In the New Year I love going back and looking at the budgeting techniques others are using. Envelope budgeting seems to be one of the most successful systems I come across. It takes some dedication and discipline, but I think the effort is well worth it for those in debt.

Just ask for separate cash amounts.

“I need $615 in cash but in 3 separate amounts: $220, 310, and $85.”

The teller will do the rest.

1. I have an interest-bearing checking account which has a high APY but requires a minimum number of debit transactions per month to qualify for interest;

2. I dislike the idea of carrying large amounts of cash on me, partially because I am likely to misplace it through forgetfulness, and partly because (rationally or irrationally, I’m a petite woman) I am concerned about theft.

So what I do instead is carry around “fake” envelopes to track my debit purchases. Every pay period, I print out several slips of paper prefilled with the spending category and start amount, and each time I use my card I record it on the appropriate category. In this way, I get the benefit of being conscious of my spending, without the risks of carrying cash.

I don’t know too much about Mvelopes, but it looks like its online. The great thing about the ‘cash’ system is that it is something tangible, its not electronic.

It definitely takes a lot of effort and time. That can be the most frustrating part. Especially making sure to pull the money out BEFORE you need it. However if it’s a priority, you’ll just do it. It drives me crazy sometimes, but it’s worth it to us to save the money, so I just suck it up, lol.

Here’s what I do that I think makes it easy for me. I type out our budget using EXCEL. Let me know if you want me to send you a blank budget. Once we get paid, EVERYTHING goes into our checking account. I keep track in a notebook our checking account ledger (this is kind of like a large check book transaction ledger). On our budget, it shows all of our bills/spending expenses(i.e. groceries, gas, dining, blow) for that paycheck (we budget bi-monthly).In our notebook, I deduct all of the bills that are AUTO-Withdrawals, even before they happen. This helps me make sure I have the money left that I am going to withdrawal for the ‘envelopes’. However, your budget should do the same thing.

As for the cash, In the left margin of our budget, once i print it out, I make 2 or 3 columns (20’s, 10’s, and 5’s). I then split up the money needed into those categories. I go to the bank with a list and get the denominations I need. It really doesn’t take that long. Let me know if i explained it badly. It’s a great system and saves a ton of money.

Good Luck and God Bless!