Banking Moolah: Envelope System Update

It’s been almost three weeks since we decided to switch to an all-cash envelope system for budgeting our moolah.  Surprisingly, it’s going amazing!  We haven’t stuck to it 100 percent, but I can say that we have a few extra hundred dollar bills left over after only doing this system for two weeks.  Considering I’m only working part time and the business has slowed at Mr. Converse Sneakers’ job, meaning less money for us this month, this is AH-mazing!  Honestly, I don’t know what we were doing with our money before, which is horrible, but we have it all under control now!

I thought it might be fun interesting for you to see how we do our cash budget and envelope system, since honestly this is not a one-size-fits-all sort of thing.  Everyone has different salaries/wages/incomes as well as varying pay days, expenses, and so on.

Here is how we budget:

Mr. CS gets paid every Thursday and is able to see what his next paycheck will be the Thursday before.  He works different hours every week, so his paychecks are never exactly the same, making monthly budgeting impossible for us.  I get paid every other Friday and my checks are usually the same since I have consistent hours.  At the beginning of each month (which has only been once so far), we make a list of any major things we want to use our extra money on.  This month it was our new storage unit for the laundry room:

and Christmas decorations which we bought last week.  We plot out which weeks we have fewer bills and schedule those bigger purchases for those weeks.  We try to over-budget for many things so that we don’t have to worry about not having enough.  For example, we budgeted $100 for the storage unit, knowing that we could get it pretty cheap, but keeping in mind that we might run into extra unforseen expenses.  Luckily, we didn’t, but that means we were left with extra cash!

After we have an outlook on the entire month, we get down and dirty with our budget weekly, usually in the beginning of each week, since we know we will have at least one paycheck coming on Thursday and won’t do any shopping until after that.  Our recurring expenses are:

• $50 for groceries every week (we eat for free at our jobs a lot)
• $80-$100 for gas (we rarely use this much unless we are traveling somewhere)
• Bills, which we use online bill pay for.  These vary from week to week, but are preplanned each month and we have never had trouble making our payments

We also have other expenses we know we have to buy every month, but they vary from week to week and month to month:

• Toiletries
• Cleaning supplies
• Household supplies
• Clothing
• Makeup (which thankfully I don’t buy often since I don’t wear a lot)
• Other random things like oil changes, office supplies, etc.

Every week, we think of these extra expenses and see if we will have any extra money to put towards these.  For example, this past week, we were running low on shampoo, conditioner, face wash, and body wash, so we put aside $20 for all of that as well as $60 for oil changes since both of our cars are due for those.  I also wanted to replace my windshield wipers now that we have snow everywhere and I haven’t bought new ones since I got my car a year and a half ago, so we budgeted $45 for three total.  So far, we haven’t had a problem with these extra expenses that are hard to budget for (since they are needed at random times), and we always are left with a great amount of extra money at the end of each week that we could use for any unforeseen expenses.

The hardest part of switching to this budget has been going to the bank and withdrawing cash each week, which is not hard at all since we live about 2 minutes from our bank.  Saying no to many items has been pretty easy, and we haven’t had to say no to very much since we just plan for the purchases in advance.  We do slip up here and there and stop by Subway for dinner and use our debit cards or buy a magazine or something small that wasn’t budgeted, but that is all part of learning.

The best part of switching has been all of this extra money that we have left in our accounts.  We will see how much we have left over at the end of the month and will probably use them for Christmas presents, but if we keep this up, we will be able to start paying off our debt faster, meaning we can buy a house sooner, reach financial peace sooner, and keep strengthening our marriage, since financial issues tend to be what break up many couples.

Overall, we couldn’t be happier!  We thought this transition would be painful and we would give up right away, but we love it.  We don’t feel guilty any longer when we spend our money and we feel like our money is serving us and not the other way around.  I will keep you posted on how this switch affects us over time and will definitely let you know if anything changes or becomes more difficult.