We've been faithfully using our cash envelope system for about six months now, and I love it. At first I wished our budget allowed for a larger amount to go into the various envelopes, but after adjusting to that, I really like the discipline it forces. If we don't have the money in the envelope, we simply don't buy whatever it may be that we'd otherwise be interested in. Sure, this means we aren't doing a lot recreationally, for example. But what we do choose to do or purchase, we enjoy more, because we're making a very conscious choice to use money in that way (and most likely we had to save up for it).
This higher degree of discipline with our money has enabled us to pay off all but $400-some dollars on my OB bill of $4,114 plus a $440 ultrasound, plus about $100-worth of labs. I also see God's supernatural hand of provision in there, because I can't believe we've been able to do that. We'll still have a hospital bill, but this experience encourages me that we'll find a way to get that paid off too. (Prayers for a healthy, non-complicated birth and baby are much appreciated!).
We found that the restriction of using the cash envelope system brings about financial peace. Once we learn to live within the budget, we have greater control over our money. There are no longer the $10-here, $20-there "small" purchases with the debit card (or uncategorized cash) that can add up to $50 or more a month. If I look in our food envelope, for example, and see that we're dipping below a certain point, and I still have groceries to buy, there will not be any running through the Wendy's drive-thru on a night I may not feel like cooking. We're telling our money where it's going, and we're making thoughtful decisions about it. This discipline allows the money to grow. It feels good.
The other benefit of the cash envelope system is that we're faithfully putting money into categories, such as our home, that previously never got funded. We'd always look at our checking balance and feel like we couldn't afford to spend money on this or that, so we wouldn't, unless it was an emergency. This way, we're designating some money each check to those previously unfunded categories. If we don't need to spend it, it grows. We'll be able to paint the house or purchase new carpet at some point, because we can see that the money's there.
So this Coffee Talk Thursday, let's talk budgets. Do you use one? Do you love it, or do you find a budget too restrictive? If so, I would encourage you to give it another try. I know some of you have said in the past that you use an electronic budget instead of a cash-envelope system. That's great, too. The envelopes just work better for me, since the cash is more tangible. I'd love to hear what's working for you.
(Linked to Frugal Friday)