The (recycled) envelope cash budgeting system.

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There’s no point in setting out to raise extra money without a firm grasp on where your current cash is going to. After years of trying to keep track in a variety of different ways I’ve opted for a concrete system that I can easily keep an eye on. I give you the recycled envelope cash budgeting system.

(You’re welcome).

At the moment I’ve got six envelopes. They are marked food, fuel, bills, clubs (lessons, subscriptions), luxuries. That last one is important. I think it was Heinlein who said “budget the luxuries first”. He may have got an awful lot of other stuff wrong, but in this instance I think he was pretty near the mark. If you can see that you’re getting near to the money you need for a particular treat it adds impetus to the budgeting.

So what I do is get cash out weekly and then split it up between the various envelopes. I’m allowing £100 a week for food and toiletries for the six of us, although I’m hoping I’ll be able to trim that down, particularly if I can get the cloth nappies going again. Clubs and so have got £40 a week set aside, though I need to check the prices of the various organisations. I’m putting £20 a week into the fuel envelope and hoping that this year is the year I finally sort out bikes for us all and cut out lots of the little journeys that end up costing the most.

Bills are the one that I need to look into. I need to check what we’re currently paying and see if there are any cheaper alternatives. I know direct debits are often cheaper, but if you ever miss a payment through not having enough in your account, then you can often get penalised both by your bank and the company concerned. Not good.

So there you have it, our fledgling budgeting system. Would love to hear your suggestions for improvements.

I’ve submitted this post to the Thrifty families february blog carnival. Do pop over and check out the other entries.

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12 thoughts on “The (recycled) envelope cash budgeting system.

  1. Very organised! I’ve got as far as £100 a week for food etc, but the rest is totally overwhelming me at the moment, need to get back in control!! Best of luck with your mission, and hope the nasty ‘flu clears off very soon!

  2. Great start knowing ehat you have and what you need is crucial. If you contact organised mum they do some really nice little budgeting books that might be really useful. Love food hate waste is a great website for food storage tips to make your food last longer.

  3. I want to know your exact menus because with 4 of us I don’t seem to be able to get my supermarket bill (which includes loo roll, some pet food etc) below £500 pm and often more than that.

  4. Wow Jax, this is quite a mission. Heaps of luck with it.

    You’re right about the luxuries – no point being miserable huh? Keep your eye on my blog, I’ve got some savvy tips coming up ;0)

    Sounds like you have the grocery shopping under control if you can do it all for £100, but I went on a course with Motivating Mum last year which was amazing – totally changed the way I food shop. x

  5. Grit challenged herself and the girls to see how cheaply they could eat, starting at £20 per day and got it down to £5 per day. What she found at the £5 a day (for 4 people) is that they ate a lot of onion and tomatoes and used dry stuff (pasta/rice) leftover from weeks with higher amounts of cash allocated.

    I’m just trying to get M to use stuff we already have. Challenging him to use up an item in the cupboard before it goes 5 years past its BBE!

    I like the envelope idea.

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