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Cash Envelopes - Who Does It? YNAB - Who Does It?

November 15th, 2018 at 08:38 am


Today is my birthday. I'm taking it as an opportunity to look forward and make serious progress in our lives towards simplicity and responsibility.

I've spent (wasted) time on-line looking at budgeting stuff. I'd like to have and adhere to a spending plan. I'd like to ideally do it in cash. With envelopes. Does anyone here do a cash envelope system? My biggest challenge is handling the variables. I'd like to ideally have separate funds for groceries/gas/miscellany/other.

I'm upping the weekly spending to $250/week, broken down as follows:
Consumables - $100
Gas - $62.50
Miscellany - $62.50
Other - $25.00

I've been very unsuccessful at trying to break down budget categories that are narrow and include things like clothing/gifts/entertainment/etc. Perhaps I will graduate to this eventually. I am longer a recreational shopper.

I've also looked into using the YNAB software program. I will be one month ahead starting 1/1/2019. We don't use credit cards. We are paying down medical debt. We don't have many outside savings accounts.

I've spent too much time watching tutorials on youtube and IG, especially TBM (The Budget Mom who has elaborate budgeting/booking keeping practices) and Six Figures Under (who I enjoy reading her blog, but the YNAB video intimdated me).

So what works for you and what doesn't? I'm reinventing myself and money practices so I am game for any and all suggestions.

Also, in January we will be putting 10% in the 401K, we will be taking a family vacation in January or March (currently have $4,000 earmarked for that), and have increased our HSA funding from $1,000 to $1,750. I will be bringing in $300/week part-time, we will also pay cash for our daughter's semester at community college and continue to cashflow home improvements.

11 Responses to “Cash Envelopes - Who Does It? YNAB - Who Does It?”

  1. creditcardfree Says:

    We use YNAB, yet technically it doesn't look like I budget one month ahead. We have extra cash in our checking account which works as a buffer, but it isn't specifically for the month ahead...although it could be if needed. So today for example, I put in my husband's paycheck, which showed as available to budget for November. I simply put the funds into the appropriate categories. It's never perfect, so each pay period I may have to move money from clothing because we spent more in food, ect. I guess I have just found how to make it work for us. I'm on an old version that I paid a one time fee for and doesn't link to any of our accounts. What I like most about it is that my husband will use the app to enter in his receipts (although not always in the correct account or category). Before it was ALWAYS my job, at least now he's helping and can see amounts in the accounts.

    Happy Birthday! Mine is on Saturday. Smile

  2. CB in the City Says:

    My system is monthly; I total all my expected income, subtract all the fixed expenses, including funds toward semi-annual expenses like taxes and insurance. I also subtract a fixed amount for savings. Then I add whatever extra income I made the month before -- the total is what I have to spend that month (my "variables") and I track how much I use by percentage. If I can stay under 100%, I've done all right. Sounds more complicated than it is, and it has worked great for me. I just use an Excel spreadsheet.

    If I go over 100%, I have to decide whether the overage will come out of savings, or if I will subtract it from next month's budget.

  3. LuckyRobin Says:

    I use cash envelopes for the categories of groceries, household expenses, gas money, car maintenance, gifts, clothing, allowances, restaurant, animal feed, and personal care. Household is any item for the running of the house like laundry detergent, toilet paper, shampoo, and soap and also things like nails, screws, or anything I might have to pick up at Lowe's. Personal care is for hair cuts and beard trims. I also have funds set up that I deposit into every month for insurance, computer/phone replacement, and medical, college, and vacation (although that one doesn't get contributed to right now). I track those on a spreadsheet.

    It took me a few months to get the amounts for each envelope right, but we seem to be sailing smoothly now. You just adjust your amounts until you are happy with it. We started out with $200 a month in Household, which was too much, so the next month I adjusted to $100 a month, but that wasn't enough, so now it is $150 and that covers everything with some left over. It took me a while to get the right amount for groceries, too, but I consistently stay in budget now.

    Any money that is left at the end of the month in groceries or household gets swept into other areas. Last month I had a bit extra in each so that got swept into the gift envelope for Christmas. I could have left them in their respective envelopes, but having a little extra for Christmas is good. Normally I would sweep it into savings.

    We use a spreadsheet of our own making to track our budget and our funds. It is easier to build one exactly to your specifications than to try to make someone else's fit what you want.

  4. mumof2 Says:

    The first thing to do is write up a yearly budget so you know what money is coming in and out and when. you add in everything for everything so you add in food, gas, haircuts, clothes, when you do the car you add in registration/insurance/tyres/services etc...we have bills that come in quarterly/6 monthly and annually so we figure out how much it is a month and put it away in a seperate account so when those bills arise the money is there, we take cash out for groceries and gas and our "mad money". We also have birthdays, anniversaries and christmas money in the budget we have everything in ours. I do put an amount each month in an envelope with a list of gifts I want to get people and carry it with me so if we see a great sale we can get it and we buy things all year. It can be hard when you start off but if you stick with it it works. we are now debt free and after doing my moms for 18 months she will be debt free next week. It also allows you to know the best times for holidays, how much you can pay off debt etc...I already have next years budget written up for us and my mom so we can start looking at getaways that we want to take and how much we can spend etc...if you pm me I can send you some pages that I use to keep us on track....even with a lot of unexpected medical bills this year we have managed pretty well

  5. klarose Says:

    I use a mixture of cash envelopes, credit cards, and YNAB. It works great!

