To ask if anyone does the ‘Cash envelope system’ to budget?

[StickThatInYourPipe]

Hi All

My partner and I finally went through our finances at the weekend and quite frankly they are shocking. We are always needing to use CC by end of month and now I can see why this is! We live completely beyond our means!

Has anyone tried the cash envelope system to budget? I have been seeing online some videos etc but was just wondering how people actually got on with them.

Thanks!

I should add that I have never in my entrie life made a budget.

It really really really should be taught at school!

I'm not sure what you mean, but I put money away in envelopes when I'm saving for something.
atm, it's spending money for our family holiday.
I use tins as well.
But we have always lived within our means, know to the penny, and budget wisely.
I'm not sure if it would work if that wasn't your nature.
Give it a go, it doesn't sound like you've anything to lose.

I disagree about it being taught in schools, they teach enough already, it's certainly a parental responsibility.
I started teaching ours when they were toddlers, with little things like pennies to buy sweets.

Ha I defiantly don’t have anything to lose!

From the looks of it, you take out your monthly budget in cash then separate into envelopes labelled for different things, like ‘food’ ‘eating out’ ‘fun’ etc. Once there is nothing Left in the envelope, you cannot spend any more until the next month.

It really really really should be taught at school!

Really?! I think schools have got quite enough to do with the curriculum, to be honest!

Fair enough gillybeanz, but I do think budgets would have been a much more useful skill than a lot I was taught at school.

I had wealthy parents who didn’t talk about money. That is a recurring theme with a lot of friends my age who are in the same position.

I don't know what you mean by cash envelope but I remember seeing how my mum budgeted when I was a child.

Dad got paid weekly in cash. Mum had a list of how much she had to put away every week for all the bills that might come in. Even ones that only needed paying once a year she had a weekly amount worked out. Each bill had its own jar or tin and she would sit down every week and put the cash for bills away. Then there was a sum she used to shop with every week. After that she had money left that she put in a savings account for things like holidays.

They didn't have a lot of money but we never went short and she was never, ever in debt.

When I started working I was of course paid direct in to a bank every month but in a way I have always adopted her approach. I have a spreadsheet for all the outgoings and every month a certain amount is ring-fenced for all the bills.

I had wealthy parents who didn’t talk about money. That is a recurring theme with a lot of friends my age who are in the same position.

So that was a failure of your parents then, not the school!

I did this during the recession when money was tight and it really works.

Appuskidu I have never said it was a failure of the school. I just think a lot of children won’t learn it from their parents and need to learn somewhere.

I agree it should be taught in schools!

Some people are useless with money, so won’t be able to show their own children how to do it.

I did try this, but I didn’t like the idea of envelopes around with money in. I do a monthly and fortnightly budget however and move it between my 4 accounts.

LoisWilkersonsLastNerve That’s good! I’m going to give it a go from payday, have everything written up. I’m quite excited in a really sad way!

Backscratchesforever That has been a little worry of mine too tbh! I see oh YouTube people stuffing £100s into envelopes and I think, aren’t you just advertising how much money you have Lyon around your house?

Luckily we have a built in safe so will be keeping it in there, but I am thinking of doing it in 2 weekly slots instead of a full month

I havent used the envelope budgeting system but we do work to a budget its hard to change spendig habits but once you have stuck to it for a while it becomes second nature.

I agree that it should be taught in schools. Budgeting, Finances and Credit are more important life skills in my opinion than some of the current curriculum.

Please ignore awful spelling a random cap letters, my phone screen is really cracked 😩

pinyata I keep telling dp, it will be easier once we have done a few months. He isn’t convinced I will stick to it but promises he will. I am determined to stick to it now just to prove him wrong ha

I don't put aside into tins / envelopes etc as right now I don't have enough to save for extraneous things over bills / food / petrol.
However I do know to the penny what is in and what is out as I have to, so I need to know there is X in the bank when things have to come out.

It's a mindset - I do however keep all my money in a seperate account and literally move it over when I need to spend it into my current account ( done so easily via app etc )

We do. I withdraw all the cash we need for the month on pay day and then it's allocated into its envelopes. We generally don't spend anymore than what's in there.

There's 4 for the big shop, 4 for top up milk shops, then everyone's hobbies by week, and anyone else we have in doing jobs (window cleaner, grass man).

Kind of

So i have envelopes at home for things that need to be paid for in cash or for spare (entertainment) money

So windows, nails, hair, garden

And then our bank account has many small accounts within it, so Christmas/birthday, car, white goods, DIY etc

Thank you guys! I’m really looking forward to being on top of it all, I just need to have faith that I will keep it up and review more often!

Oh sorry

We also take walking around money (as my friend termed it) out every weekend which is supposed to cover odd food shops, maybe a takeaway, childrens stuff, coffee out etc

I'm going to start You Need a Budget after seeing some very positive reviews. It's similar to the envelope system but all online. You budget each section and move money around as necessary. If you overspend on one area, you need to take it from elsewhere.

Rufustherenegadereindeer1 I get you! I have labelled that sort of cash up as ‘blow money’

No. I think it's far easier just to have more than one account. Just after payday transfer a sum to cover all bills, regular or irregular. And then pay everything out of it. I budget for everything from council tax to Xmas and new school uniform. Then anything left is for food, diesel, dds spends and non essentials. This covers everything from holidays, days out or replacement appliances.

For me it's enough to transfer anything left, or any non essential that isn't affordable in one months salary over just before payday. And some months there isn't any extra.

If you really aren't good at budgeting or would find it hard to keep track of which is holiday money and which is for the mot etc, you could probably have a third account to separate short term savings and actual bills.

I also thoroughly recommend 'You Need a Budget'. It's a brilliant budgeting tool and has revolutionised my finances.