Divide your cash into envelopes

tiff

I was too afraid to start because not sure how much to put in each envelope and worried it would not leave enough in the current account in case of direct debits. I really should go and write all the DD's down and maybe round up or something, how did you guys do it?

yorpington

tiff I made a spreadsheet and rounded up all the DDs so there was a small cushion in my bills account and I've been checking online every day just to make absolutely sure there are no nasty surprises. I've learned here to always round UP bills and debts and always round DOWN your balance and incomings.

The thing I have found is to be really strict with it. If my husband or I spend for something on our debit cards which should really come out of the envelopes then in the evening we reckon that up and take the cash out to reimburse ourselves. But mostly we just don't spend on those things unless we have taken money from the envelope first. It's been really good for controlling 'forgotten' spending that way.

tiff

Yeah I could easily check every day, I do that most days anyway. We dont spend a lot as money is tight, but it might help to control grocery spending if I have the cash in an envelope. I'm not good with spreadsheets, will have to ask DH to help with that.

yorpington

I love Dave Ramsey by the way

keepcalmanddrinktea

This is a great idea, just going back to basic old fashioned budgeting :-)
When i was young every Friday when my dad was paid he would sit at the table and dish out the money into pots for the different bills, bills were paid when they came in and the money was always there for them, my parents never had a credit card, everything was paid for in cash, and things saved for not bought on a whim.

I do basically the same thing today except my 'tins' are set up on line, when my husband is paid (monthly) i split the money into my virtual tins

It really does work, i have just had my new kitchen fitted after saving in a virtual pot for 12 months:) It was fun seeing my funds grow and such a good feeling to be able to had over all that cash

tiff

Thats fabulous keepcalm, glad to see others buying things with cash.

yorpington, I dont always believe a lot of what Dave Ramsey "preaches" ie giving a percentage of income to the church but I understand that is the culture in America. The stuff about paying with cash and living below your means is really what inspired me to turn our finances around. I love listening to his podcasts for motivation.

yorpington

tiff I completely agree. I scroll past a lot of the stuff but his actual financial advice about controlling your own money is brilliant. I love the podcasts too.

I know he endorses the envelope system. Using it we were just able to budget and replace our broken TV with a nice new one, we paid cash and got a discount just like he said!

What I like about the envelopes so much is not having to keep in my head how much money I need in my account for x, y and z. I've already worked out how much I need, and I can see in the envelopes how much I've got. It works great.

lilac_lady

Using cash only really wakens you up to your spending habits.

It's one thing handing over a bit of plastic but when you hand over the cash you pay more attention which hopefully leads to spending less on "fripperies".

missladyannie

Im still loving the envelope idea! Its worked really well for me this month x

PJMardy

Hello! I'm a new returner and in the process of sorting out a DMP for myself... my worst thing is budgeting and just spending bits of cash on nonsense then running out of money about 10 days before pay day. Every month!

So, I've created a new spreadsheet with my budget on and I'm going to do the 'envelope' idea, though with online accounts. I think it'll really help me! I get paid tomorrow (finally!) so will be able to divide everything up then. I'm quite excited!