You’ll see me at the supermarket- I’m that tired mom with a toddler on her back, baby in the cart, and my hideous nerdie envelope system in hand. Yes, I spell it nerdie because I like it that way. I’m probably pleading with my oldest to hang on for 2 more minutes while I check the sale on French vanilla yogurt. I don’t look like I have it all together, nor do I try to appear that way. But what I do always have is cash.
I’ve gotten a lot of questions about my gaudy envelope system in the past two years that I’ve used it. It’s made of a Christmas Red material and has snaps to open and shut for fast cash flashes. Most people think its some sort of couponing organizer (which, by the way, I hardly ever use coupons for groceries). One time a lady commented, “Your Christmas-y purse is so cute.” I usually just reply, “thanks” and move on, but on the rare occasion that no one is throwing a tantrum, I’ll try to explain what it is. Well, since both of my children are napping and we are currently sans tantrums, I will try to reveal the method to my gaudy madness.
As I mentioned in my previous post, every payday we split our paycheck into categories. After the utility bills, mortgage, car insurance, student loans, and car payment are deducted automatically from our account, we are left with all of these various categories to which we now assign envelopes to. Before using this method, if we needed a car inspection or haircut, we would swipe our debit (or credit) cards and hope that the excess in our account covered it. This is a very bad idea not only because you might not be covered, but also because that excess seems to disappear without really knowing what it was spent on. Now that we have our trusty envelopes we can see exactly what we have spent and how much is left to spend. When you account for every dollar you make you OWN your money. You tell it what to do. Not the other way around. We all work really hard for our money. Shouldn’t we own it?
Every payday (which happens twice a month) I pack my children up and take them to the bank. It’s time for our payday party! My oldest loves going to the bank. She thinks it’s where lollipops are made, as the tellers are always so willing to hand out a few of her favorite treats. I withdrawal the exact amount of 1’s, 5’s, 10’s, 20’s, 50’s, and 100’s needed to fill our envelopes. I then insert money into the envelopes and that’s it! No really, it’s that simple and actually a concept that’s as old as the hills. Just ask your grandmother how she budgeted. Payday now has a more exciting feel for us. It’s like a reward for all of the hard work in the previous weeks. It feels way different than having a check debited into your account and forgetting about it. It’s so much more fulfilling to actually see the cash that you make and trust me, handing over those pretty, crisp uncle Benjamin’s at the grocery store- now that really hurts!! (To be read in a British ‘Charlie bit me’ voice.) Only after all of our envelopes are filled, can we know how much is leftover to throw at our debt snowball that month. And that is really where the magic begins (debt snowball post to come.)
Okay so now I’m going to put it all out there and reveal how much we put into each envelope per payday. No laughing! We are broke and we’re living like this now so we can live like no one else later (OH, yes I did, Dave Ramsey-ites! You knew I would be pulling that one out before too long)
I carry around 4 envelopes in my cloth envelope system. These go with me everywhere. “WHAT!?? Aren’t you afraid you’ll be robbed or you’ll lose them?” The only thing robbing me was my debit card and I have never misplaced a single dollar. So…da da da da! Here is that stylish system that would compliment any number of Santa’s outfits:
And the envelopes contain:
Eating Out: $60
“Blow?? What the?” Yes ‘blow’ is the term Dave Ramsey came up with for “fun money.” In hindsight
I should have just named it “fun money.” You get some interesting looks on the bus when your blow envelope falls on someone’s shoe.
I like the cloth envelopes because they are durable, but any envelopes will do. You have to find a system that works for you. There are some really cute ones on etsy, where I purchased mine. Being the nerdie frugie that I am, I of course bought the cheapest one available.
For the remaining categories we use paper envelopes and we keep them in a fireproof safe in an undisclosed location in our house:) Uh uh, noo way, you CANNOT rob from the clothing fund to get Chinese takeout! Believe me, we’ve done it! Because the next time you need new underwear a little takeout container will not do!
Here are the remaining envelopes:
Car Inspection/Registration: $20
Car Maintenance: $10
Dry cleaning $5
Staining deck/Sealing Driveway: $10
Turnpike Tolls: $5
Home/Lawn Care: $15
Neighborhood Dues: $2
If you continue to do this, I guarantee your worries about money will start to disappear. It has worked well for us for 2 years and we are beginning to make headway with our debt. I would have never envisioned this could be a possibility.