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It might just be shuffling money but...

February 1st, 2008 at 12:20 pm

It's hard to describe what the last three days have been like for me. I've been in the depths of despair and have been almost elated, also. Why? Well, let me tell you!(Glad you asked!) And no, we didn't win the lottery!

About three weeks ago or so (after we last paid bills) we set aside envelopes to put cash from the business in to pay expenses. We realized that if the money is in our pockets it gets spent. So we wrote things like Rent, Electric, Advertising, and Materials and Supplies on regular envelopes and every night, after the shop closes, we sit down together and go through the sales for the day and put it in the envelopes. Business is slow (apparently in this field it drops off somewhere around Christmas and stays slow until early to mid February) so there have been days when we only had $25 to put in envelopes but we'd put $5 in this one, $10 in that one, etc and keep just a little for ourselves. We do this every day we're open, 6 days a week. Keep in mind this is our first time of doing this and we had no idea if it would work.

Then recently we opened a checking account at a bank closer to the shop. My checks go into that account as have some cash and all checks written at the shop. I've managed to be very careful with that checking account and rarely write checks from it. DH has a debit card for it but I don't because I KNOW from experience that it's just too easy for me to spend money with a debit card. Long story there but for me plastic just isn't money. It's.. plastic! Instead I get a little cash from when I need it. When it's gone, it's gone.

We just started Financial Peace University (FPU) last week and got Dave's envelope system. Since we already have one going for the office expenses so we decided to use the FPU system for things like food,
clothing, laundry, gas for the truck, etc. After looking at that cash flow plan a couple of days ago I didn't see how we could possibly do this and was so upset! And I'm still not sure how we're going to do it. But yesterday I realized that all this is just part of getting control of the finances and rather than panic and worry I need to stay calm, learn from this, and USE it to help us.

So last night I realized we needed to get the phone bill paid immediately or we'd incur a late charge. Now mind you, in the past even if I had the money to pay on time, I rarely did. I just didn't think about it and we constantly were late on bill payments and paid those late fees.
But last night I did think about it so I called the phone company and paid the bill over the phone with an e check, making sure I noted that in the checkbook. We had the money in the checking account so there
was no danger in me doing that. Plus we had the money for that bill in the Phone envelope set up recently.

So, this morning I picked up my paycheck and went to the bank. I took the FPU envelope system with me. It's very small, looks much like a wallet and fits in a purse easily. I knew the amount of cash I needed to get for the next two weeks and knew how much for two of the four categories I needed. I couldn't remember the other two amounts but knew the total amount to get. So I get to the bank and rather than go through the drive through I walked in. Why? Well, there were a couple of reasons but one was something that just dawned on me this morning. When I use an ATM or drive through it's just too easy. It's too easy to get cash from the ATM or a drive through teller without THINKING about it. For me, it's similar to using plastic. So I decided to go in to the lobby because that makes me THINK about money. Ehh, it's hard not to think about it with all the money related stuff staring at me. Also, I needed the cash broken down into certain bills and it was going to take a little while and it's cold outside and there's no need to hold up other customers while I piddle with money. So I went to the teller, gave her the deposit slip and check with the 'less cash received' part filled out and said, "I need this cash in a certain way." No problem.

I got $87 for food for two weeks, $87 for gas for the truck for two weeks, $25 for entertainment for two weeks (not that we will use it but we figured that amount in on the CFP sheet so I did it) and the remainder was $51. I walked to a side counter and put $87 in the food envelope, $87 in the gas envelope, $25 in the entertainment envelope, and left the $51 remainder in the bank envelope. Then I headed to Wal-Mart because we needed bread, lunch meat, and a little fruit.

Okay yall, this is where it gets good! Why? You'll see change of thinking popping up a lot though you may see some of that already. I got to Wal-Mart and walked in with my little envelope system and my keys and my cell phone and nothing else. No checkbook, no cards, not even my purse. I walked by the deli and saw they had my favorite egg rolls at 2 packages for $5. I bought a package of orange chicken a few days ago for dinner one night this week and figured egg rolls would be great with that so I got one package. Not two, not three, just one. Then I picked up bread, lunch meat, 3 bananas and 2 apples. That's it. I didn't wander around the store, I didn't look at every thing there. Oh, I thought about it but I had $87 in that envelope to last two weeks so I knew I couldn't fritter it away. I got what we needed and went to the self check out stand where I rang it all up and paid cash - $10.59. I paid for it, put the bills and change I got back back into the food envelope, wrote on the envelope what I'd paid and the new balance, and got out of there.

I got back to the office and told DH how much my check was and such. I balanced the checkbook, told him what's in it (a little more than we usually have, even on my payday!) and started showing him the envelopes with the money. He had the office envelopes in his hand and we started going through those while we talked. He said something about being a little short on the rent money which is due today then commented that we had enough in the bank to cover it. At about that time he handed me the phone bill envelope and told me to go ahead and deposit that and send the payment. I said okay then it hit me. I paid that last night out of the checking account! I told him and he told me to just deposit it then. But he'd just said the rent money was short so I asked what he needed for that. He counted and told me. I opened the phone envelope and handed him the money and said "There, done."