    YNAB has a pretty steep learning curve but if you can get used to it, it is awesome. It really changes your mindset from planning on future money to only budgeting what you have this moment. I like that. I'm not a pro, but I'd be happy to answer any questions about it.

  6. snafu Says:

    Happy Birthday Laura. Wishing you a wonderful day and a worry free, enjoyable year.

    We do a form of Zero based budgeting, primarily because it’s familiar to DH. I’ve kept it super simple, primarily based on a combination of our government’s suggested spending percentages of broad categories and previous year’s actual spending. However, I’ve always ‘paid myself 1st, transferring 10% of all income from whatever source to savings. As soon as we bought our initial home, we made it a point to create an EF, to eventually reach 1% of the value of that home. That fund fixes anything that goes awry, updating, upgrading, or landscaping. While we are currently mortgage free, we pay condo fees which have potential to increase annually. We drive an older, paid off SUV, that fits our needs, $ 1K deductible, basic insurance paid annually so it and dog have a sinking fund, sub set Auto/Misc. Anything leftover, is sweep into a linked savings a/c as soon as the month’s finances have been reconciled.

    * Cnd Budget: Housing 30%, Auto/transportation 15%, Food 17%, Health & Life Insurance 5%, Entertainment 7%, Clothing 4%, Medical 6%, Debt 5% Savings /Investment 5%, Misc. 6%

    Repetitive Bills are paid electronically, two business days before month’s end, each dated to be paid two business days before they are actually due. Following SA practice, vendors that don’t impose a fee are now initially charged on CCs that pay the best ‘cash back’ rates. 10% is transferred 1st, monthly bills, followed by quarterly or annual. Last are non repetitive bills. We both get a cash allowance to cover personal spending, hair cuts, manicure/pedicure, lunch out, treat friends, misc. spending.

    Tuesday is designated ‘ DESK DAY,’ I verify everything has been paid as anticipated. If we have spent the sum allocated in a specific category, spending in that category stops. If it’s transportation or food, I adjust one of the other categories…if I must. I usually can adjust food budget which is only for edibles if I run short somewhere. If DH overspends his allowance he ‘borrows’ from me as I really don’t spend much.

    If I have considerable allowance accruing, I hire a teen ‘mother’s helper’ for specific projects that I now find difficult due to that ghastly open heart surgery,

  7. Laura S Says:

    I use cash envelopes. They have worked out great for me. My categories are: groceries, gas, dining out, personal and laundry. Happy Birthday!

  8. livingalmostlarge Says:

    I found it easier to do an annual budget and breakdown monthly and work that way for envelopes. That way you can have ebbs and flows for some stuff like car insuracne, life insurance, vacations. Things you might not pay monthly. It also works for groceries and clothes where you might stockpile and then be like "oh great a deal" Or we really needs shoes.

    I am a super lazy budgeter and always have been. I pay myself first and live off the rest since it's easier. I just say we save 15% to retirement, 5% to savings, then all bonuses and then we just enjoy the rest.

    It makes life easy.

  9. laura Says:


    Thanks for all the feedback, Friends! My takeaway from reading about other peoples' money management systems are:

    1) the annual budget is something to consider as we start the new year (I've perseverated on Monthly Budgets and this will probably offer a better picture!)

    2) percentages are soemthing else to consider (I like LAL - 15% to retirement and 5% to savings) and its was helpful to see Snafu's budget percentages

    3) YNAB probably won't be the program for me. Steep learning curve and just the concepts have had me muddled in the past.

    4) a hybrid of cash envelopes and my own excel spreadsheet might be the way to work

    5) And I love the concept of a DESK DAY to do specific money management tasks

    Update:

    I did pull out the $250 for the week. My husband is the one responsible for gassing up the cars so I gave him $65 cash. I put $100 in the grocery envelope, $60 in the miscellaneos and $30 in other. (I don't really know what OTHER is - but thought I'd hope to roll those funds over to something else). We'll see how it goes and modify accordingly

  10. crazyliblady Says:

    I do have a budget, but tried numerous software, budget apps, and even just Excel sheets with no luck. I also tried envelopes, but that did not work for me. What did work was observing my spending and amounts over a period of a few months and coming up with categories and amounts that make sense. I put them on a 4x6 index card. When I am a store and want to buy something, I check the card to see if I can afford it. If I can't, I don't buy it. When I pay a bill, I make a line through the amount and note any leftover and the date paid. Any leftover amount, I reallocate to different area. These are my categories, but yours will probably be different because you have different needs.

    Mortgage
    Slush - a mini emergency fund
    Car Savings - to replace the car
    cc #1
    cc #2
    Lawn mowing - only in summer - in winter, I reallocate this to debt
    Savings Deposit
    Groceries
    Gas For Car
    Electric
    Gas Bill
    Water Bill
    Trash Bill
    Supplements
    Cell Phone
    Internet/Land Line
    Spending Money
    Transfer to V's Special Savings
    Miscellaneous

  11. livingalmostlarge Says:

    my problem has always been I spend cash and have no idea where it went. $200? Oh no it's gone.

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