May 242012

As I mentioned in my Envelope Budgeting post, we’re on a quest to make another step forward in our finances.

We have been having success with our efforts to reduce waste, reduce our utility bills, reduce our automobile costs (including gas), and so forth. But we haven’t actually made

A Budget

Well thanks to the Mvelopes free account (mentioned in the post above), we’re hard at work making that a reality. We’re setting up digital envelopes for all our financial categories, to track every penny and keep ourselves in line.

And do you know what else I did last week?

When I (well, the kids and I, of course) went shopping on Thursday (Farmer’s Market day, so we schedule around that), I went to the bank as usual. But instead of getting out just what cash I needed for the Farmer’s Market (for our milk, eggs, and produce), I withdrew the entire two-week grocery budget.

Since Wolf gets paid every other week, I am running budgeting on two week cycles.

Not everything has a physical cash envelope, but groceries seemed an obvious place to start.

And it does feel different, shopping with cash. I’m more reluctant to part with each bill. And knowing how much is left in that envelope is a “hard stop” – unlike the debit card, where there’s such an ease of “well it’s just a little bit…”

What else is really better with a cash envelope over a digital one?

Image from NoThirst, a website I know nothing else about.

  3 Responses to “Budgeting: A New Beginning”

  1. I wouldn’t mind using cash for groceries but since we are a pump your own gas state a debit card really speeds the progress up.

  2. The most commonly used one in my house is the food. I also have one for entertainment, appearance (haircuts, clothes, shoes, makeup, etc.) and chores (small bills and lots of coins for on the spot payments). The kids have chore sheets. They have to take care of their room for free, but they get paid a little bit (25 cents to $1.50 depending on the job) for each job. They tithe 10%, then save 10% and can spend the rest on themselves, save for Christmas and birthday gifts for family and friend parties. Clara’s trying to save for an iPad or something like that. I figure since God expects me to teach my children, they’re learning valuable math and money skills as well as learning how to clean a house, do laundry, cook, etc.

    Just like you realized how much easier a debit card is to use, a credit card hurts even less. Cash hurts a lot more, and there’s a definite end to it. The food envelope (which in our house also includes paper and cleaning products since I get them at the grocery store) includes cash to go out to eat (which sucks up the cash really quickly) and groceries. When the cash is gone, I have to eat out of the pantry. It’s also easy for me to spend money on clothes because they’re a great deal (usually season end clearance to stock up for next year) and Jim has trouble not buying movies, games and other fun stuff. Those two envelopes keep us in check.

    Clara just announced that she really wants to have envelopes, too. One for cake decorating supplies, one for electronics (music and the i-thing), food, clothes, bank savings, church tithe and I can’t remember the rest, but she has 7 or 8 in mind.

    Another tip is to just keep a $20 or a $50 in your wallet that you can use for an emergency. Once in a while it is used temporarily when I forget an envelope, but only if I know there’s cash to exchange later.

    Good luck with your envelopes. I love them! I need the extra visual accountability and a more definite stopping point. They’ve done wonders for my marriage and our finances.

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