Envelope System - 1 Month In

Today is payday, so I thought I'd better report on how things are with the envelope system.

In short, I LOVE it!  It's so nice to know clearly where we are financially at any given point in time.

How my children have viewed money in the past.

The kids, on the other hand, hate it.  Would it be heartless and cruel of me to say that I'm glad.  It's a relief to see that this is a bit of a struggle for them.  That they can't go into any given store at any given time and get any given item is nice.

These are hard financial times for everyone--some to more degree than another.  Learning to be wise with a buck is certainly not a bad skill to learn at any age, but in my opinion, the younger the better.  It's okay to struggle.

I guess, for us, this is a preemptive strike.  This is our chance to get things under control before we get taken under by the wave of financial disaster that's taking so many in it's course.

So, here's how it went down last month....
From my personal finance class, I learned about mint.com.  I went there and set everything up and created a budget.  Then I figured out which things were going to remain in the account and be paid via billpay and checks and which would be withdrawn as cash to have on hand.  I then figured out how much cash I would need and how many of which denominations I would need.  I wrote it all down, so I could simply present it to the teller the next day.

On payday, I went and bought three little filing thingies.  They're like very tiny filing boxes.  Someone told me to get one of those coupon organizers, but when I needed them, I couldn't find them.  Such is life sometimes, huh?  So, of the three, one is for me, one is for the Warden, and one is for money that will be used later but needs to be saved over time.  Knowing myself as I do, if I were to leave this money in the account, I would find some way to rationalize it being spent; thus the reason for withdrawing it and putting it aside.  I filled out the tabs and went to the bank. 

I gave the teller the list of the cash I needed.  I took the cash to the car and divided it into the boxes.  Right then and there, I drove to the Warden's place of employment and handed him his portion--I gave him gas money, a portion of the grocery money (he'll sometimes stop at a store for us on his way home), and some other money for spending on things he needs.

The only glitch we had was because of my poor memory.  Seriously, it's SO BAD!  I went on billpay early last month and set it up so I'd be on top of things.  When I set up the budget, I didn't remember doing that, so I set them up again.  By the time I figured out my error, the first payment had already gone out and the second one had just left the bank, so I couldn't recall them.  I had to take the money from savings, which was a bummer, but at least we had it there to take care of it.

So, we start out this month with many of our bills prepaid.  Not a bad situation to be in, but one of the goals with this way of doing things is to have spending be as consistent as possible each month.  Along these lines, I contacted those companies that we pay every other month, quarterly, and yearly and asked if I could send them partial payments monthly to even things out.  There was only one company that refused--that was our life insurance company that we pay yearly, so I'm holding that money in a different account to build up over the year.

There you go, that's the long and short of the envelope system so far.  Yes, the kids hate it, but in so many ways, I don't think that's a bad thing.