ChefBeckyD
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janetupnorth said:I'll type up something more for you or find some info. explaining it.
People do their own varieties but basically you have food, gas, eating out (if you still do), household, BLOW (spending $), or other things you would use credit or debit for that you now will pay in cash. (Basically any non-monthly bill). You allot a certain amount to the envelopes and when it is used for the month, it is USED! No cheating and adding.
It does take a few months to get your amounts down right...
If you can save up so you can fill them at the beginning of the month that is ideal for me, but some people budget bi-weekly or weekly and fill them then.
The key is to use it to spend only what you have, not buy extra because you have a card in hand...you do spend less using cash! It's psychological...we've ingrained ourselves! If there is money left over at the end of the month, it goes toward your emergency fund or debt snowball.
I hope that helps, I'll find more.
Kathy's_Kitchen said:And again , Janet beat me . Her link is to what I copied....
janetupnorth said:Becky - I think it would work great for you! It will just enforce what you already do and add a tad more. Checks are still like debit cards. You know money is in the account so you may spend an extra couple bucks for something that you didn't really need but looked good.
Meal planning, which you do already also helps quite a bit...you aren't "creating" meals in your mind at the story and saying I need X,Y, and Z to make it. You've already created the plan and written down only what you don't have.
Also, creating meals to USE UP what is already in your house helps too.
ChefBeckyD said:Thanks for your help, too - Kathy w/ a "K"! (Isn't it funny - I always think of you that way in my head!)
ChefBeckyD said:That is my goal this week - to get the inventory done. We have SO MUCH FOOD in this house. Sometimes I re-buy stuff because I forgot we already had it!
I have a large upright freezer that is packed tight, plus the refrigerator/freezer, a pantry, a shelving unit in the basement by the upright freezer, and a couple of cupboards w/ food in them. I have 2 cupboards that are full of nothing but spices/herbs/baking products(like B.powder, soda, starch, choco chips, etc....) The only out of control spending I may have is groceries!
DebbieJ said:Becky, using the envelopes helped me reign in my grocery spending. That was my most out of control category as well.
Once you make your budget and fund your envelopes, then you'll know how much you can set aside for an emergency fund. Once our monthly budget is done, we transfer money to our emergency fund FIRST to stop us from going over budget in other areas and taking from the EF money.
We had friends over last night who started the envelopes this month and they really like it.
You don't have to buy DR's system. We use the free envelopes from the bank and keep them in a basket at home. When we go out, we take just the envelope we need. We own THREE of DR's envelope systems, but we find this easier for us.
DebbieJ said:I go to the teller once a month and write a check for cash. I have a note with how much I want of each denomination so i can fund my envelopes the way I want them. Then I ask for envelopes and they always give them to me.
When starting out, I would suggest you carry over the money from month to month as you figure out what a good dollar amount is for you. Then, as you get the hang of it, any "leftover" money goes to the emergency fun (or whatever your current babystep is). It took us a good three months to get our budget working.
jwpamp said:If there is money left over, and you have your $1000 emergency fund set, then put it towards your debt. Pay off the smallest debt first, and I always find extra money here and there for it -- change, cashing in cans for recycling, whatever.
We have paid off $6k in the last 2 1/2 months. Love, love, love this. We have a little way to go, but should be debt free in no time!
It's funny, though. I checked out a website the other day that said we could afford a $500,000 home with a $3500 house payment based on our income and debt.
WHAT????? Are you NUTS??????
I am so sure that this is how others got into such a mess -- it's crazy!
DebbieJ said:BS2 is all consumer debt, not just credit card debt. Student loans, cars, etc. It is basically everything except your mortgage. Depending on the size of your Home Equity, it might be part of BS2.
ChefBeckyD said:That's scary, isn't it? I just keep think how FREE we will be when we aren't tied to a mortgage & home equity payment every month!
We have some ministries we've always wanted to help with, but have never been able to - and we can start a retirement fund other than our 401K!
The envelope system is a budgeting method commonly used by followers of Dave Ramsey. It involves dividing your budget into different categories and using cash envelopes to physically allocate money for each category. This helps you visually see how much money you have left for each category and prevents overspending.
The categories used in the envelope system can vary from person to person, but some common categories include groceries, gas, entertainment, clothing, and miscellaneous expenses. It is important to customize the categories to fit your specific budget and spending habits.
You should disperse the money into the envelopes at the beginning of each month or pay period, after you have created your budget. This can be done by withdrawing the designated amount of cash for each category and placing it in the corresponding envelope. As you make purchases, you can use the cash from each envelope until it runs out.
The envelope system can help you stick to your budget and prevent overspending. It also forces you to be more mindful of your purchases and encourages you to prioritize your expenses. Additionally, using cash instead of cards can help you avoid accumulating credit card debt.
One potential drawback of the envelope system is that it may be inconvenient to carry around multiple envelopes of cash. It also requires discipline and commitment to stick to your budget and not dip into other envelopes. Additionally, it may not work for everyone, so it's important to find a budgeting method that works best for you.