The Envelope Budget


I was really frustrated at my July Spending Fast savings...  After the first pay period, I was able to contribute $500 towards my goal of a down payment on a house.  That amount is about how much I had anticipated saving every pay period.  However, the second pay period of July didn't go as well.  I was only able to contribute $75!  Where did the rest of my money go?

I went over budget in almost every category, because my debit was just easy to get to!  I lent people money, and I am still just in the habit of swiping away, without considering what it's costing me in the long run.  After watching one of my new favorite TV shows, Til Debt Do Us Part, I was inspired by the allowance jars.  Essentially, each couple gets put on a cash budget,  the cash is separated into different categories of jars (mortgage, groceries, etc.) that has to last for the month.  Once the cash is gone, there is no more.

I've thought about using this method before, but honestly I prefer my debit-card.  The debit card is much more convenient when it comes to tracking expenses.  Unlike my brain, the bank doesn't forget about or miss any debit transactions, so everything is recorded on my monthly statement.  However, I am still having issues with my "trigger finger" when it comes to using the card without thinking.  So I'm deciding to try using cash envelopes this month. 

I figured envelopes are much more convenient to carry around than mason jars... Once I have paid all of my bills online, I will go to the ATM and take out only enough money for the rest of my month's "necessities."  The cash will then be separated into each labeled envelope (with the monthly budget clearly stated), and once its gone, its gone.

Not spending money is difficult.  Very difficult.  Especially when I'm so used to spending it.  I know that when budgeting, they say its always best to go on a cash budget.  This way, I will feel the money leaving my hands, and I will be able to open any given envelope and see how I'm doing.


nikki said... [Reply to comment]

I saw the envelope budget on living essentials show on byutv years ago. But have never done it, even though we talk about it all the time. Depending on how this month goes we will see about the envelope diet next month.

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