Thursday, March 5, 2009

The Envelope System

I read Dave Ramsey's book The Total Money Makeover a little over a year ago. Hubby and I were wanting to get on a good budget system and get a savings account started. For any of you trying to get your finances in order I highly recommend this book. Even if you don't like his way of doing things, I think it is a great motivational tool.

I really like his ideas and we have implemented most of them. We have paid off almost all of our debt and we have a good savings account started. The other thing we have done is gone to the all cash system. We did this for a few months last year and it worked pretty well. Then we slacked off around the holidays and started using our debit cards again. It is amazing how much more we spend when we just use our debit. Without really "seeing" what goes out, it makes it alot easier to spend. So, we have gone back to the cash system. I really wanted to purchase something along the lines of the Dave Ramsey wallet, but I couldn't justify spending the money so I am using this.

My old coupon organizer! I figured it wasn't getting any use anymore since I upgraded to the binder. It works perfect and fits in my purse nicely. I used to use white envelopes for each category which worked well too.

I have 8 categories. Grocery, Haircuts, Birthday/Holiday, Entertainment, Clothes, Kids Allowance, House Maint., and Garage Sale. Once all the money is gone out of the envelope for the month, it's gone. No more spending.

The last couple months I have been way over budget in a few areas. Hopefully by started this system again it will get us back on track with our spending.

You can read more about Dave Ramsey's envelope system here on his website.


  1. I really like this idea!! I am going to post a link to this on my provident living blog!!! I hope you don't mind. I really like your approach to being frugal. It is down to earth and really easy. Thanks for all of your wonderful ideas!

  2. We took Financial Peace University and it has been amazing! We had an on-again off-again relationship with the envelope system until we took the class. It's been over a year and we're still loving it. It has been a great way for us to not over-spend...and sometimes not to spend at all.

    You go, girl! Keep up the good work!!

  3. What an amazing idea! Thanks!

  4. Hello from another Dave Ramsey fan! I've been doing FPU since August and my debt snowball is rolling toward the last credit card bill! I'm in Iowa too so your grocery ads should help me out

  5. Yes, I have heard of this system...once the money is gone that's it....! Our young adult children need to adopt this idea.

  6. i am a HUGE dave ramsey fan. my hubby and i discovered him only a few months ago, but we are hooked on his plan to being debt free! actually, his plan is how i came across your site. i search for frugal living blogs, and yours is my favorite. :) thank you!!! and we are using the envelope system, too... anyone who isn't using it and once to cut down spending, CHECK IT OUT!!!!

  7. I used the envelop system for ages - it is great! It really helps to actually see the money, and see it disappear as well.