An Update On My Envelope System

I wrote a post about the budgeting envelope system a few months back, and my wife and I have started to implement it now that we have the time, and our income has gone down severely since she started school full-time.  We have started out very well with it so far.  We went to the grocery store the other night, and there was $120 in the envelope to cover food for the next 10 -14 days.  Our total bill was $120.13!  I know it sounds extremely nerdy, but it was exciting to know that we put aside a certain amount of money for groceries and spent exactly what we needed to spend. 

The envelope system is extremely simple, but so is budgeting money.  It is all about making your money behave how you want it to behave.  We had a problem with using the debit card like water.  We never saw the money leave our hands, because it is so easy to swipe the debit card, thus the problem with credit cards as well.  A study was done that found that people spend about 10 – 15% more when using plastic.  Don’t get me wrong, I am all about the debit card when purchasing things online or making larger purchases in a store.  However, you need to watch out with spending when using any form of plastic.  The whole idea of the envelope system is that it systemizes what you can spend on certain categories.  My wife and I know that when the entertainment envelope is empty, then we know that we either need to wait until the next paycheck to go out or get creative with what we do for our entertainment. 

If you struggle saving money or figuring out where your money is going each month, I suggest you read my preliminary post on the envelope system and try it out yourself.  I think you’ll be surprised at the results, and you will love the feeling of power that you have over your money. 

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