Over the years my husband and I have tried different methods for tracking our finances. Some people like Dave Ramsey encourage having a budget. You can use a paper budget, or you can use a digital version such as Dave’s free app. https://www.ramseysolutions.com/ramseyplus/everydollar
This kind of system works for many people and one of the things to better keep track of your families spending is to use plan old cash.
Now while I know that there are times its more convenient to use a debit card or even a credit card, using an envelope system can help you keep on track with spending.
Why should you choose cash instead of your debit card
-When you use cash it is a lot harder to spend mindlessly.
-You tend to be more aware of what you are spending your money on.
-It can help you stay within budget because once the cash is gone, you can’t spend anymore, which is and still stay on budget for that category.
-Some people find it helpful to only use cash for certain budgeted items. For example, they may only use cash for groceries and not dining out. Yet, if you fund your envelope for entertainment or eating out, you will be prepared not to overspend in that area as well. Going out to eat can blow your weekly or monthly budget quickly.
For my family every two weeks, my husband goes to the bank and pulls out cash for tithes, offerings, groceries, and gas. These envelopes are always funded. Then we see what is left and what bills need to be paid.
Having this amount budgeting and pulled out in cash each pay period lets us know how much money we are spending on these categories.
With the gas prices the way they are right now and also food climbing, we have had to adjust our food and gas budget accordingly.
Since we pull out the same amount for each check, we have a budgeted amount to put in our cash envelope and we don’t have to worry about food and gas money being spent by just sitting in our bank account.
If you aren’t careful you can overspend by leaving if it is left in your main bank account. You look at your bank app and it shows you have the funds in there. So you decide to buy that new top or shoes you wanted, and the next thing to know you have spent into your grocery money.
Speaking of shoes makes me think about another cash envelope. Clothing is another category that is good to add to your cash envelope. Beings that our kids are homeschooled, we don’t have to purchase school clothes for going back to school.
Though our church does a summer family camp for the whole family. That is when I go through and figure out which child has outgrown their clothes or needs new shoes, socks, etc.
I just purged a trash bag of clothes the other day and discovered that one son needed new jeans. If you have money saved up in your cash envelope, then you don’t have to worry about overspending or going to Murphy. Yet, if that is an envelope that isn’t funded and you need something in this area right away then you may have to go to Mr. Credit Card to cover this expense. I am speaking from experience for myself.
What is the best way to get started with your cash envelopes
The best way to get started is do your research. If you go online and search for cash envelopes, you will find a ton of different ways to make or purchase them. You can even use items around your house to make them.
However, The way I started is just by taking an envelope and labeling it with the budgeted item. We decided what we wanted to save for or fund in our cash envelopes and then we labeled them.
Planning out your budget on paper just to give you an idea of what is going out each month will give you an idea to preparing your envelops.
When I began my journey by using the envelope system. I purchased a shoe organizer for the door and put my envelopes in there.
That way I could always see what was in there and it was easily accessible.
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For example, I put groceries, clothes, haircuts, etc. in envelopes, labeled the envelopes and put them in the shoe organizer.
Once you have spent the cash in that envelope, you are done spending for that budgeted item until the next time you get paid.
You may be thinking this is old school, and it very well could be.
But what I have found is when we use cash, we are less likely to overspend.
When you carry around a wad of cash it also makes you more aware of what you are spending your money on.
Plus it’s a great way to budget and save money.
After, using the shoe organizer for a long time. I incorporated a cash envelope notebook for expenses such as bills.
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If I didn’t have enough money to pay a bill all at once. I would save cash in the envelope. That way when my husband received another check, I could pay the bill then. Having money already funded in the envelope kept me from having to come up with all of the money for that bill from the next paycheck.
Just little things like that can help you save money and have it to be less strain when it comes to paying your monthly bills, and not overspending on your budget.
I really enjoyed having my cash envelopes. I enjoyed having my bill money in my little pink notebook that I called Muse Bank. Though when I went to the store, I would have to go through different paper envelopes for each purchase I wanted to make.
If I was purchasing food, I would get in that envelope. If I wanted to buy toiletries, waters, pet supplies, clothes etc. It got kind of tricky trying to go through my different envelopes to make purchases while standing in line with people perhaps behind me.
I can tell you what really helped me with that. I purchased a wallet with multiple slots and labels. That has been such a big help for me to make my cash purchases.
Plus, it gives you a good feeling to look in your wallet and know you really have the money to buy what you are trying to get.
Why You Should Have Multiple Bank Accounts:
-It can help you to better keep track of your finances if you have multiple bank accounts. I learned along time ago about have multiple bank accounts.
This has helped my family with our finances greatly.
Have you ever wrote a check and it took forever for the person or company to cash it?
If you aren’t watching your account closely, you can forget about that check and can be overdrawn. Or if you have what I just had happen to me, a channel app renews for the year and you aren’t expecting it. Now you have you account all messed up and you are scrambling to get money back into that account.
I know maybe you guys stay on top of your bank accounts better than we do sometimes. After all, my husband is a ministry but works full time as a Tax Accountant. Do you know what they say? The plumber doesn’t do his plumbing and a builder isn’t doing his own building.
Well in all fairness my husband does a good job at helping me keep up with everything. Yet sometimes things can sneak past you. That is why having multiple accounts has worked great for us.
-You can use one account for your budgeted categories and another account for your savings.
Like I said we have multiple accounts, I mean multiple. I know it may seem excessive, but we have a savings account because we must. We are part of a credit union, so it’s required. Then I have online savings for my emergency fund because it pays higher in interest.
I have my main account that my husband’s check is deposited into. I disperse it into the right account for what the funds are being used for. We have a tithe account and a housing account which I pay my mortgage out of. I have an account for things that come out by automatic debit. So, when we have a monthly bill that is debited each month. All we must do is fund that account and then I consider the bill paid. I also use this account for Amazon or ordering things. That way the money is put into that account, and I won’t overspend my main account. We have an account we call credit. This account covers just what it says. Anyway, credit cards or my husband’s student loans. I have an account for school to cover my children’s curriculums. Then I have what I call online or digital envelopes.
House and car repair
Ministry Travel Expenses
An account for any reoccurring bills such as tags, insurance, pets’ control that comes out quarterly etc.
Then I have accounts with Capital One. They have accounts they call 360 accounts. I have several of them. These accounts are savings accounts though. I use these for sinking funds.
College funds
Kids savings account
Christmas
Vacation etc.
Sometimes it gets easy to forget that some of these categories need funding. With me having these accounts they kind of remind me easier. That way they aren’t out of sight and out of mind.
In conclusion, I really think having a cash envelope system and using multiple bank accounts has helped our family stay within budget.
I hope this has helped give you some ideas about helping you to stay within budget or why you should start using a cash envelope system today.
Please feel free to comment below with any questions or suggestions. I would love to hear from you!
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