Envelope Budgeting Resources
I’m sure the majority of you are familiar with envelope budgeting, where you pull aside cash for various budget categories and keep an envelope for each. Fiscal Geek has a great description, basic how-to’s and commentary on how the system worked for him and his wife. If you’re opposed to carrying around cash, here is an interesting idea for using prepaid gift cards, instead. Dave Ramsay has a fancy-schmancy envelope system that comes in a nice case. It’s $19.95, but might be worth the investment, especially if you like things all neat and tidy (and a great system will help keep you motivated). And, for those of you who don’t get our weekly newsletter, you missed these free envelope template and tutorial from from Kelleigh Ratzlaff Designs. These are beautiful and would be so fun to use.
Now, I already told you that I try and use my credit card as much as possible to get the rewards points, but I still manage to use a virtual version of the envelope system. I use YNAB (You Need A Budget) software and love it. It is a bit more work in that you need to enter all your checks and card charges, but it works for me. Each month I budget the amount I have to spend in each category (envelope) and distribute my income accordingly. The great thing is that each credit card charge is deducted from my envelop as I enter it and not when I pay the bill at the end of the month. This gives me a more true picture of how much money I actually have available.This program also builds in a one month cushion if you use it correctly. You slowly build up a “buffer”, at which point the money you make in January, is not budgeted until February. And, since I set aside funds in envelopes for upcoming expenses, that estimated tax payment or dental bill no longer hurts when I write the check. I’ve already budgeted for it and the money is there!
I tested several trial programs before deciding YNAB was the one for me. Another popular program is Mvelopes.com, which also has a free trial. PearBudget is also very popular and offers a 30 day free trial ($3/month thereafter). If you have Excel, you can download this free program. Simply trying one of these programs for 30 days, might be an eye-opening endeavor if you haven’t tried it before.
The envelope budgeting method helps you:
- Spend only what you have
- Choose your priorities (if you overspend in one category, you must take from another)
- Stay out of debt
- Easily assess your spending habits
Do you or have you used the envelope system? Do you have any tips or tricks? What is your favorite system? Simple or high-tech?
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I use a system called Budget Map, which has worked wonderfully for me. It functions similarly to what you’ve described above, but it fits in my checkbook; in fact, it takes the place of a regular check register. It allows me to record my credit card, debit card, and check purchases as I make them. I can update it anytime as long as I have my purse with me, so I’m not dependent on the computer. And I can look at it while I’m out shopping so I know exactly how much money I have left in each category and whether I can buy anything else that day or not. Finally, it also enables me to budget my savings in a similar manner, which I’ve really appreciated. It does cost $33 for three registers, but I feel it has been well worth it. I have stayed in my budget for years now! Go to http://www.budgetmap.com for more info. I
I have been on a cash only basis for about 3 years. I have NO credit cards! If I do have to pay a bill online, I use the pre-paid cards. I put my cash in envelopes and put the envelopes into a coupon caddy file. This system has worked for us and didn’t cost a lot.
Have an organized and blessed day!
Nancy, that was the product I knew I’d seen years ago, but couldn’t find when I was writing the post. Thank you!
Just a little thought on the pre-paid credit/debit cards. There are some quirky rules and regs on those that can make them a little frustrating. We received a $50 Visa card for Christmas and went to dinner a couple of nights ago. We were told that the processing company won’t run the entire $50 toward your meal. They will run 80% of it. Too many people were leaving a tip on the card receipt after there was no more money available, apparently, so they now ensure there’s enough for a tip. It all worked out okay for us, but just one of those things people should know. I’ve heard of some others, but can’t speak from my own experience.
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We use Mint: http://www.mint.com It is a FREE envelope based budgeting system. We were using the Mvelopes website, but that was getting to be costly. I found Mint.com by googling. I did some research on the company before signing up and have been a satisfied user for 18 months now! Users have the option of putting your bank info and other financial info in the system, but it also works without inputting the info. It is a very secure site, so we have inputted our bank info.
Another FREE site is My Spending Plan: http://www.myspendingplan.com/
I don’t use this site, but I have friends that do!!
Both are great sites, but Mint.com is my favorite!
I love YNAB too. Been using it almost a year.