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Sunday, February 17, 2013

Why we use a cash envelope system (and a fun God story)

Awhile back, I posted about making these cute budget envelopes and shared that use a primarily cash system around our place.  budget envelopes Someone asked if I would share why we use such a system.  This post is an answer to that.  :)
When I was pregnant with Owen, we decided to take Financial Peace University at our church.  I cannot say enough good things about Dave Ramsey’s class.  Seriously, if you want to get your finances under control, take this class (WITH your spouse if you have one) and do the homework!  Ok, enough of a plug.  We wanted to get a better handle on our budget and where our money was going.  We followed the principles closely, but only used envelopes for a few areas and just tracked things in our excel document.  But this last year, we really needed to overhaul our budget and get our spending back on track.  There had been too much swiping the card even though it might not have “been in the budget.”  So here’s what we did:
  1. Budget each paycheck.  We sat down and had several “family meetings.”  Yes, they were painful.  But very necessary.  We budgeted every penny that was coming into the house. 
  2. Decide on your categories and amounts.  Since we had been keeping track of most things in excel, we had a general idea of what we were spending in most areas.  We decided which things would be paid via automatic payments.  We also decided to keep using our debit card for gas, since I didn’t want to have to run into the building with kids to pay.  Everything else was turned into a envelope category.  (Ours are currently: babysitting, adult clothing, emergency, Emily spending, gifts, going out, groceries/toiletries, hair cuts, home, kids clothing, kids expenses, postage, William spending).  
  3. Fill Them Up! After you've decided all your categories and get a paycheck, fill each envelope with the money allotted for it in your budget. Since William gets paid twice a month, we also decided how much would go in at each paycheck.  For a few of our categories, all the money goes in at the beginning of the month (spending), but some other categories, we put half in each time (groceries).IMG_9117
  4. When it's gone, it's gone. Now you can spend your money. :)  The one thing that I really love about a budget is that I don’t feel guilty about spending the money.  Before the cash system, I was never really sure when I swiped if we had the money for said item.  But now, if I want to buy a cute dress for Ellie and the money is there, I can get it and not feel bad.  Same with my crafting supplies or some new fancy frozen Greek yogurt.  But when the money is gone, it’s gone.  No going to the ATM or pulling money from a different envelope. 
  5. Give it time. We’re still tweaking this as we go each month.   Getting the money right for each category will take a couple of months of trial and error.  But we’ve already started to see extra money in our bank account each month!  Yay!   We can now put that money towards something we are saving up for, like our future fence or basement finishing!
And if you’ve made it this far, I’ve got a fun story for you from yesterday.  I went to Aldi and then Wal-Mart to get all our groceries for the week.  I lost my debit card last week and I only brought our grocery envelope with me.  I was already humbled that I had to use 3 of WIC coupons.  But I must have miscalculated what I had put in my cart, because I was about $25 over what I had with me.  I apologized profusely and then started to pull a few things out of bags to give back.  There were a few things that I didn’t really need.  The cashier took off the items and I was still hunting through my purse for about $4.  All of sudden, the lady behind me handed the cashier a $10 bill.  I said I would just find a little more to take off, but she insisted.  I thanked her and finished up my transaction.  But as I was walking away, she said “ma'am, please wait.”  And then she bought all the items I had given back.  And dang, I’m crying again as I write this.  She bought them, and handed to me quickly.  She gave me a hug as I started crying and saying thank you. 

I cried the whole way out of the store, cried putting my groceries in the car, cried driving home, and cried telling the story to William.  We have had times in our life when we were on her side of things.  But now I am humbled and grateful that I was the receiving end.  God cared about the little things I had wanted to get.  I’ve just prayed God would abundantly bless that sweet lady for doing what she did yesterday.  I also pray my humbled spirit will remember this long after I'm (someday) done being on this side of needing the help.


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  2. Very touching, Emily! Blessings to you and to that lovely lady. Kisses from Madrid :D


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