If you’re still licking your wounds from the school Easter holidays, you’re not alone. According to a recent survey, school holidays cost parents a staggering £1,500 a during the school summer holidays alone – and that excludes all the regular costs that go with raising our children when they are in school.
Spending less is one way to stop burning a hole in your pocket, but if you don’t know where the money is going, it can be a little difficult to cut back. You can’t decide to stop buying food, for example.
With the help of a Filofax Saffiano Compact Zip Organiser and an old wive’s envelope system you, too could get a handle on your finances. If you’re hot on money management, you may well have heard of an ‘cash envelope system’ guru called Dave Ramsey. He has a number of bestselling books on the subject, but we’re just looking at one part of his system.
The envelope system
So what is the cash envelope budgeting system? In simple terms, you basically have a set of envelopes that are labelled with the category of spending associated with it. So, you could have:
- Petrol and travel
- Beauty and make up
This is a very basic example of what the main cash envelope system envelopes can be, and they are very personal. We all know what we pay cash for, so your system may have other categories that are not present in the system of another working mum and vice versa.
So the cash envelope system basically means that you take cash out for those items that you spend and unknown amount on every month. Costs like mortgage payments, water bills, TV licence etc are all now costs, and you probably pay them by direct debit. The cash envelope system helps you curb your other spending – you know the ones that you make without planning to make them.
With the cash in an envelope in your wallet, you can see how much money you have available for each category and either stop or slow down your spending as you come close to zero.
The interesting part is that because you can see the money that you are flitting away on everything and nothing, you’re less likely to spend it. And if you do spend it all, you know that you have to wait until the next budget month or week before you can buy anything else in that category. You can borrow from another envelope, but that will obviously have a knock on effect on that category, too, so it brings you back to your original standpoint…slow down or stop spending.
There aren’t many wallets that can accommodate the cash envelope system effectively – we’ve had a good look around, believe it! You need a wallet or purse that can provide enough space to add a few envelopes that are full of money. They will take up a little more space, but the Filofax Saffiano Compact Zip Organiser is perfect. Maybe it’s the fact that this 12-card holding 20.8cmx12.3cm organiser come purse s already set up to accommodate more of our lives than the bog standard wallet.
We love the fact that it comes in aquamarine, pear (green), poppy (red) and raspberry, as this means there is a fresh and vibrant colour for everyone. You’ll be proud to whip this organiser out at the till – even with your envelope system.
If you’re not keen to use a wallet like the Saffiano, many others use an organiser to list their spend, and add up their receipts at the end of the day. This seems like a lot more effort. You really don’t need to carry all the envelopes with you. If you’ve got a busy day ahead in the office, for instance, and have dinner batch cooked for the week, the food shopping money can stay at home, for instance.
Many bloggers use their traditional Filofax organiser (or other organiser brand of choice) to implement the cash money envelope system, but we’re not keen on that. The main reason is that they are usually very bulky to use as a purse, but to each his own. If it works for you, there are many lovely organisers available that can work with the cash envelope system.
We’d love to hear your thoughts on the cash envelope system. If you’re using a system that works that is slightly different, please do share.