope" or account. But, in the future I'd love to do that so that my money is going into specific places-i.e. vacation fund, car savings, new leather briefcase...oh wait.
Anyway, yeah. I will still pay for gas with my debit card. BUT, I have an envelope with the amount I can spend and I will be printing off the receipts and subtracting so I know how much more I have. I just can't give up the convenience of paying at the gas pump! I will also be paying bills online, not with cash. But, I already subtract that off of my monthly budget, so it's like I don't even see that money.
We shall see. I'm committing to doing this for 90 days. I will be refilling the envelopes twice a month (I get paid twice a month, not once). I figured if I put it out here on the world wide web, I'd at least have a bit more accountability.
Have you tried this? Any tips?
*Nauseating in the fact that Quicken, even after I went through and re-categorized items, categorized the majority of my money spent on miscellaneous expenses (i.e. pedicures!), dining out, and student loans. Yikes.
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Good for you. I have done the envelope thing before. I will tell you, though, that I got tired of carrying envelopes. And I even went to the trouble of purchasing the wallet with envelopes in it from Dave Ramsey's website (this is a waste of money, FYI). If you grow tired of the cash, you can always use mint.com, my new best friend. Set a budget for yourself and it links to your bank account to track it all online and categorizes each purchase. It sends emails when I have low balances on any account or when i have overspent in any category. Granted, it doesn't force me to STOP spending in a particular category like the absence of cash would. It's just a thought in case you don't happen to love carrying cash! Good luck with the new system!
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