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Old 10-28-2010, 01:30 PM
 
367 posts, read 415,109 times
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Anyone use the envelope method of budgeting? My husband and I are going to try this. We have never budgeted in 10 years of marriage, and I am insisting that we try this. Any tips for us? Right now we are int he 1st stage of writing everything down that we spend $ on for the next month. Then comes the hard part - actually drawing up a budget. In some way, I think that part is harder than having to actually stick to the budget, LOL!
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Old 10-28-2010, 05:01 PM
RHB
 
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I did it when I first went out on my own. I didn't like it. I found a checkbook was an easier way for me to track my spending, it also gave me more flexablity than the envelopes did - ie putting $2 a pay day in the clothes envelope, I might have been better off purchasing, say, tuna fish on sale, then cut back the food budget when I needed an item of clothing.
The gas envelope did help me track my gas usage (this was before pay at the pump pumps)
I do know people who use it, and it works for them.
Good Luck.
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Old 10-28-2010, 06:47 PM
 
Location: MO->MI->CA->TX->MA
7,034 posts, read 14,474,847 times
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If you're disciplined enough to pay it off (almost) every month, use a credit card and take out maybe $100 cash a month. Credit card statements + paying it off every month = free accounting!
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Old 10-28-2010, 08:22 PM
 
Location: Tricity, PL
61,634 posts, read 86,981,866 times
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A great budget spreadsheet you can download here:
Car loans, auto financing tips, dealer scams to avoid go about 2/3 down the screen and download the excel sheet by clicking on the third spreadsheet. It is " self calculating". One the best and easiest to use I ever saw on Internet.
Hope you will enjoy it!
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Old 10-28-2010, 10:52 PM
 
Location: Tucson for awhile longer
8,869 posts, read 16,309,991 times
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My mother used this method her entire adult life and at 83 she has more money than anyone in my family. She also invested no money in the stock market but bought CDs (and still buys them).
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Old 10-29-2010, 03:01 AM
RHB
 
1,098 posts, read 2,149,895 times
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Quote:
Originally Posted by ragnarkar View Post
If you're disciplined enough to pay it off (almost) every month, use a credit card and take out maybe $100 cash a month. Credit card statements + paying it off every month = free accounting!
You have that "almost" clause in there, it's usually that one that gets people in trouble...if you use the check books, you get the same record of spending as you would with the cc statement without the risk.
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Old 10-29-2010, 05:25 AM
 
Location: Virginia
1,938 posts, read 7,122,506 times
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I do, but actually I use baggies because they don't look so suspicious in the freezer. Having that much cash laying around scares me if my home were ever to be robbed- anything is possible and I am hoping no one cared to steal anything out of the freezer- but I could be wrong.
Anyhow, what we did when starting out is write down our bills that are consistent- ins, credit, car loans, stud loans, etc. Then, we take our bills that fluctuate and look back to the highest amount and use that amount. After all that is done, we leave all of that money in the account. I then took out in cash grocery and gas money. I know how much it takes to fill the car up and I guessed how many times and ideally how many times I should fill up and took only that amount out in cash. Then the same with groceries- after creating a menu and learned to create menus off of specials at the store. I put the two amount of cash in baggies in freezer and put a little bit in my wallet in seperate compartments- gas and groceries. If I ran out of cash I would note how much I would pull out of the account and relook at WHY? If there was extra money in the account afterwards, it went towards the snowball of paying off debt- smallest credit card first.
Hope it helps but if not, don't share the freezer idea- let's keep that a secret
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Old 10-29-2010, 03:06 PM
 
Location: The Pizzle, FLorida and Poconos in Pa
362 posts, read 392,085 times
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Quote:
Originally Posted by ragnarkar View Post
If you're disciplined enough to pay it off (almost) every month, use a credit card and take out maybe $100 cash a month. Credit card statements + paying it off every month = free accounting!
That's what I use. It also helps me identify areas I'm overspending in. Plus I get one point back in cash on everything. They can be saved to your computer with online billing. You can look back at how far you've come in budgeting etc. Plus the benefits of being able to contest erroneous billing or defective products and work.
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Old 10-31-2010, 09:59 PM
 
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Ah yes, the Dave Ramsey approach.

It's good if one needs to be very strict in setting up and sticking to a budget.

I don't use that method, but I'm very disciplined anyway. I pay myself first by contributing to my 401K AND have a certain amount taken out and put into my savings account each paycheck. I don't touch the investments or savings. Then the rest is used to live on. So instead of waiting till the end to figure out what's leftover for savings, I start by deciding how much I want to save (being realistic) and then after that comes house, utilities, insurance, etc. So I know that each month I will be putting $$$ into savings.

I have a budget where I can see the breakout and I use it as a guide and adjust yearly. I've cut out certain expenses along the way (cable TV, monthly cell plan).

I use my Discover card all the time (get cash back on purchases) but I pay it off in full each month. The trick is to make a decision that you will not pay interest and then never charge more than you can pay off each month. I think things cost enough as it is--why would I want to pay more (in the way of interest charges)?
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Old 10-31-2010, 10:10 PM
 
18,042 posts, read 15,634,356 times
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Oh and having an 'emergency' fund is crucial. I suggest that people save $3,000 minimum and optimally save $5,000. And that money is only to be used for true emergencies. Things like:

- you suddenly need a root canal

- your car needs an unexpected repair

- someone is sick or died and you need to travel to see them or get to the funeral.

- your beloved pet gets sick and needs tests and/or surgery.

- the hot water heater broke and needs replaced.

Things like that. When you dip into your emergency fund then you save $$$ to get that amount back up to the minimum. That way, hopefully, you never get caught charging more than you can pay off in one month because you have enough in your emergency fund to cover life's little (and big) emergencies.
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