Moving to Arizona wasn’t an easy decision, but it was the best decision we could have ever made for our family! We love California, but I am sure you donâ€™t need me to explain to you that you pay a high price to live there. We love the cost of living in Arizona, plus all that this beautiful state has to offer. Since living here we have already bought two houses and made a decent profit of the first one to pay off some of our debt. We are on a mission to be debt free (minus our mortgage) by 40! So in order to do that we need to tighten up the reins in some areas and focus on sticking to our budget!
We follow the Dave Ramsey method, well 80/20. We are working on the babysteps right now. Hubby pays all the bills and I am in charge of food, my gas, birthday presents, clothing for the kids, my beauty, house things, my eating out expenses and anything else I may want to save for. We do the zero budget method, where all of our money goes into a specific categories. We want to be the ones that are telling our money where to go and not the other way around.
I used to do the cash envelope system and failed miserably at it, because I would run out of cash and then just use the family debit card. MAJOR FAIL! To be honesty I have a really hard time to sticking to a budget (the 7 in me just says YOLO) and for the past 10 years my poor Hubby has had to juggle things around to make our lifestyle work. He is amazing and only want to provide for us. Well I am done with that! I am done having to shuffle around funds and I am done with having to work 15 jobs to make our lifestyle work. The Lord has provided for us in so many ways and I want to be great stewards of what he has given us so that we can GIVE MORE and leave a great LEGACY for our children.
So the first thing I am bringing back is the envelope system! I bought this cute wallet on Etsy from Heart of Harshey and itâ€™s perfect! It has eight zipper pockets for different categories, slots for my cards and another pocket for receipts. I know kind of silly to spend money on a wallet that is going to help me save, but I know I am going to use it! I also love to support mamas and their small businesses so it was a win win!
What Is the Envelope System?
With the envelope system you use cash for different categories of your budget, and you keep that cash tucked away in envelopes. I hated how my envelopes would get all wrinkled up and weathered. The awesome thing about having cash is you can see exactly how much money you have left in a budget category just by taking a quick peek in your envelope. How GREAT Â is that? I tried using a seperate debit card and it was way too easy for me to lose track of how much money I had.
How does it work?Â
Letâ€™s say youâ€™ve budgeted $500 a month for groceries. When you get your first paycheck of the month, take out $250 from your bank account and put the cash in an envelope. On that envelope, write out “Groceries.”
The nice thing about having a wallet that has all the envelopes right in it, is that you are most likely to leave an envelope at home and then get tempted to use cash from another envelope.
I buy a lot of my groceries online with Walmart pick up. It really helps me save cause then I see how much my bill is going to be before I click pay. Then if I need to put something back on the shelf, I just click delete. So how does this work with online purchases? Itâ€™s not always easy, but you can just put the money back in your bank (or I just give my hubby the cash) and then use your card for the purchases. I know that may be hard to go to the bank all the time, so maybe just leave the amount that you have budgeted for groceries or Amazon purchases.
My envelopes will be: Gas, Food, Beauty, Clothing, Eating Out, Savings, Birthday Gifts, Back to Bank.
Donâ€™t forget: When your money is gone, itâ€™s gone! If you want to go to the store but donâ€™t have enough money, raid the fridge for leftovers. Do a pantry challenge! Dig through your pantry to see what you can find to make dinner without having to hit the grocery store. This is a great way to really get intentional about your spending!
If you have money left in an envelope at the end of the month, congratulations! That means you stayed under budget!!! That is your â€œblow moneyâ€ to do whatever you want with it. For me that will go straight into my savings for our baby step #1 which is our $1,000 emergency fund or if there is something I have been wanting to purchase that would be the time to reward myself.
Every little bit helps!
Whatever you do don’t!
Donâ€™t borrow from other envelopes! I was bad at that and it landed us in a bad spot. Remember, envelopes are powerful weapons and can really help you stay in your budget. They can help you manage your money better than you ever have.
This is just one of the ways we are working on becoming debt free. I will be sharing more soon!
Question: Have you ever done the envelope system? What has been your biggest challenge?