Envelope System to Budget and Save Money by Dave Ramsey Review
I received the Envelope System by Dave Ramsey to review and tell you about.
This came at a perfect time for my family. We are due to have our 4th child by fall of this year and we have been looking to move into a much larger home by this summer. We usually have a hard time budgeting with 3 kids. There always seems to be something we think we “need” and we end up spending much more than we intend to.
With the envelope system, it’s set up to where you plan out each month’s spending into categories. For that entire month you put in an envelope, the amount of money you plan on spending and NO more than that. If spend that allotted amount in your envelope, you cannot grab those credit cards and continue your spending. This will allow you to watch your spending habits and learn to plan out and budget your cash so you aren’t reaching for those credit cards and end up over spending.
The categories I chose to write in my envelopes were “Food”, “Entertainment”, “Monthly Bills”, and “Gas”. For each of those envelopes, my husband and I planned how much we intend to spend on these categories for the entire month. We then placed our money inside the envelopes and every time we go out to eat, go bowling, pay a bill or gas up our vehicles we take the amount of money out of the appropriate envelope and write down what we spent, what we spent it on and how much we have left in the envelope.
So far we have been doing pretty good and we have been able to save up for our new home and baby items we will need soon. Sometimes it’s hard because kids are demanding and want want want as always so we have ran out of money in our envelopes faster than we intended to. But it’s an eye opener! I haven’t reached for a credit card yet though so I think we are doing good!
This system is really great if you are serious about budgeting and spending less than you normally do. The whole intent is to help you spend LESS money and save more. If you want to save that money, this is the perfect plan for you! It’s easy to use and it really does work if you are committed to it!
5 things I liked about the Envelope System:
- I liked that this system will help my family budget our money easier.
- I liked the monthly envelopes included with the ability to keep track of your spending right on them.
- I liked that I can actually keep this book inside my purse to hold my money and bank cards inside.
- I like how simple and straight forward the envelope system is, there’s no confusion on how to do it correctly.
- I like that this system will help my husband and I save money and keep us from over spending like we usually end up doing.
I didn’t really dislike anything about the envelope system because it’s so easy to maintain and understand. But, if I had to find 2 things I didn’t like I would say having to sit down and plan a whole month of spending could be a bit difficult, especially with 3 kids. And, if you end up running out of the money inside the monthly envelope you are NOT allowed to spend any more. I think that might be difficult!! My life can be unpredictable when it comes to spending and money! But, that’s exactly why I need a system like this in my life!
The Categories are completely up to you on what you would like to categorize. The examples of categories they give you are food, gas, and entertainment. These are all cash-only expenses that you would have. Categories I chose were of course monthly bills, food, and entertainment. You have free reign to choose whatever categories you would like and add in to each envelope which I really enjoyed. They actually don’t mention an emergency fund planning in here, but they do state it’s best to start off with putting your receipts for an entire month in each category so you can find out how much money you are likely to spend in the next months in those categories. What I am planning on doing is adding a little extra money then I actually plan on spending to each envelope just in case I do happen to overspend for an emergency. I think planning for a whole month will be beneficial to my family in the long run. We really have a hard time saving money at times and with our new move coming up we really need to be making a serious effort on saving up our money and watching how we spend. I think once you get the hang of controlling how and what you spend that it will eventually come without even having to plan or think about it. I like the idea of pretending I don’t have as much money as I really do, and to act and spend like I have hardly any money at all so I can save money a lot easier. The envelope system has been a great start for me!