Cash Envelope Budgeting System & Giveaway

Edited to add:  To buy Cash Budget Organizers click the picture below. The Giveaway has ended.

Cash Budget Organizer with Cash Budget System by SimpliSave

With the economy the way it is, many folks are having to make various financial adjustments. We decided it was time for a renewed effort regarding that dreaded “B” word; Budget. We’ve chosen to try the cash envelope method of budgeting & spending. I’d heard about this for some time now, but never got around to implementing it. First of all, the idea of carrying around a fistful of envelopes filled with cash did not appeal to me, nor did losing the rewards points on our Visa not to mention the convenience. Of course, that convenience and those perks come at a price if spending gets out of control. I was shocked to see what credit card interest rates currently are now for even those with great credit! So, we’ve devised our own personal take on this system and I’ll share it with you it here. The first part was discovering a better carrier of cash than paper envelopes. I learned that several crafty individuals create and sell cash organizers for just this purpose. In my search for the perfect one for us to use, I ended up with two and have decided to do a Giveaway for one.

Now, for those who’ve not yet heard of the basics of a cash envelope system of budgeting basically it goes like this: You figure out your budget based on your income and expenses. Then you decide how much you have to spend in each of the categories, label the envelopes with the category names and place the appropriate amount of cash in each envelope. Generally, this is done on a weekly basis, so for example you might withdraw a certain amount of cash on a set day each week and “load” your envelopes. The idea is that once the cash in each category is gone for that week, you are done spending in that category. Now, I personally don’t see the point of putting cash in envelopes for things like the electric bill, etc. So for all the set amount bills each month that have to be paid, we’ve opted to have the amounts directly withdrawn through an automatic payment plan. We’re talking about things like rent/mortgage, power, water, trash, insurance, etc. Then we decided to have those bills paid on autopay and through our checking account or our bank credit card [where it was an option] in order to continue to earn some rewards. Because these amounts are the same each month, we know how much to immediately pay from our checking account in order to cover those “charges”. We’ve decided to discontinue using our credit card for anything other than the autopay bills and gas. The reason for gas is because it’s pretty hard to “splurge” and go crazy buying gas and there’s a significant convenience issue in paying at the pump vs. going inside with cash so overall we felt this one charge was smart. So, this leaves categories for things like groceries, household items, entertainment, dining out, clothing and misc. We’ve decided to use the cash system on these categories. Coming up with amounts for each of these was a little challenging. What we ending up doing was to look at what we’ve been spending, decide on a reasonable amount to “shave off” of that total and came up with a new, reduced total. The savings can then be used for other things such as paying off debt, savings and other financial goals.

The Giveaway:
One lucky reader will receive their own cute cash carrier (pictured above)to get them started on the system. To enter, please leave a comment below. The “theme” is your favorite budgeting & money saving tips. If you don’t have a tip to share, that’s fine, just leave a comment to be entered. Oh, and as always tell your friends to read SAHM: Surviving Assorted Home Mayhem! Receive one additional entry by either blogging or tweeting a link to your favorite post at SAHM: Surviving Assorted Home Mayhem. Are you a new reader and don't have a favorite post yet? Take a look at some of the selected favorites along the left side-bar to get started. When you link to a post (on your blog or Twitter or both if you'd like) leave one additional comment below letting me know. Contest entries will open now and run through Oct 14th. At that time I’ll select the winner through random draw, contact them through e-mail (make sure you have an e-mail address on your comment!) and mail them their organizer. Good luck and happy budgeting!