Welcome to the Club

Getting New Moms Adjusted to Mommyhood One Step at a Time

Group Home

Starting the envelope system

Posted by on Jan. 3, 2013 at 12:14 PM
  • 47 Replies

We're starting the envelope system for this year to try and
save some money and get a control on our finances. 

Does anyone have any tricks of the trade? 

I know -how- to set it up and how to do it but
I wondered if there were any tips from old pros ;) 

by on Jan. 3, 2013 at 12:14 PM
Add your quick reply below:
You must be a member to reply to this post.
Replies (1-10):
Larsbug
by on Jan. 3, 2013 at 12:18 PM

 not sure, don't do it but curious now.

MichelleK41
by on Jan. 3, 2013 at 12:42 PM

What is this system?

HisSweetheart07
by Bronze Member on Jan. 3, 2013 at 12:44 PM

essentially you put away the cards and just use cash for everything. 

However since in our world it's virtually impossible to pay cash for your utilites - my plan is to use my checking account to pay everything (utlities and morgage) online and just put that amount in the account. Everything else (gas, food, etc) will be handled in cash and gift cards (we have gift cards from Christmas, not buying new ones). 

So for every paycheck, we'll pull $100 for gas and put it in the gas envelope, $150 for food and put it in the food envelope,etc. Then at the end of the month whatever we have left in the envelopes will go into our savings account or be moved to our "big item"envelope (right now it's a new furnance we're saving up for) which our big item envelope will not stay in that envelope. I will be making deposits weekly on it and putting the deposit slip in the envelope because I'm not having $3k in cash sitting in an envelope y'know? It's going to be hard enough doing it with gas, food, and clothing right now without worrying about losing it or someone stealing it. 

My biggest thing right now is what type of envelopes should I use? Just regular letter envelopes I'm sure would work but I figured someone who's done it would have a say about it. 

Quoting Larsbug:

 not sure, don't do it but curious now.


mmeredith
by Member on Jan. 3, 2013 at 12:54 PM

I think that's a great idea. I'm wanting to do this w/ dh. We'll see if he agrees. I was also thinking of writing on the envelopes how much of it I spent and what day. Like if you run out of bread take a couple dollars and write that you spent 1.50 on bread on the date. Or just keeping the recites in the envelopes. Good luck

HisSweetheart07
by Bronze Member on Jan. 3, 2013 at 12:55 PM

Basically you get envelopes, write on them your expenses and then what you are saving for. You figure up how much a pay you're going to put into those envelopes and then you use the cash that's in the envelopes to pay for whatever it's for. 

So for example:

Envelope #1: Gas $100/paycheck
Envelope #2: Food $150/paycheck
Envelope #3: (insert name)'s spending allowance: $50/paycheck  (like for your dh's lunches or for your children's school supplies, etc) 

Envelope #4: Debt #1: $25/paycheck  Goal: $500.00
Envelope #5: Debt #2: $30/paycheck  Goal: $800.00 
Envelope #6: Big Ticket Item: Whatever is saved from the month   Goal: $3,000
(or you could make the big ticket item something fun for your family like vacation or trip to theme park) 

You're also suppose to do it with your utlities and mortgage or rent but I can't find it in myself to go to the bank, cash a check, come home, sort it out, then run back out to the bank the next day to make the deposit. I plan on figuring out what's being paid during what paychecks - having that amount plus $20 depositied into the account and the rest brought home to be split between the envelopes as much as possible. 

The first months are going to be really tight and I'm sure we're going to screw it up lol but it's a learning tool. It's to show us how much we spend and where we spend it the most. It also forces us to think smarter about purchases before just doing it. 

Quoting MichelleK41:

What is this system?


MichelleSw
by CoolStory on Jan. 3, 2013 at 12:56 PM

I didn't know it was a system but YES... I've recently started using!


