Have you heard of this or ever used it? I've had friends who started out using this and saw great success. You make a budget (eating out, entertainment, gifts, clothing, groceries, toiletries, etc) and then you place the budgeted amount of cash in an envelope. When it's gone it's gone! Of course, things like mortgage, gas bill, etc are not paid in cash but they are budgeted. I really like this idea for younger just starting out people--especially newlyweds. I think it can help you learn to live on a budget and not overspend or use credit cards.
I have read about this method in a lot of different places and it looks like this would be great for someone with A LOT of self-restraint. I am great at budgeting - I pay all of my bills and essentials, I always put money into savings and try not to touch that account, etc. But, the rest of the money - the one for discretionary/personal use - isn't really budgeted. I use the money I have. I'm not sure if I would be able to really sit and say, "This week, I can spend x amount of money on groceries. And y amount of money on eating out with friends." Plus, I really like using my credit card - both for ease and for the rewards (and, since I am pretty strict on how much I give myself, I pay off the balance every statement). Not sure how I would do carrying all that cash - plus, I feel like it would be too easy for me to say, "Well, I'll take 10 dollars from this envelope... and put it into my shopping budget because I totally NEED this accessory." I think this is a great idea and will probably help someone who finds themselves spending a lot of money on things they do not need (and therefore cannot afford things that they DO need).
No, i've never heard of this method before. It's sounds great, if a tad restrictive. But I guess some people, especially those starting out or those with very limited funds but who're given to over spending, need something like this to keep them on the straight and narrow, so to speak LOL I guess we have something similar, in that we stick very rigidly to what money we allocate different things, and once that money's gone, it's gone; there's no going back in the kitty.
I can see it now...2.00 for the week in my entertainment budget...Yeah that will take me far lol. I guess that method is great if you actually have somehing to put in the envelopes...I am lucky I can get my basic expense paid...not much left over for discretionary income in this house. You have to have a stable and predictable income to do that I think!
