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Talk It Out:
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"We
are trying to make the
transition from paying bills
from paycheck to paycheck and
implementing a system that is
an envelope style; however
envelopes for us are also
cumbersome AND we are gaining
some minute perks (thru
Upromise) by using our debit
cards for purchases. We
are considering a process
that would place certain funds
in an envelope (ones that we
want to target to be strict
with - like our entertainment
fund) and the rest will stay
in an interest bearing
account which we will keep a
spreadsheet that lists the
budget categories.
Each payday we will allot to
the interest account the
appropriate amount of funds to
cover budgeted expenses.
Any funds left over will
be used to pay extra on our
debts or may be given to
charity. When we shop,
we intend to take time to
prepare. We must make a
list and stick to it and we
review the flyers and coupons
before we go to be sure to get
the best deals. We
will then transfer the
allotted funds from the
interest account to the
checking account and keep
track of our spending while
shopping. We think that
if we are to be wise and
frugal with our budget that
careful planning and
processing is the key.
So often people jump into
the store unprepared... No
grocery list...No idea what
they need." ~ Jen
"My
family loves using the envelope
system. As far as
purchases for clothing, we
budget those in for the month.
We do not buy on a whim.
We have what Dave Ramsey calls a
blow fund too. It is
supposed to be spending money
that does not have to be
accounted for, but we use it for
things like haircuts, postage
and other items that do not fit
in any particular category.
We keep our categories simple.
Such as gasoline and
groceries. I will sometimes use
the debit card for things like
the clothing since it has
already been budgeted for.
I also shop at WalMart and if I
am getting toiletries and
groceries then I do not separate
it. If you feel that you
need to separate it, just have
the cashier ring up separate
purchases for you. The
best thing to do is to
experiment to see what works
best for you and your family and
not to make it too complicated."
~ Angel
"Carol submitted a great question. We listened to Dave Ramsey's talks on CD during the course of several road trips, and were really inspired to apply some of his ideas. I had the same concern about the envelope system. After trying Dave's categories for a few months, we decided to combine 3 categories (groceries, household, misc.) into one, keeping gifts separate. I pay for everything from the main envelope, and when I get home from shopping, I keep the receipt out until I pull any gift money from the appropriate envelope to replace what I already spent. That's what works for us!" ~ Carrie "I don't use envelope system. I am single so I keep a paper memo pad to keep track of every dollar spent: gas food, eating out, clothes, car repairs and fun money. I also put so much out of every paycheck (bi-monthly) in to a Tax Account for property tax, home and car insurance, car tags. I figure yearly amount for each bill then divide by 24 pay periods set aside that amount. Then when a big bill like that comes in I have the money to pay it. I also use a Credit Card to pay some of my bills it gives me a extra 30 days to pay them. I also pay my Credit Card off each month and I carry no monthly balance to pay interest on." ~ Carol. KY "I use the envelope system and it works well. I've found it easiest to divide the money into categories and put all the money for food (my largest section) into my wallet. When I'm out I buy whatever I need from any category from the food money and when I get home I check my receipts, take out the appropriate amount from each envelope and put it back in my wallet, i.e. paying back the food section. This is easier than carrying all the envelopes around." ~ Susan "I have advocated using an envelope system for many years. There are strengths, weaknesses, and challenges with ANY system. When you go shopping and have multiple expense categories, known as a 'split' transaction on one receipt, this can cause confusion. One option is grouping similar items together at the checkout. This way they are scanned together and are easier to identify in your envelope system. You might ask the cashier to create a subtotal for your various groups of items. Create a slip of paper to put inside each envelope and category. When you get home, transfer appropriate cash between envelopes/categories and make note where your original receipt is stored." ~ Maynard "We have used the envelope system for any category that lends itself to impulse spending (like groceries and food) or when we want to set aside a certain amount each pay period (like Christmas gifts or auto repairs). I discovered that the Dave Ramsey envelopes fit in the checkbook wallet I had in my drawer, so I carry the clothing, grocery money and my blow money with me. My husband carries his own blow money and a small amount of grocery money. If I have to pull money from 3 different envelopes at Walmart I do so, but I don't ask the clerk to ring up 3 separate purchases. Instead I check the receipt afterwards and take money from clothing to put back in the grocery envelope or where ever. We have used the envelopes for 2 years now and it has worked well for us." ~ Ellen "We use the Dave Ramsey envelope system and you do have to tweak it a bit for your household. We have a 'Walmart' envelope. It encompasses food, household items, etc. If I buy a gift, I replace the money in the Walmart envelope with the money I have in my Gift envelope. My husband and I also give ourselves a weekly 'allowance.' We can do whatever we want (to a degree) with that money. That way, my husband always has cash on him in case he needs to stop at the store. Then, I reimburse him. We love using the envelope/cash system. It really makes you think about what you buy, because you have to use the real cash to pay. More often now, I put things back because I don't think I really need them. Saves me money!" ~ Tina
Editor's Note: Thanks to these subscribers for taking the time to respond. |
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