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I heart envelopes!

February 16th, 2008 at 09:25 am

This morning I went through the bank drive thru since the lobby isn't open on Saturday. Since I've gotten into the habit of going in to the bank for all transactions I really missed it this morning! But I managed. I gave the teller the list of cash amounts and asked him to put each amount in a separate envelope. He gave me an odd look but did it.

After finishing at the bank, I went to Wal-Mart to do a little grocery shopping. I spent $35, leaving $95 for food.

Someone emailed me asking what payments are 'enveloped' and exactly how we handle our envelope system. The business and larger expenses are funded daily by money that comes into DH's business and things like food, gas, and clothing are funded by my pay.

Here's the breakdown of the envelopes funded by money from DH's business:

The business envelopes are funded six days a week because the business is open six days a week and is mostly a cash one. Each night we sit down together and record what's come in for the day. Some cash and all checks are deposited into the bank. Varying amounts of the remaining cash are put into each of the business envelopes and because we add money almost every day we know where we are with each envelope at any given time. When it's time to pay a bill the money is removed from the envelope and if we have enough in the checking account to pay that bill we pay it and put the cash in other envelopes that need more money. If we don't have enough in the checking account to pay that bill the cash is deposited into the checking account and we write and send the check for that bill and start filling that envelope for the next month. Using this system we're able to know exactly where we stand with bills, pay them on time and not worry about spending food money on advertising or some other need.

The expenses covered by my pay every two weeks are set ones and here's a breakdown of them:

Food - $130 Covers food for two people.

Gas for truck - $130 My pay for this period was less than usual so I only put $75 in it. DH will fund the remainder.

Entertainment - $25 Yes, we do budget a little for entertainment. If we didn't, we might go nuts! We didn't spend the last pay period's entertainment money until last night and it was nice to go out to eat and know it was budgeted for. No pain, no stress, no guilt!

Laundry & Clothing - $20 We don't have a washer or dryer so I go to the least expensive washateria to wash and dry clothes. I don't spend $20 in two weeks and the remainder is kept in the envelope to help with clothing expenses. We rarely buy new clothes and even if we do they aren't at all expensive. We generally spend less than $200 a year on clothes.

Whatever is left of my pay, whether it's $10 or $100, goes into savings.

So there you have it - the envelope system that works for our business and personal expenses both. Is it any wonder I have a mean crush on Dave Ramsey and Financial Peace University?

4 Responses to “I heart envelopes!”

  1. littlemama Says:

    Dave's my hero too! Smile

  2. luxlivingfrugalis Says:

    Dave is a guru - you are the hero in the trenches doing the steps! Denise & hubbie are doing the grunt work! I heart people who try to live their values and are working hard at it! Hats off to YOU!!

  3. ceejay74 Says:

    I just started taping Dave's show--my family and I watched it on Sunday for the first time. Even though I'm the budget geek in my family, they found it interesting and his advice refreshing. We'll be watching regularly now!

  4. fiveinthehive Says:

    My dad paid for my husband and me to attend Dave Ramsey's Financial Peace University (we have been to two classes now) and I am now the co-leader for our group in the event our actual leader cannot be present for any reason. Dave Ramsey is my dad's hero, and he is mine, too! I am such a nerd - I have the man's CD's playing whenever I am not streaming Dave's live show online - and our 4 month old daughter actually gets excited when I have her in the class with us! Now I just need to get DH on board more than he is now! Smile

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