Sunday, May 1, 2011
Saving Money: The Envelope System check-in
It was ten months ago that I told you how I started incorporating Dave Ramsey's envelope system into our household. I must say that for most things, this system worked quite well, but for others, it did not. Unfortunately, I found myself dipping into other envelopes to pay for things when I ran out- for example, if I needed and extra $10 for groceries, I was taking from the house envelope or fun money envelope. I also found that I needed more envelopes than what I started with. I also had to adjust how much was going into each envelope.
I am also not gong to lie and say that this system is easy and works right away- it does take some getting used to. It is also really hard, especially for someone like me who used to get whatever I wanted right when I wanted it. I have to try to resist the temptation to buy things I "want" and don't "need." That is especially true now that we have Rowan and I want to buy her everything! (She's not spoiled or anything). :) I also have some friends who just can't do it. I have explained it to them and they admit they just don't have the self-discipline to do it.
So, I want to give you an update on how it's working for us. These are my categories and what each pays for.
1) Monthly Bills: Electric/Water/Sewer, Gas, Cell Phones, Cable, Garbage, Car Payment, House Payment, Student Loan
2) Groceries: this includes personal care too
3) House: furnace filters and other miscellaneous items
4) Pets: dog food, cat food, cat litter, pet visits, groomer visits
5) Medicine: for my two prescriptions each month
6) Birthdays: for family presents/cards
7) Fun: for movies, dinner, or movie rentals
8) Personal allowance: we each get our own allowance for two weeks
9) Rowan: for her formula, food, clothing, and toys
and our two new categories:
We also have two direct deposits- one for Christmas money and one for Rowan's savings. I don't count those as envelopes since they come directly out of our paychecks, so I don't "see" the money. I also want to do that soon for Rowan's college savings. The leftover money that does not go into the envelopes goes into savings, which we use to save (obviously) or for larger purchases. I hope I won't have to make any further additions, but if I need to, I will have to adjust where the money currently goes since I don't want to use more money.
Hopefully with these adjustments and additions things will go more smoothly!