In today’s card-swiping culture it’s easy to lose track of where your hard-earned money is going! Believe me, I know! Budgeting and keeping track of money are NOT my strong suits! (I did recently start a deals page to help!)
You have probably heard of the envelope budgeting system. It was made famous most recently by money guru Dave Ramsey as part of his Total Money Makeover plan. But the concept has been around a long time! During the Great Depression, when people didn’t have much trust in banks, people would set aside money for specific purposes in envelopes as a way to keep track of what little money they had. With this simple budgeting system, people always knew exactly how much money they had spent and how much money they had left.
What a concept!! And guess what? It works just as well today! If you would like to take control of our money, instead of the other way around, you might want to give this a try.
Since Christmas is coming up (way too fast!) I thought I might try and do a version of this envelope budgeting to keep me on track with my Christmas spending. Hopefully from there I will move on to more envelopes and more control. But for now I figure it’s at least a start!
I started with the most IMPORTANT part…a cute envelope to put my money in! lol. I’m kidding. It’s not THE most important part…but it’s always nice to have something aesthetically pleasing to look at when implementing an odious task. ;-)
I decided to draw up a simple cash envelope template based on those cool cash envelopes you get from the bank. Then I added some lines to record expenditures on. All you have to do to make your own envelopes is:
- download the template here
- print out on whatever kind of paper you like
- cut out envelope along solid lines
- fold on the dotted lines
- add a couple of pieces of tape to secure
Of course you could just use some regular envelopes you already have lying around the house, but what I like most about these is they fit nicely inside your standard wallet.
Now you are ready to set up your own cash envelope system! Here are a few simple basics for starting (adapted from Dave Ramsey):
Set up a BUDGET
I know…it’s a “dirty word” to me too! ugh. I really despise that word. BUT, I know from experience, life is MUCH easier when you have one and it’s essential if you’re going to successfully implement the envelope system. I found a VERY SIMPLE method for determining your Income and Expenses at Budget101.com.
Create Your Categories/Envelopes
Start with the basics like food, gas, clothing and entertainment.
Fund Your Envelopes
After you’ve categorized your cash expenses, fill each envelope with the money allotted for it in your budget. For example, if you allow $100 for clothing, put $100 in cash in your clothing envelope for the month.
Go Forth And Spend (Within Your Budget)
Once you’ve spent all the money in a given envelope, you’re done spending for that category. No visits to the ATM to withdraw more money!
Cash Is King
For some reason spending CASH is more “painful” than swiping your debit or credit card. Using cash whenever possible is a good habit to get into to help avoid over-spending and impulse spending.
Don’t Expect Perfection Overnight
It will take a few months to perfect your system. Don’t give up! You’ll eventually get the hang of it and it will be SO worth it!
A few extra tips:
- Plan your budget and fund your envelopes based on your pay periods.
- Spend each month’s income and each individual paycheck on paper before it comes in.
- Have some fun! All budgeting and no “fun money” makes Jillee a dull girl! :-)
- Start now!
Do you have a budgeting system set up in your household?