I’ve been using the envelope system since February, and every month is a new fight. Generally, by the end of the month, I have decided to “remember” that the purchase I made at Target used cash from the clothing and household envelopes, but also contained items that fall under the pet care, grocery, and gift categories. I’ve lost the receipt so I can’t remind myself of what I bought, can’t read the abbreviations on the receipt, have forgotten how much I took out of which envelopes, and/or have tried to re-organize the envelopes, but did it wrong because I was distracted and can’t figure out how to get back to square one.
This seems much too complicated for a system that works by putting money in envelopes, spending it, and stopping when it’s gone.
But, this month, I have a new plan. Here’s how I plan to combat Envelope Stupidity System.
- Keep the envelopes with me at all times–no “I’ll just remember I put this on the card” for me. This will be much easier now that I have a wallet with envelopes cut to size and labeled with cute stickers.
- Plan ahead. This means meal planning and making grocery lists. This means planning meals that I will have time to make and eat on the nights I plan to eat them. This means planning dates that are free or cheap (which takes more planning than, “Let’s go to Olive Garden.”)
- Divide my cash into very specific categories. This month, instead of one envelope for groceries, I have three. One is labeled “Stock Up” for things I want to buy in bulk when they’re on sale. The second is labeled “Church” for when I need to take food to church. The third is labeled “Groceries” which I will use for food items I need that week. I plan to take out 1/4 of my monthly grocery allowance every Saturday and make my weekly purchases with that money.
- Ask cashiers to ring up my items separately. Often, when I’m shopping with Dexter, I’ll give him one envelope and send him to another checkout line with a few items so my envelopes stay pure. However, sometimes I’ll be by myself or have more than two categories I’m buying in. I’ve asked several cashiers to do this for me this weekend, and they’ve all been really nice about it. I always feel like a jerk for creating more work, but I think it will be worth it when I can easily figure out how much money we have left at the end of the month.
- Say no. Last year, my students were constantly asking me if I had change for the vending machines. The poor little creatures were hungry, so I dug through my envelopes pulling out ones helter skelter, making one of my very helpful “mental notes” about which envelopes that $5 bill needed to be split into. This year, I’ll be Mrs. Mean-Teacher. If I don’t have all the ones in one envelope, no change for the kiddos. It also helps that they’re turning off the vending machines until after school this year.
- Update Quicken at least every three days. This way, whenever I take out cash, I’ll be assigning it a category in Quicken soon enough that I won’t forget which envelope I put the money in. It’ll also keep me up-to-date on assigning categories in Quicken for items we don’t use cash for–like gas, dog food, and bills.
I don’t know that things will run perfectly in the envelope department this month, but it can’t hurt to identify specific problems and work out solutions. One thing I still need to work out is how to give Dexter some grocery money for any, “Can you pick this up on the way home from work?” trips to the store. He carries a minimalistic wallet like this which makes it hard for him to divide his money–and if does get divided, there’s very little chance he’ll remember where he put what money.
How do you keep your budget straight? Do you use cash and envelopes? A debit card and Quicken? Are you a religious receipt keeper? I’d love to hear any tips you have to help us keep on track!