Tuesday, July 12, 2011

Envelope System - One Year Anniversary!

Yikes, I've been finishing up VBS stuff this morning and I honestly almost forgot about the blog, haha. And how could I forget to blog TODAY? Today of all days??

No, we're not debt free...yet. Shucks! I know I haven't mentioned it in quite a while, but the month of July marks exactly one year since Eric and I began using the envelope system for our personal finances!! Don't know about the envelope system? Check it out HERE. It has completely transformed our lives and how we spend money. Does it work? You betcha! But only if you can stick with it. :)

Over the past year I have to admit that we did "fall off of the horse" a time or two. There was one almost two-month period where we strayed away from using this simple system and started buying things with our debit cards left and right. And it felt...wrong. We began realizing that we were WASTING so much money, and we had no idea where the heck it was going! I'm sad to say it, but those two months have set us back on paying off students loans as soon as we'd like. Seriously, what were we thinking? But we are back on and going strong, and it feels wonderful.

Eric and I discovered the envelope system before we were even married, when we went through Dave Ramsey's Financial Peace University for the first time. We knew that it was something we wanted to do in our marriage, because...well...it just seemed to make a lot of sense. Because financial stress is the number one cause of divorce today, we wanted to safeguard ourselves from that. And would you believe we never have money arguments? Believe it. :)

The thing is, taking on such a drastic lifestyle change isn't something you can do by yourself (if you're married) at all. Both partners have to be on board to make the envelope system a success. It can help you pay off debt, save money, and give you control over your personal finances, but you have to actually do it, and that's going to be hard if one of you is kicking and screaming, haha. And that's why I would HIGHLY recommend hooking up with an organization in your area hosting Financial Peace University and going through it with your spouse. (If you're single I recommend it, too!) It's actually a lot of fun, and you learn A LOT; from how to knock out debt, to how to buy big deals, to how to invest and insure your family.

Because we made our personal finances such a priority from the very beginning, I feel very safe and at peace with the fact that if something were to happen to me or to Eric or both of us, our girls would be taken care of financially for the rest of their lives. One of the first things we did after getting married was to sit down with an agent and work out our life insurance policies and all that junk that young people usually aren't thinking about. I will admit that at ages 21 and 23 it felt weird to be thinking about our demise, haha, but I'm so glad we did. Thank you Dave Ramsey for kicking us in the pants!

Our church served as a host for Financial Peace University a couple of years ago when Eric and I went through it the second time,  and I BET if there was enough interest from the community they would be willing to host it again. So please let me know if you're interested! I could totally see us starting a new class back up in the Fall or Winter after we're in our new building.

I can't even imagine what life is going to be like when we don't have the student loan noose hanging around our necks anymore. Eric is currently getting his Master's degree and you better believe we're cash flowing that baby! No more loans for us! Our hope is that by this time next year we'll be able to call Dave Ramsey's radio show and scream "I'M DEBT FREEEEE!' We can't wait. :)


Heather Rahn said...

I wish I had the motivation and self control that you have to do something like this. Good for you! You guys should be proud!!

Cassie said...

heather - sitting through just ONE of those classes is enough motivation to be like HOLY CRAP my money is just being blown. no joke.
it is super hard when both spouses aren't on the house together and yes you do fall off a time or do, but it's ONE crazy expense and you are like WOAH let's get back on that baby.
keep up the hard work guys!! can't wait for your debt free friday call!! lol.

Adrien said...

Haha, it's true! Sitting through one of the classes will kick your booty...or make you laugh at yourself. Or both. :)

Jackie said...

I wish we would do this...I don't know if I can talk Eli into it or not...he is really good with money and we have been paying debt off like crazy but I think this would help even more! I want a house so bad!

Jackie said...

ok so I think that I am gonna try this but I have a few questions.

I watch your video on how to get started and I think I get all of that but I guess my question is how do you decided your envelopes. I get the main ones like gas and stuff but what like all the little extra ones, like hair or scrapbooking supplies...stuff like that do you do a separate envelope for each one or just do one and list all of your extras on it?...does this make sense? Also I think that I am gonna have to do a budget every month because I get paid different every month and sometimes I work my extra jobs and sometimes not...will this still work? Also do just keep money in your wallet for little things or not? Sorry lots of questions! Thanks!

Eric Robert said...

Jackie - you can setup your envelopes however it works best for you. If scrap poking is really important to you, it probably makes sense to have a specific envelope. We generally use our entertainment envelope as blow money/catch-all for non-essentials and fun it accordingly.

A monthly budget is an absolute must whether or not you have a regular income. I would highly suggest you pick up Dave Ramsey's book Total Money Makeover and give it a quick read. It has all the easy budget forms an advice you need to get off the ground quickly.

To set up our initial budget I broke down our monthly expenses into two categories: fixed and variable. For fixed expenses I wrote down the bill name, amount, and due date. For variable expenses (food, electricity, etc.) Averaged put previous months and used those figures. You may have to adjust the variable expenses for the first few pay periods until it balances out.

If you need any help at all feel free to send Adrien and me a message (the same goes for anyone else reading this).

Jackie said...

ok thanks so much!!!

Adrien said...

Hehe, scrap poking. :) Yes, what he said. I usually don't have a need to carry extra money, because the envelopes are at home at my disposal when I need them. But Eric usually has about $20 in his pocket when he's out and about. And yes, picking up that book will help a lot. It will answer all of your questions and then some!


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