Last week, I introduced my love-hate (mostly love, nowadays) relationship with the Envelope System. It was a begrudged start that I fought off as long as I could, but now, my only regret is that we didn't start it with day 1 of our marriage!
For those who aren't familiar, here is a rough-n-dirty explanation of what the Envelope System actually is:
- Each month, you put actual cash (remember that stuff? It's green and paper-y) into numerous envelopes that are labeled with a purpose.
-The cash inside the envelope can ONLY be spent on that purpose.
-If there is no expense for the month within that category, the money stays in the envelope and accumulates with next month's addition.
-On the other hand, if you spend it dry, it's gone until the following month.
If you are still reading this post, my guess is that you are at least curious about the concept, or are maybe even open to the idea of using envelopes. I'd like to try to convince you why I think you should take the plunge by arguing some of the best anti-envelope claims.
Argument #1- I don't want to have all those restrictions! I want to enjoy my life!
--> YOU determine the restrictions. You look at your income vs. your bills and decide exactly how much money goes to each category. If you love to shop and want to spend $100 per month on clothes, so be it! That just means a little less is going to go to the other envelopes. It all depends on YOUR decisions for where your money goes. As long as everything is covered that needs to be covered, the choice is truly yours! Envelopes actually free you. You KNOW things are covered when the time comes to buy them. You don't have to scramble and hope you can afford them! In my house, more money goes into our "Vacation" envelope than does our "Grocery" envelope. Remember this? Well, putting more money in our vacay envelope than our grocery envelope is a combo of that love and this. =)
Argument #2- I don't know how much money to put into each envelope or what envelopes I even need!
--> We will talk through the details of "getting started" next week. It'll take a solid afternoon of prep work, but then, it's smooth sailing. I'll take you step-by-step through how we got started with our envelopes and give you practical advice to help you understand just how much you need to pay into each envelope each month.
Argument #3- I do NOT want to go into the gas station every single week to pay cash for my gas. Headache!
--> This will be covered more next week, but there are still things that we use our card for. They are just much fewer in number than they used to be. I would never ask you (or require myself!) to go inside and pay for gas every time. You're right! Headache!
Argument #4- I don't want to have to tell my friends I can't hang out because I just spent my last dollar in my envelope. I'm not an 8 year old with an allowance!
--> No, you're not. But you could be a 35 year old living at home with your parents if you don't learn to manage your money well! So, my advice is to look at your month when it starts. Knowing how much money you have for eating out, entertainment, etc, decide which weekends you will use it. If your friends ask to hang out on a certain weekend where you know you'll be strapped for cash, recommend another weekend or ask if you can hang out at a certain venue you know you can afford. You initiate the invites and dictate where the action takes place, and then things are much more within your control. And if you find that you are constantly restricted by your envelope, you may need to adjust amounts. Again, YOU make the rules and determine the amounts! No one is holding them over your head.
Argument #5- That seems annoying to have to actually GO into the bank and get cash out every month. I don't have time for that.
--> I say this when it comes to exercise too... You have the same 24 hours in your day that everyone else has. You make time for the things that matter to you. Look at what you spend your time doing. You can't deny that those are the things that matter to you, or else you wouldn't occupy yourself with them. So decide to make your financial health matter to you and get to the bank once a month! It'll take 10 minutes, people! Financial responsibility requires some dedication and maturity. And it starts with being willing to walk into a bank like we used to in the old days. =)
Argument #6- I don't want to use cash because I use and pay off my credit card each month. I get points/rewards for my purchases and I love that!
--> If you are able to keep your finances 100% in check and not have money slipping through your fingers with that system, then more power to you! I'm not saying everyone MUST do the envelope system, or else you don't care about stewarding your money well. I'm asking that everyone consider it. Handing some one cold, hard cash is so much more difficult and meaningful than swiping a card and "giving" them this imaginary-feeling money. It doesn't leave an impression at all. You can easily spend without even thinking about it. You think twice...or even three times...when you hand someone your hard-earned cash. That's the benefit. But if your "cushion" isn't dwindling slowly (like I talked about last week) and you are fine with your system, no need to change.
Do you have any other arguments you'd like to discuss? Again, this isn't a must-do or else you don't love the Lord with your money. This is just a great tool to consider if you start to see your bank account dwindling a little bit each month. Stop the bleeding and start the enveloping! =)