Comments on: Envelope Budget System & Excel

By: tk

tk — Wed, 21 Sep 2011 19:10:39 +0000

Lisa,
Just do it. I have used a version of this system for years and have set a couple of other friends on it recently. One literally had no extra money and bills adding up to more than she brought in. IT WAS TOUGH. Only take out cash from the bank that leaves the $100 minimum. For the first few months we had to limit the food category severely and things like entertainment, haircuts, etc. Some of those categories only got like $1.00 – $5.00 a month. But after a bit, we were able to catch up enough so that she was like 2 weeks ahead of her paycheck, so we didn’t have to go to the bank so often (so as not to take out more than the minimum). I am happy to say that she has paid off all credit cards and store bills and now has more to work with. We put some of the extra from those into savings (for emergencies) and to savings (for stuff she wants) and we’re able to fully fund those other categories that were so restricted in the beginning. In fact, she just paid cash for a used car and she was thrilled! You just have to make up your mind. In my friends’ case, she wanted to do it and tried herself but just didn’t have the discipline in the beginning so I was very involved (I kept her credit and debit cards for her and put the cash in the envelopes) until she started seeing results. Now she is able to do it herself. If you don’t have the discipline at first, ask a trusted friend to help you! The second person I am helping is a friend of the first one. When she heard about her success, she wanted to try it too. Blessings.

By: Lisa

Lisa — Mon, 25 Jul 2011 20:45:11 +0000

Hi!

I realize this thread is a few years old, but I came across this page while searching “envelope systems”, and find your way fascinating.

Since I’ve never done this before, I’m perplexed with one thing. I get paid twice a month. Unfortunately, almost all of my check is currently going towards bills, food, etc., hence the reason I am so interested in this system – to help me pay down my debt and follow a budget.

With my paycheck direct deposited, and, as of right now, barely any breathing room with excess money between checks, how does one avoid going below the bank’s required minimum balance in your checking/savings account without getting penalized? My bank minimum is really low ($100), but I have been surcharged $15 in the past for going below that amount.

I would never be able to pull out the majority of my money as cash to put in envelopes without a bank surcharge.

Any explanation or help with this would be greatly appreciated!

By: steve in w ma

steve in w ma — Sun, 13 Sep 2009 01:21:42 +0000

You’re welcome!

I find that using actual cash envelopes for my most “splurgeworthy” categories has been very helpful in reining in spending. For me I only use cash envelopes for Food, for Entertainment, and for Gas.

This pretty much covers day to day and week to week spending, as almost every other type of expense either is infrequent or is paid by check or electronic check.

One benefit that I have noticed of using cash in the envelopes to spend is that, because something like 95 percent of my transactions end up being from those envelopes, I have begun to associate spending with getting out the envelopes and the cash in them. The reason this is helpful is that as a result (and unexpectedly) I have almost *stopped thinking about my credit or debit card* as a method of purchase. If there isn’t cash in an envelope for the purchase, or it is a purchase that is not from these 3 cash envelope categories, it now causes me to step back and think and refer to my budget.

Using the cash envelopes has detrained me quite a bit from even thinking about reaching for my credit card (or debit card). This has been extremely good for me!

By: Jesse

Jesse — Mon, 24 Aug 2009 18:16:28 +0000

Hey Steve, that’s a good point about not being too strict, and just having it work for you a high percentage of the time. Thanks for pointing that out.

By: steve in w ma

steve in w ma — Sun, 23 Aug 2009 08:02:54 +0000

The amount of money that would ever be stolen or lost using a cash envelope system is miniscule compared to the overspending when you’re not using it. Even if I lost a whole month’s cash that’s *nothing* compared to what I can llose by frivolous spending in a couple of months when I’m not paying attention to my budget.

If I forget my envelopes and have to go shopping, I just use my credit card. It only happens about once every 3 months, not a big deal. Then when I go home I take an equivalent amount of cash out of my envelopes and put it into an envelope that is designated for paying off the monthly balance on that card, which I also use for gas and online purchases. No need to be unrealistically strict about the envelope system. As long as you use the envelopes about 95% of the time, you’re good.

By: Melissa

Melissa — Wed, 04 Feb 2009 05:24:54 +0000

Tish:
Not sure if you’ll still be looking at this site, but since you carry all your envelopes in your purse, try putting your money in a coupon holder instead. We put our money in a tabbed coupon holder and an index card in each slot to keep a running total. I have found this much easier than keeping up with bulky envelopes and think this cheaper system works just as well as Ramsey’s!

By: Tish

Tish — Fri, 26 Dec 2008 21:03:13 +0000

I don’t find it that difficult to go to the bank once a month. I do carry the envelopes in my purse, but so far have never lost my purse. I use the Dave Ramsey financial peace system, but my gripe with that is you have to purchase a whole refill of envelopes. I seem to use up my food envelope really fast, but since the envelopes are in a spiral bound, you can’t just replace one at a time. grrrrrrr. I suppose I could just make my own envelopes but haven’t found any that are quite as narrow as Ramsey’s. And then I’d have to have a way of keeping them all together since mine wouldn’t fit in the holder. I wish someone would make an envelope system with small loose leaf rings!

By: Tracy

Tracy — Mon, 18 Aug 2008 13:32:14 +0000

I totally agree with you about it being a pain to go to the bank and get all the right bills, etc. And besides, you COULD go to the bank, get your cash, accidentally leave the envelope in the van while you shop at WalMart, and come out to a smashed window and “gone” cash. Yup. I always wondered what would happen if your purse were nabbed, someone got in and took the cash, etc. Well, I found out. God took care of our needs, anyway, but it sure was a lesson for country mouse moving to the city. Yes, using debit card would be simplest–BUT handing over cash is “painful” (“Goodbye, Andrew! It was nice!” “General Grant, I love ya, man!”) , and it’s proven that people spend less. I’m still looking for the perfect “way”, but thanks for sharing your way of doing it, and its pros and cons. In the end, I’ll probably combine ways, somehow.