We are on the "Envelope System"
Now, I first heard of this system YEARS ago when I heard a relative of mine put all of their spending money in separate envelopes.....and I'm pretty sure it was explained to me ( with rolled eyes and snarky tone) by another relative who thought this was really stupid.
I think.....that's probably how it went down.
Who uses CASH these days? Seriously? Almost as annoying as the lady busting out her checkbook in the grocery line. It's cumbersome....it takes up valuable wallet room...it's DIRTY. I mean, no joke...money is DIRTY. Do you know how many people have touched it?
I'm going to be upfront with you....there IS a slightly larger "pain in the ass" factor to cash use. First, when we do our budget we have to actually GO TO THE BANK and get our cash for the pay-period out.
I know. Like....how many of you don't even know where your bank IS?
I actually go inside. INSIDE THE BANK....like a little old lady. Typically I'm toting along my change jar.
I am not kidding you.
We bring the cash home and put aside a particular amount of money for each cash item:
Car/Gas (gas and oil changes/maintenance)
Household (this is stuff like salt for the water softener and small repairs)
Pet (Mickey requires fancy fluffy hair-do's about once every 6 weeks)
Fun (this is our "free spend" money)
I have a legit cheap white envelope where I write each item on the front and the cash goes in there. Once the cash is gone for that category, you are done spending. So, spend wisely.
Do we cheat and take $$ from one envelope to feed another? SOMETIMES....yes. Food is our big one. We suck sometimes at managing food....and cutting out our desire for a pizza here and there has been rough. Sometimes you just don't want to fight the kids and make them eat another home-cooked meal. Sometimes, pizza is Switzerland. Everyone is happy.
But, we know in the back of our minds that getting that $10 pizza is going to put a dent in our budget....so this is not something that happens very often. And we try REALLY HARD to take that sort of thing out of "fun" money.
What benefit comes from the Envelope System?
Well, for one, it makes you beholden to the Zero Based Budget. Your budget, as I said in blogs past, is a covenant. There is no spending beyond it. So, using the cash envelopes makes it REAL. You feel the cash in your hands, you see EXACTLY what you have left and what you have to work with.
There's absolutely no logging into your bank account and yelling "WTF!! There's only $2.00 left. WHAT DID YOU BUY!?!?!"
This happened to us once at a liquor store (man, that sounds so beyond ghetto). We fancied ourselves baby wine lovers back when we were unmarried and living in sin in a loft apartment in Waukesha. We were within walking distance to a really nice store that had a huge wine inventory. One night we walked over to get ourselves a $7 bottle of cheapie red. I remember this like it was YESTERDAY. We went to pay and our card was declined for insufficient funds.
WE DIDN'T HAVE SEVEN DOLLARS...and we were so clueless that the little money we DID have left in our bank account we were trying to buy booze with.
Those days are over. We have our fun money. We have our hair money. The dog has his money for his fancy haircuts. If Mr. Pudgy Gazelle wants to take his fun money and buy a $40 Pink Floyd album....that's HIS fun money. I have no say.
I buy notebooks and office supplies with mine, so I really have no room to talk.
Once you get used to the routine of the Almighty Envelope, it's really not that bad. We stuck to the envelope system our first time around with the plan and it worked flawlessly. It's working now and all we have to do, as always, is keep going!