I know, this is simple stuff to some of you but this is a light bulb moment for me! He took the money, grinning, added it up, saw that it was enough and called the landlord and told him to come get his money when he was ready. After giving him that money I had $25 left of the phone money. We slipped that into the electric bill envelope which is still short but we have until the 12th to pay it.

Okay, so the phone was paid last night, the rent was paid today, the electric bill envelope has about 1/4 of what it needs with about 11 days to go, and we have plenty of food because we believe in stocking up when prices are really good.

Realizing the bank account was in the positive(not a lot of money there but a little), he went ahead and ordered something he needs for advertising purposes. The cost was only about $38 or so but he did it over the phone. Afterwards, he realized that he had $30 of that $38 in the advertising envelope so he got that out and moved it to the savings envelope. Yeehaw, another $30 in there!

At this point, yall are probably thinking "Big deal, they're just shuffling money around!" and that's true, we are. But this is our first time doing this and it takes awhile to tweak it so that its just right. For awhile, it will go on like this and that's okay. The point of all this, though, is that we're beginning to see the light about how we spend and we're beginning to be able to pay things when they need to be paid, and still have a little left. And more than that, we actually have money to shuffle!! I can't tell yall what this feels like to me!

The main reason we can do this is the Cash Flow Plan and the Allocated Spending Sheet. They're helping us prioritize what needs to be paid. A lot of people can do this without help but we need help and FPU is giving it to us.

No, it won't be easy and it's going to be very rough at times. We have a lot of old debt to deal with and at some point we will. But we have to take care of the four walls and the business and that's happening, slowly but surely. And my next check will be very small since I am only working a few hours this week. But most of the bills will be paid and we'll have food. And life will rock on, even if it rocks a little slowly. Smile

I hope all this makes sense to yall. I'm just so excited I had to tell somebody! I think I see light at the end of the tunnel.

9 Responses to “It might just be shuffling money but...”

  1. nance Says:

    Isn't it exciting when you finally "get it" and know you can "do it"?
    You are in control! Rock on!

  2. KellyB Says:

    Fantastic!!!! Contratulations, you are definitely "on your way" to managing your money instead of it managing you! It is definitely a lightbulb moment, and paying your bills on time will give you a wonderful feeling of accomplishment. Use the cash system for a while, until it becomes easy for you. Then you might want to try automating some of your bills or paying them online...it is so quick and easy! But not until you've gotten through the cash system for awhile, especially since you mentioned your plastic/not real money dilemma. Likely online bill paying would be like that for you too, but it's easier once you've seen the cash go in and out month after month. Good luck on your continued success!

  3. Aleta Says:

    What you are doing is great. Sometimes we have to do things in a way that will impact us. The great thing is that you're learning priorities, you and your husband are having to be on the same page and you're using a good system.

    I enjoyed reading your article. It was very well written and just exciting to see how change can come to all of us. Your debt can come later. Right now you're having to keep up with the day to day living stuff and the rest will follow. Contratulations to you and I know you'll do well in the months to come. Looking forward to reading your blog and your progress.

  4. ceejay74 Says:

    It makes sense to me! If I end up having surplus money to pay something off early, then the future money goes somewhere else. It's been earmarked, but if that expense is taken care of, it's re-earmarked for some other purpose. It's great that you're putting the money toward other necessities, not back in your pocket. I pay for ALMOST everything with real money now, for the first time in my adult life, and it makes my heart swell with pride and relief sometimes that I've gotten myself on the right path at last.

    I agree about your writing--it's very compelling. Keep regaling us with your money revelations!

  5. compulsive debtor Says:

    Good job, Denise. Isn't it great when that light bulb goes on?

  6. Ima saver Says:

    Yes, it makes sense to me cause I have used the envelope system for almost 43 years. I cash the paycheck, look at my budget, put all the cash in the envelopes to pay the bills.
    Twice a month, I sit down pay all the bills and take that money back to the bank and deposit it. I know I can do it on paper instead, but it just doesn't work at well for me as what I have done for 43 years!
    I always have a pay me first envelope in there too. (Or emergency fund)

  7. Aleta Says:

    Ima: It must be a good working program because it seemed to have worked for you.

  8. NJDebbie Says:

    Congrats! I love your enthusiasm and your perseverance. I'll keep you in my prayers!

  9. KellyB Says:

    One more comment about the "just shuffling money around" - that is what your budget is until you work it out completely! When you see that to pay one thing it means not buying something else...or to buy something unplanned may be money having to come from another spot in your budget...the lightbulb comes on that there is a "sacrifice" of one thing to do another. Your income is just so much, and then YOU decide to give each dollar a job to pay toward a bill or groceries or savings or whatever. And yes, our pay on the last day of the month is really for budgeting the next month, so use it that way too. Continued success, update us often!

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