raising a mommy

raising a mommy

Saturday, March 29, 2014

why i love envelopes

Today's blessing:

Have you discovered the envelope system yet? If you haven’t, you really should! Along with a solid budget and a frugal mindset, it’s how we've managed to not only make it on $1100 a month since August, but we've managed to pay off some debt. Here’s what you do:
  1.  Read the Total Money Makeover, take a Financial Peace University class, or spend some time on Dave Ramsey’s website learning about the baby steps.
  2. Complete baby step #1. (Have $1000 in savings.)
  3. Make a list of how much you spend on everything during the month. Eliminate everything that isn't absolutely necessary. Reduce everything that is. Seriously. Reduce it until you can’t imagine possibly living on that little.
  4. Make an envelope for every item that’s left on the list. For example, we have envelopes for car/renters insurance, gifts (so Christmas doesn't sneak up on you), pet expenses, clothing, eating out, car expenses, charitable giving, and discretionary. (The last one usually ends up being an extension of the eating out budget, but it’s there just in case we have a small expense that we didn't anticipate or find a really great sale on something.) Groceries get a separate wallet, because, let’s face it: an envelope wouldn't last long going grocery shopping at least once a week. Gas, student loan payments, and phone bills go on the debit card.
  5.  Every month, put the pre-determined amount of cash in the envelope. Once it’s gone, it’s gone. If you have no money in your gift envelope in December, you better start baking cookies. If the grocery money runs out, start rummaging through the freezer or pantry.
  6. Spend every penny of your income that’s left paying off your debt. If you don’t have any debt, you’re welcome to some of ours. We have plenty. (All student loans, though. No credit cards or car payments or anything like that. I guess if we have to have debt, I would prefer that kind…)

I first truly appreciated the envelope system when we got our $600 car insurance bill, and I didn't flinch when paying it. I just took the money out of the envelope and deposited it in the bank. You get a break if you pay all six months at a time rather than going monthly, so it’s definitely saved us plenty of money (and stress) in the long run! I no longer dread paying bills every month, because I know exactly how much we have and how much needs to go where!

The whole "pay cash" "gazelle intense" "live like no one else" lifestyle is something that the dork in me is absolutely obsessed with. If you're even the least bit intrigued, we should chat. Come over for a cup of tea. Or have me over for a cup of tea. Or we could go out for coffee/tea/pie/lunch, but you have to give me plenty of notice so I can make sure I have money in the budget for it. Seriously. It's a little disturbing how much I love to talk about this stuff and share what I've learned.

If you want to get started, you can purchase fancy pretty envelopes from a site like this, you can make your own, or you can do what I did:

As you can see, they've been loved. I hope to soon replace them with cute little cloth pouches, but it's not quite at the top of my to do list yet!


  1. You amaze me sometimes. Often, actually!

  2. that's pretty awesome. I wouldn't want all that cash laying around the house... I wish bank accounts had "envelopes" (by the way I found your blog through five minute friday)