Sunday, December 13, 2009

Money Grows In Envelopes

Yes, it does. When I use them right, that is.

I love lists and paper and checkmarks. I've made budget plans and expense lists. I've mapped out goals and rearranged bank accounts just so I can better manage our money. So far, it seems the envelope system is what works best for me.

After 2-3 months of using the system properly, some of the envelopes are filling up nicely with wads of cash. It's very exciting to see the fruit of this labor.

How it works:

I first determined our expenses, then chose categories for which I need to have cash only. I decided that, being an impulsive shopper, I need to keep a close eye on expenses like
  • eating out
  • household items (this is dishes, decor& knick-knacky stuff that'll nickle and dime me into a corner in no time)
  • entertainment
I also included those things that are bigger expenses annually:
  • camping
  • Christmas (gifts, candy & donations)
  • Vehicle maintenance
And, there's never enough money for 'extras' like medical care & hubby's tractor hobby, so they get an envelope and are included in the budget.

After a couple of months, the camping and Christmas fund begin to grow. Now there's suddenly money for things like dental work. (phewf!) And I know that when summer arrives, we'll have money set aside for camping and I won't have to scrounge around for it.

Why the envelope system?
  • curbs spending (when money's gone, it's gone)
  • previously 'forgotten' budget items are now included
  • less worry (looming car repairs, Christmas & medical bills are funded)
  • learn self control (when money's gone, it's gone)
It's working for me so far, though I must admit that it's taken a few tries. The first couple of times I tried it, I ended up forgetting to dole out cash on payday and before I knew it, the money was gone. Or, I'd end up stealing from one envelope to feed another. Before I knew it, all the envelopes were empty.

It happens. I kept trying because I believe it's a good system. I just need to learn how to use it. This time I'm having more success. It helps to see cash growing in those little envelopes. It's proof I'm succeeding.

Okay, so it's not quite a money tree, but it's a start!

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