Monday, September 19, 2011

Cash Envelope System

Long ago, in the days before the Internet, I heard about a system of tracking your expenses by using cash from envelopes. As I recall, it was called the "Cash Envelope System" ... great name, huh? I bought into the system, used it faithfully for a long time and it was quite successful for us during that time. I'm not sure why, but somewhere along the way, I went back to debit, and checks and cash without the accountability of the envelopes.

Then a few years ago, it came across my radar again, from people talking about Dave Ramsey. I thought several times, "I really should go back to the "cash envelope system" but never followed through.

Well, this month I did go back. For our two week pay period I dug out my envelopes and put my assorted, specified cash in each and we are using the system again. And can I say it is a relief!

I love being able to look in each or any of the envelopes and know exactly how much I have left to spend in that category. I love being able to look at the outside of the envelope (where I record what we've spent) and seeing where our money has gone. I love feeling like we are more in control of our finances. And I love feeling like we are being proactive in what we are spending money on.

Before we would say: Want to go out for dinner? Sure! We have money in the checkbook. Want to buy clothes? Sure! We have money in the checkbook. Now we say: Want to stop at McD's? Let's look at how much is in the envelope. We have "X" amount that has to last us til next payday, is it worth it to ya? And we can make a more seasoned decision on that info.

It may not be for everyone, but for me, my life just works better this way. And you know another upside? We've started a travel savings fund! Since we're not spending down to zero every paycheck, we can start saving for those longterm things we really want in our life.

So how bout you? Do you use the Cash Envelope System or something else? Have you had success with using cash, debit or ????

Til next time ....


Alanna said...

Good plan. We took Dave's class, but I never did get to doing the envelope thing. To tell you the truth, parts of it just didn't make sense. I think you explained it much better. I may pull them out and try it because this sounds like a really good idea to do just what you're talking about... being a good steward and accountable for your finances. Thanks, Gail! Blessings!

Trish said...

I have tried this in the past but never fully committed to it. I am getting my finances in order now and am planning to start doing this for myself. Glad to hear it is working so well for you!

Trish said...

My comment seems to have disappeared but great post - I am glad this is working for you!

gail said...

hey trish,
both your comments made it thru! yahoo!! i hate it when i lose comments.

gail said...

way to go alanna and trish for giving this a go. i'd love to hear how it goes for ya =)