Amy127
by Bronze Member on Jan. 3, 2013 at 12:59 PM
1 mom liked this
Don't borrow from other envelopes. Combine envelopes if you need to. Borrowing and forgetting to put back can lead to other problems. You don't want to make it harder than it needs to be. We keep envelopes we don't regarly need at home to reduce temptation of borrowing from it. Hope that helps. It really has worked for us. We were able to pay all our propane and vehicle maintenance/tag renewal in cash in 2012. We've since added medical for copays and prescriptions and a Christmas and clothing envelope.
Posted on the NEW CafeMom Mobile
BipolarMom09
by Member on Jan. 3, 2013 at 12:59 PM

I have done this in the past and plan to start back with it when we get things caught up this month. I just use plain white letter envelopes and label each category. When the money is gone, it's gone. The change we get and have left over at the end of the month will go into our change jar, which we save up for extra spending money on vacations. As far as paying the utilities, starting next month I am going to pay each bill with my credit card and then pay off that balance on my credit card with the checking account each month. This way it will help build my credit too. The categories I have set up are: Groceries, gas for car, pets food, diapers/wipes, dogs grooming (I split this up over 3 months time and take them once the 3 months is saved up), dogs flea meds (I split this up over 6 months time and just order every 6 months so this way it is broken up rather than one lump sum at once), haircuts, car expenses (also split up between 3 months time and once it is saved up I get the oil changed, alignment if needed, etc.). Each week I also will take a certain amount out of each check and deposit into our savings/emergency fund and also I am starting another account for saving for Christmas. This way, I am hoping Christmas this next year won't be soo tight and stressful! :) **I also know of people who have an entertainment envelope, utilities, allowances, savings, etc.
Hope this makes sense and helps!! It can be time consuming but really does help you keep track of all spending and budget better. Good luck!

Amy127
by Bronze Member on Jan. 3, 2013 at 1:01 PM
I have a specific savings account for mortgage and van payment. Every week, I transfer the amount I need. Then when it's due, the mortgage comes directly out of that account, but I have to transfer r he van payment amount back over on the day it's due.

Quoting HisSweetheart07:

Basically you get envelopes, write on them your expenses and then what you are saving for. You figure up how much a pay you're going to put into those envelopes and then you use the cash that's in the envelopes to pay for whatever it's for. 

So for example:

Envelope #1: Gas $100/paycheck
Envelope #2: Food $150/paycheck
Envelope #3: (insert name)'s spending allowance: $50/paycheck  (like for your dh's lunches or for your children's school supplies, etc) 

Envelope #4: Debt #1: $25/paycheck  Goal: $500.00
Envelope #5: Debt #2: $30/paycheck  Goal: $800.00 
Envelope #6: Big Ticket Item: Whatever is saved from the month   Goal: $3,000
(or you could make the big ticket item something fun for your family like vacation or trip to theme park) 

You're also suppose to do it with your utlities and mortgage or rent but I can't find it in myself to go to the bank, cash a check, come home, sort it out, then run back out to the bank the next day to make the deposit. I plan on figuring out what's being paid during what paychecks - having that amount plus $20 depositied into the account and the rest brought home to be split between the envelopes as much as possible. 

The first months are going to be really tight and I'm sure we're going to screw it up lol but it's a learning tool. It's to show us how much we spend and where we spend it the most. It also forces us to think smarter about purchases before just doing it. 

Quoting MichelleK41:

What is this system?


Posted on the NEW CafeMom Mobile
HisSweetheart07
by Bronze Member on Jan. 3, 2013 at 1:01 PM
1 mom liked this

that's a really good idea! the only issue I'd find with writing it on the envelope = it would mean having to make new envelopes every month. But putting the reciept in the envelope would be a great idea (unless you have more than one category on the same reciept but I'm sure there's a way to figure it out). 

Then you could also track how much you spent on what each month - so for example: You could see that you bought 4 gallons of milk at $4/gallon last month so that this month when you notice the milk is on sale for $2/gallon you can grab 8 gallons for the same price - freeze the extra gallons until needed and be able to save next month! 

Quoting mmeredith:

I think that's a great idea. I'm wanting to do this w/ dh. We'll see if he agrees. I was also thinking of writing on the envelopes how much of it I spent and what day. Like if you run out of bread take a couple dollars and write that you spent 1.50 on bread on the date. Or just keeping the recites in the envelopes. Good luck


Add your quick reply below:
You must be a member to reply to this post.
Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

Advertisement