Financial Wellness Tip #6: Learn The Envelope System

The Envelope System

Staying in budget can be SO hard, but now that you’re living a Zero Sum Lifestyle (every penny that comes in goes to something, even if that something is savings or investing), it’s incredibly important because a single penny overspent could mean bank fees and bounced checks!

Enter The Envelope System.

Twice each month, when we do our budget on payday, we allocate money to our envelopes.

In our family, we have the following categories:

Food: $250-$300/pay period: This is grocery store visits, but does not include Dining Out.

House: $100/month: These are “non-food” stuff. I’m talkin’ shampoo, toilet paper, paper towel… please don’t be eating any of that stuff 😉

Blow: $75/month for the Hubby and I, each: Starbucks. Manicures. Make-up. Drinks with Friends. Fantasy Football sign-ups. You don’t have to justify where this money goes! It’s a sanity saver.

School Supplies: $60/month: This happens to include the $50/month we spend on piano lessons. I’d use the extra it to buy things for our homeschool that our Charter School funds don’t cover, or that I need right away.

Gas: $225/pay period to be split between our cars: We usually don’t spend all of this, but with fluctuating gas prices in Northern California, I like to have the cushion.

Dining Out: $20/week for the Hubby: He gets $5 a day. Period. If he’s running low on funds for one reason or another (working OT so he has more meals to buy, or realizing it’s a 5 week month, or he has training and has no where to store or heat up leftovers), he gives me a heads up and I plan my menu around making sure I can send him with food.

Dave Ramsey sells his own Envelope System, but I’ve found a solution that’s a) cheaper, and b) more durable.

Get thee to Target’s Dollar Spot and find one of the small plastic coupon files! They are cheap but durable. I had mine for over two years before I upgraded to a SavvyCents wallet. I treated myself after we were debt free, because the envelopes are not just for getting out of debt. It’s a lifestyle.

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