Envelope System of Budgeting (a peek inside our budget)
August 15, 2012 · By ·
A Colorado Family's adventures in life, love and decorating.
A Colorado Family's adventures in life, love and decorating.
Good for you! I couldn’t imagine that system working for us. I shop all over with coupons for food and such, mixing stores and categories all the time. I much prefer our debit cards that we hardly ever pull out since we both know we are broke.
We just started following a cash budget a few months ago and while it gives me enormous peace of mind that we always know where the money goes, it’s so hard to stop the impulse buying. ESPECIALLY at Target. Our issue is figuring out how much to allocate to each category- we want to be frugal, but we also have enough income right now that we shouldn’t have to stress over every.single.penny, and that’s a difficult balance. Thanks for the update- I refer back to your budgeting posts all the time for tips and inspiration!
Hi Emily! I was actually stalking your blog looking yesterday reading all of your budgeting posts. I would love to hear how your budget has changed over the years based on your income. I mean im sure you and B are not making the same salary you were 4 years ago. Reading back on your post it seems like you were struggling a little more with the two incomes, now you are able to save all of your income and some of B’s. Is that due to a raise within the years or because budgeting has become easier?
I would also love to know of any bloggers who follow the cash only system. I would love to read there blogs. I know Leah does but im not sure of anyone else.
Thanks!!
Maggie – great questions! My husband and I live on a strict budget, spend cash-only, and are working hard to be debt free in the next few months. We write about our experiences at http://www.cookinwiththejohnstons.com. I hope you’ll check it out!
Thanks Maggie! Maybe I’ll do a little roundup party of budgeting bloggers…I’ll see what I can put together. The short answer to your other question is that yes, Mr. B’s changed positions and had a few raises since we started this all 4 years ago, to the point where he now makes by himself what we were both making when we got married, which allowed me to take about a salary cut to work from home part-time and raise Thomas and Nell. The cost of living has been going up (especially with 2 kids, but just generally, too), so we’ve cut the budget in places, too to make sure that we live on only B’s income so that mine can go straight to savings. Eventually, the goal is to be able to save what we’re comfortable with (the amount of my salary) each month on Mr. B’s, but we’re just taking it day by day. I”ll post more about all of this though, good question!
I still credit you and your blog to opening my eyes to the envelope/cash system. We have been living on our budget for 3ish years now, and in that time we paid off all of our debt except for the house, we have 6 months emergency savings in place, and we are now paying cash for my husband to go back to school to get his masters. 3 years ago this was all just a dream! My #1 way to save money is to stay out of stores; I hardly even go to the grocery store during the summer because I shop Farmer’s Markets, so by staying out of stores I am not tempted to impulse spend. (Like when I DO need to go to the grocery store for toilet paper and milk and come out with a bag of Dove chocolate!)
We do just about the same thing. I find that when I use my debit card vs. cash, I will add a diet coke at the register a lot faster than I would otherwise! I only bring cash and only spend what we have. If I get caught without cash and use my card, I immediately take the cash out of the envelope and deposit it to the back account to even out again. But doing that stresses me out – sometimes I forget, spend more, etc. Great post! Glad there are others out there like us!
We follow basically the same system, but have found that for us, we have an easier time using the debit card, but then meticulously saving receipts and entering every cent into the categories on a spreadsheet tracker (which we try to do every other night or so). For us, it’s easier for dividing trips that have purchases from multiple categories, AND since we don’t live “in-town”, it eliminates trips back in (and wasted gas) if we are out without our cash/envelopes and need to pick something up.
Generally, because we’re entering things into the spreadsheet so often, we always know what our available balance is in each category, and have been pretty good about not going over. And at least now, if we DO go over our planned expenses in one category, it’s usually because of something unavoidable–i.e. we recently went over our eating out budget because Justin got stuck on a job-site 8 hours longer than expected. It was two hours away, so I wasn’t able to bring him dinner, and considering he wouldn’t be home until midnight, we both thought it was a necessary unplanned expense for him to buy dinner, even though it would put us over budget in that category…which just meant we had to shift money around from elsewhere.
Our budget is far from perfect, but at least now we know where every cent goes!
I am still in awe of you and your commitment. We’ve been slowly easing our way to a cash budget and actually this month was our do or die month. I hate it. I know that I HAVE to do it, I have no other choice, but man, I hate not just spending freely as I’ve always done. I keep telling John that one day, maybe I too, can love budgeting like Emily does. I’m sure he looks forward to that day.
Can you talk to me about what T eats? Do you have to buy anything special for him that ups your grocery total? I feel like I’m constantly buying yogurt, string cheese, fruit leather, goldfish, etc for Gabe and that crap adds up!
Big fan of cash envelopes… For us it is truly the only way to stick to our budget. When we use the debit cards instead, we spend more – 100% of the time. I do keep ours all in my wallet though (I use Dave Ramsey’s envelopes) so I am intrigued by your commitment to leave them at home. Definitely curbs the impulse buys! We’ve been off the cash system since having our first baby in January and whoah has our spending gotten loosie goosie! So need to get back in the habit!
I love your budgeting posts. And I wondered how you key track of all the categories. That was always one thing I thought would be hard. We have definitely spent more on Henry than we expected, but I hope we are getting back on track.
I know this may seem silly, but on pay day, do you go to the bank and withdraw all of the cash? We are trying to create a budget and I am interested in doing the envelope system once we get all caught up.
I love your budgeting posts. I love that organizing folder thing! We haven’t been good about the envelope system. It’s still a work in progress!