Sunday, January 13, 2013

Gaining control...with the envelope

I have several items on the list to change in 2013.  One of those items is to get control of our budget and work toward being debt free.  While I'm not a Financial Peace University student or graduate, I am a big fan of Dave Ramsey and this year is the year we incorporate more of his system in our financial life.  The first step for me is turning to good old CASH.  I know, American's really don't do cash these days, we like to whip out our cards to pay for things.  Paying cash is so archaic but at the same time so many, including me, tend to spend more when I whip out the card to pay for everything.

We are BIG users of our debit cards.  And that makes for a lot of receipts and a lot of entries in the register.  I embraced the idea of the cash envelopes because I got tired of looking for receipts in my wallet, or forgetting that I had made a purchase (or five) until my husband was balancing the checkbook, sorry honey!

If you haven't heard of the cash envelope, it is part of the budgeting system that Dave teaches.  Basically, you are taking items in your budget that you would normally pay for with a card, either debit or credit, and removing the card factor and paying by cash making it easier to stick to your budget.  The idea is to take those items in your budget such as groceries, gas, entertainment, clothing, latte's, etc. and creating an envelope with the budgeted amount that you will spend in the envelope for each category and when the money is gone it's gone.  I know that I tend to spend more when I am paying by card, even if it is my debit card.  A few weeks ago I was out grocery shopping, I had brought my list and I was sticking to it and then it happened, I found a few things that I wanted to get and then a few more and my list and budget were thrown out the door.  By the time I got up to the cash register I had exceeded my budget by more than $30, rather than stick to the list and budget I didn't pay any attention to it I just whipped out the debit card and paid the bill.  With the cash in hand I will be more conscious of my purchase and stick to my budget.

The only downside to the cash envelopes for me is loosing those little things in my purse, after all they are often white and look like many other pieces of paper in a mom's purse.  I did some research about systems that have worked for other moms, some like to make their own cute envelopes out of scrap booking paper, others don't mind the white envelopes and others like cute envelope systems made like a wallet.  For me I need something that will be easily identified in my purse, durable to hold up to all the items that get shoved in by my children, and I wanted something not so blah.  I know, we are talking about saving money and spending wisely and I'm worried about fashion.  So I ruled out the scrap book paper envelopes worried they wouldn't be durable enough, the white envelope was definitely out too.  I found a lot of cute ideas, and then I made my final selection...

The Coupon Clutch!

It is the perfect size for my purse, has five interior pockets, five colored tabs to label the cash spending categories and it came in the perfect color to match my wallet and other accessories.

I'm excited to see how the cash method works for my family budget.  I know it will make checkbook balancing less stressful for my sweet hubby.

Send me a message if you need help picking a functional and fashionable item for your cash envelope.

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