Do you use the cash envelope system? Tell me about it, please!

[sinead]

I'm trying to get a better handle on my end of the budget, and I've tried everything except Dave Ramsey's cash envelope system. That's next...starting on June 1. I've been reading Total Money Makeover and I'm just going to start with my own budget (food, groceries, gas, etc.) to see if I can make it work for that before we start bringing the other stuff over to his system.

Can you guys give me some info about how this works for you? Has it worked for you? I've been spending $500-$1000 over my budget for the last I don't know how long and it just can't go on. I'm hoping to hear some positive stories from people I know rather than the positive bits from the book--I believe them, but I'll believe it more when it's from people I know, you know what I mean?

[jacinda]

Kelleigh uses it doesn't she? I should, but I don't.

[Heather Prins]

i don't know what his system is, but i set up my budget for a two week period, using a coupon saver accordian file. I label each section
groceries week 1
groc week 2
gas
spending
I allot a certain amount for each one and work only from that, not my bank card.
utilities are paid from my computer on the 15th of each month .

[ccouch]

Yeah, Kelleigh uses it. She even made those cute little envelopes for herself, right?

Here ya go: http://kelleighratzlaff.com/life/the-cash-system-more-information-than-you-ever-wanted-to-know/

I'm sure she'll pop in here when she sees this. She's the bestest at sharing tips & encouraging everyone with frugal tips!

[cherylzyx]

I am a big supporter of the envelope system. I've used it for at least 10 years and I can tell you it works! I've even had several people throughout the years comment on how good I am with managing money. It is all due to the system.

I use a computer program rather than actual envelopes though. It is by Snowmint Creative Solutions and is simply called Budget. You can download a free trial at www.snowmintcs.com. The full program costs $40 which seems expensive to me but after having used it for so long I can tell you it is worth it. I've been able to get free upgrades throughout the whole 10 years I've had it.

How I manage it is I figured up how much I would need to set back per paycheck for each expense. For example I know that my car tag has to be renewed every year and it will cost me $85 to renew it. So I divide the $85 by 24 since that is how many paychecks I get in a year and see that I have to set aside $3.55 per paycheck.

It is confusing the first year. Like with my car tag, it is due in October so when I'm setting it up now I have to divide by how many paychecks are between then and now. $85 divided by 9 since that's how many more times I'll get paid before I have to renew my tag so between now and then I'll set back $9.44 from each check. Then once you've paid for the current year change your allocation from $9.44 each paycheck to $3.55 from each check and by the time it rolls around again next Oct there will be $85 in that 'envelope.'

So, without making a long story even longer let me just say that I've used the envelope system for years and it works!

[sinead]

Thanks, CHeryl! That's good info!