On our constant conquest to become financially healthy, smart, etc. we have decided to try a new system this month. I am sure most of you have heard it.... it is the cash envelope system.
So basically, we have it calculated out what we should be spending per month on 6 different categories including groceries, going out, etc. Each category is going to have its own designated envelope to keep that specific amount of cash in. Since today was payday, Adam went to the bank to withdraw the cash to keep in the envelopes. The cash should last us for two weeks (until next pay day). Other things like electricity, rent, cable are all still paid via online banking.
I am really excited to try something new. This will make us really watch what we spend and if the money runs out... then its out. I think it will be a challenge, but hopefully a good experience. The toughest thing is going to be to remember to grab the cash out of the designated envelope and then put the extra cash back in the envelope.
We have talked about what to do with the extra cash (if there is any) and I think we are going to create a jar to stuff it in... so when we go on vacation we can use it as spending money or something. Or maybe for shopping trips, this is still TBD. I will keep you posted on how this system works out for us. If anyone has done this before, I would love to hear your experience with it!
One of our couple friends does this and they have done it for years now. They love it and it seems to really work for them. I just hate going to the bank but I do realize that I am more aware of what I am spending when I have cash rather than just swiping the good ole' debit card :/ One thing Seth and I which I'm sure you heard but it actually does make a difference....we have a set percentage that is automatically taken out of our bank account bi-weekly and goes to our investment accounts. If you don't have it done automatically, they say you will never save what you want to because you just won't do it consistently. Another thing I did was put together and excel spreadsheet which shows an average of what we pay out in bills, misc, leisure, etc and it gave both Seth and I an idea of how much money is leftover in the end and how much we should be putting into savings so we just don't spend it on things not needed. Sorry for the novel, hope this helps! Keep writing what you guys do....it's always nice to get other ideas.
ReplyDeleteI did the cash/envelope thing a while back and it was HARD!! Just because some months I would go to Target constantly and buy stupid things...and others I wouldn't. Haha! But it is much more of an emotional investment :)
ReplyDeleteWe have a budget and work on tracking it...however, the most useful thing is pulling out all our transactions out of our bank account each month and categorizing them (like the comment already posted said they do). That's pretty amazing when you see what you are spending it on. That was the month I forbid myself to go to WalMart/Target/CostCo on a weekly basis and started the 30 meals in 30 days because it was grocery store all the time!!
Good luck on this and you will do great!
Thanks for both your comments! Steph- we already direct deposit bi-weekly into our savings accounts... the problem we kept having was over spending on dumb stuff so every week or two we would be transferring a couple hundred back into checking. This is what we are trying to stop doing.
ReplyDeleteBrittany- I think that is a great idea, we have done that to some extent, but could do better. thanks guys!