Do you use the "Envelope System"?

I saw this on an old episode of Dragnet. Friday's partner was doing this as a way to save money. Can't say I blame him since cops supposedly did not make a lot of money back then.

Personally, the envelope system is not for me but then again, it may be worth a try. I usually write everything out with an estimate saved at the end of the week. If I break it, I make sure it's for a darn good reason.

 

This is an old system of saving money intended for "something". Because you will have to write what is the purpose of the money saved on that envelope, your target amount and target date. It is saving for something and not actually SAVING. I mean, it is like a future expense disguised as a savings.. LOL. I hope you get what I meant here.

My savings are in a bank account untouched. not intended for something that is immediate, but can be used during emergencies. Some of my savings are invested in the stock market long term.

 

I do not use the envelop system. The better way to save money is to actually take a a certain percentage of your income per month, and stash it away. For example, the moment you receive your salary, separate 30% of your salary and put it in a place that is a hassle to withdraw from. This will discourage you to get the money on any random time unless your need to get that money back.

 

An envelope has so many uses and it's not just for correspondence. When there's a need to give something personal to people.Envelope system is not for me but then again, it may be worth a try.

 

I tried the envelope system for a few months, but it just didn't work out for me. It felt like too much work just to save the same amount that I always do. Plus, it is especially difficult when you split bills 50/50.

 

Well I use a system that's very similar to the envelope system. However, instead of envelopes, I use old jars that I label with the things that I'm saving for, and that's where I put the money I save from doing chores, doing work, or the coins and bills I saved from my daily commute. It's and effective way of saving because you get to see your money grow which inspires to save more money for the things that you want. It got me to quit smoking so that I can put more money for my travelling needs.

 

I have considered using the envelope system for budgeting monthly babysitting, grocery, and gas costs, however, I have not used it. I see the simplicity of the method, in that once the money from the envelope is gone, you can no longer spend money on those purchases until the next month. I would probably be tempted to use a credit card when I ran out of money in an envelope from time to time.

I have a rough estimate in mind of what our family can budget for each of those categories per month, and I use receipt tracking apps such as Receipt Pal and Receipt Hog to keep track of my receipts after each purchase. It works fairly well, however, it requires me to be consistent in uploading my receipts regularly and making sure I do not go over my monthly budget.

 

I do not currently use the envelope system, but I just downloaded an app for my phone that will allow me to track expenses and income so that I can see where all of my money is going. I am excited to get started with it because it seems like it is going to help me out quite a bit. I have needed a system of keeping track of money for a while now, and this seems like a great solution. Once I know where my money is going, I can start making cuts where I need to.

 

I have not done this in the past, but am about to start - partially. We will leave money in our checking account for bills, but plan to begin using cash for local purchases. I'm hoping that will really help us stick to a new budget. I feel like it still follows the spirit of the system, since the bills aren't really something we have a say in, the way we can with groceries for example.

 

This is a great way to make sure you stick to your budget and at the end of the month you can take the money you did not use and apply it to something else, or put it away in savings. I have also started a savings envelope and keep it tucked away at home so I do not have access to it when I am out and about. It does not collect interest like a normal savings account, but when I have enough money in there and know that I will not need it for anything else, I may put it back into my savings account.

 

I'd never heard of this before, so had to Google it LOL I don't think it can do any harm, providing it's something people opt to do and it works for them. I personally don't use it, but I remember last year when money was especially tight; I would draw up my budget and then divide up some money that I kept in my spare purse in the house. I guess you could say it's a bit like the envelope system. As small a thing as it is, it did seem to help us keep a very firm grip of our finances, as we really had to keep a hawk's eye on spending.

Somehow seeing the money and physically holding it, seemed to drive home the fact that we needed to be extra careful. But as soon as things started picking up, we stopped it, even though we do still draw our budget, which we try to stick to as rigidly as we possibly can.