Most of you already know that I use the envelope system to save money. It is an easy way to be purposeful with what I have rather than just spending on silly stuff and not achieving any of my financial goals.
For those of you who are not familiar the envelope system is a way to budget your money using cash. It doesn’t work well for everyone but since I’m still a teen and don’t have any regular bills I can still use cash for just about everything. I like handling the cash because it helps me to be more disciplined. I have a total of six envelopes:
I use this envelopes to purchase the little extras in life or whenever I need to purchase a gift for someone.
My hope is to attend school locally so that I can continue to live at home. There will still be a lot of expenses such as books, fees, tuition, fees, and more fees.
Can’t afford one right now (insurance costs are way to expensive for us) but I’m saving now toward the expenses associated with having a car.
Some people think that I am silly for starting now but when I look at all the charts that show how the money adds up over the years I just can’t help myself. Even saving a little bit now really adds up over the years.
I get a monthly allowance from my parents that I use to purchase all of my own clothing. Whenever I am able I will add a little bit of my own money to this envelope.
This is the money that I use to give to my church and other charitable causes that are important to me. Being frugal and careful with money can be code for being stingy and cheap. It’s really important to plan for giving to others or you may end up just spending everything on yourself.
Basically you decide in advance how much money needs to go into each of your envelopes. Once my spending is gone my spending is well…over. Once my clothing envelope is empty…my shopping is over. See how it works?
I have been working all year to save up in three of my envelopes: Car, College and Retirement. Just last week I finally got $100 in each one! Since I don’t want to keep too much cash at home I deposited the money into my savings account at the bank. My plan is to open a second savings account in order to keep my long term saving separate from my emergency fund. I will just keep track of how much money is from each ‘envelope’. I think that I may use the EEBA plan that my mom uses, but I will get the free plan that they offer. It will help me to remember how much money is in each category so that I can keep everything straight.
It’s really exciting to see my savings grow. I only make about $100 a month cleaning my Mimi’s house and doing some work for a homeschool c0-0p. Most people would say that I shouldn’t bother saving my money because I make so little. But don’t listen to people that say things like that! It is worth it and even when I can only put $5 or $10 into an envelope it adds up quickly.
How do you budget your money? What are your savings goals?