Envelope System???

iVillage Member
Registered: 10-16-2007
Envelope System???
5
Sun, 07-19-2009 - 7:41pm
Can someone explain the envelope system for me? I am thinking of starting this for groceries, daycare, etc... Thanks Liz
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iVillage Member
Registered: 11-14-2008
Mon, 07-20-2009 - 10:42am

I am not a Dave Ramsey follower although I do agree with some of his suggestions. I think the envelop system is great for some people, i hope it works for you.

The idea is once you get paid in your checking account take out the exact amount of cash you will need for the week or two weeks whatever you decide. Buy some envelopes at the dollar store, then label the envelopes with groceries, daycare, gas, blow money, etc. Divide up the money into what your budget allows. This way you don't have to go back to your bank account and once the cash is gone it is gone. Repeat next time you get paid. I know one of the posters here (Marie I think) uses one envelope and different colored paper clips for each budget item. She has each color memorized as to what category it is for. You will have to see what works for you.

Good luck.


iVillage Member
Registered: 11-17-2007
Mon, 07-20-2009 - 11:37am

Dave pretty much makes envelopes for things that go up and down. Like food, going out to eat and such. Daycare unless it is a baby sitter kind of day care you would write a check for because that if I remember right is a tax deduction. You never want to pay cash for a tax deduction if you can get by without it. You need the check for your receipt.


But clothing, hair care and such yes an envelope would be good for that when you are starting out.


Mary Ann


iVillage Member
Registered: 03-26-2003
Mon, 07-20-2009 - 5:07pm

I love the envelope system.

 

iVillage Member
Registered: 10-16-2007
Mon, 07-20-2009 - 8:27pm
Thanks everyone for all of your explanations. I am going to try the envelope system, but as of right now I don't really have a budget written out. I have a spreadsheet that I use every week that shows what is due that pay date.
As for daycare... I use my SIL so we pay her cash unfortunately and I can't right that off :( Oh well.
I guess first ting first I need to write out a budget.
Thanks everyone! Liz
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iVillage Member
Registered: 08-04-2008
Mon, 07-20-2009 - 9:29pm

Basically the envelope system is a way to categorize savings that might be irregular, and level it out over time so you do not get slammed all at once and have to resort to credit cards.