Envelope System

This is my first month really on a budget. I've had my estimates before and used mint, but I always had the idea that if I spend less in category X then I can spend more in category Y.

I started my envelope system by figuring out what I wanted to spend on all my expenses. I deducted my savings and automatically withdrawn payments right away. Then I took out the amount of money in cash that I would be spending on gas, groceries, food, alcohol, my vacation, and miscellaneous.

This month has taught me some good things about the system, what I need to improve, and how it could work well for me.

You have to be organized for this system to work. It can be a file folder or real envelopes, but you have to be diligent to keep it all in order.

I'm less inclined to blow all of my cash now that it has designations, but I have trouble when someone asks me to make change for them (because they see my wad of cash.) I need to let people know why I'm keeping track of everything.

To keep better records, I need to make better note of what I start with. I've moved a couple dollars around since this is the first month, so I know my records won't be the most accurate.

Give yourself some “fun money.”  I've never done this before. I would put it into my miscellaneous category instead. I've tried to get my store credit card under control and having a little fun cash on hand will be a good way to keep from adding to the debt.

Overall, I will do this again next month and see what needs some tweaking. I want to put my saved cash into my good old piggy bank. I'll think of something special to put it towards. Maybe even something other than debt if I get crazy.