Well, I have had it. I am tired of my debt. I don’t have a lot of debt, thanks to my ever mindful, responsible, and thrifty spouse, but my debt remains. A friend said recently, “In order to eliminate debt, you must consistently spend less than you make”. Uh yeah, I got that part. Another well intentioned friend said, “You need to set up a monthly budget”. Yep, I do that too. Over the years I have slowly come to understand why I can plan the month and still over spend. One, plastic isn’t “real” money and two; I am in charge of 90% of our family’s discretionary spending. You know; groceries, clothing, birthday party gifts, haircuts, presents, etc. Now that my real problems have been identified, I have found a remedy. It is known as an Envelope Based System. How has the Envelope System helped? Let me count the ways!
1. It is so easy to put $50.00 on that little plastic debit card and really hard to break a $20.00. I don’t know why, it is just a fact of life. A study several years ago showed that people who used debit/credit cards spent at least 15% more than planned compared to those that used cash.
2. It helps you stick with the budget that has been set up. I determined that I could spend $200/wk and have plenty for gas, food and small incidentals like paper cups for a school party. That is $800/month. That leaves me $600 to put towards savings and debt. Before using the Envelope System, I was always sweating for the next paycheck because I had spent all $1,400.
3. Using the Envelope System has made me prioritize my spending, rather than wasting it on impulse purchases.
4. The Envelope System helps prevent dipping. I definitely have a more define perspective on where my money goes and what I will need in the near future.
Sounds perfect, right?! Almost. Paper envelopes wear out quickly, don’t fit in my purse well, coins fall out everywhere and they aren’t fun to look at! But I love my new Envelope System Wallet! It has 3 labeled envelopes, a quilted change purse, and a single pocket wallet. The envelopes can have any labels you choose including your favorite Bible verse or special saying. The zippered coin purse can also be used to hold plastic, like membership cards, emergency credit cards, and insurance cards. The wallet is large enough to hold a checkbook, deposit slips and coupons but small enough to fit in your purse.