Getting started with cash envelopes

The system that tackles your budget.

I'm sure we've all heard of Dave Ramsey. I hadn't until I started watching 'cash envelopes'  videos on YouTube and got recommended to listen to him a year ago. I binged his YouTube videos and done plenty of research and started his envelope system for myself. A lot of people still don't know or understand how it works. 

First of all, you're probably wondering what the Dave Ramsey's envelope system is.

To put it bluntly, its an easy way to keep track of exactly how much money you have in each category for the month by putting your money into envelopes.
If you're anything like I used to be like, going over in category's(mine was groceries and eating out). Taking the money you have agreed for your budget out of the bank and putting it in an envelope will keep you accountable. Then when you go shopping for that certain category you can use just what's in your envelope. 

How?

Think of the category's you go over in your budget regularly, make a list(notes on my phone is my best friend). A few examples are Groceries, Eating out/takeaways, Personal, Beauty, Gifts, petrol and so on. 

Finding your budget. 

now, look at the category's you are going over in your budget. If you know that you're always overspending on groceries, write a realistic budget and make sure its something that you are able to stick to.

if throughout the month you're spending more than you'd like on things such as impulsive buys try to look at limiting this. 

Fill your cash envelopes.(my favourite part)

Now you should have all your category's and what you have budgeted for them written down. 

so, after this you will take what you budgeted per category and split it between your pays. 

Example: if you've budgeted £400 for groceries and have 4 pays throughout the month, you will take £100 out each week and put this straight into your allocated grocery envelope. Making sure you ONLY spend what you put in there.

At the end of the month, if you have money left over in your cash envelopes(YAAY) you can either: Roll the money over to next month, treat yourself, put it towards your debt payoff(if you have any) or do what you like with the remaining money.

Remember, when you're first getting started you might not get the budget 100% right to suit you and thats okay. you need to trial it and see what works for you and work around it.

Thank you for reading my blog, I hope you enjoyed it and hopefully fount some new information out or it helped you understand more. Again, this is my personal experience and if you want to leave a comment for others as to what you have learnt feel free to do so! 

 

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