Major fault in an otherwise excellent piece. But major enough to make this unusable. If all has an “etc.” what good is it?

Glad to know it’s working for someone else!

Congrats on the success. I hope we do as well!!

Congrats on the car and the personal training business!

I am going to try this system and see how it goes for us. I can’t wait to try something new with our money in hopes that we can actually save some money.

However, personally I am always fighting my desire to switch to cash this way because I love accounting for every penny. Even if I set aside a weekly cash allowance of $100 for food, entertainment, drugstore purchases, etc. part of me is bummed that cash purchasing makes it almost impossible to track exactly how much I spend on food vs. movie tickets.

I guess you can’t have everything…

Congrats and good luck with your business.

In other words, we already have a built-in saving (take home pay minus all expenses.)in the beginning of each month.

I ‘pay in’the emergency fund, home maintenance fund, and vacation fund as if they are expenses, but in fact they are extra savings. This past year there were some home repairs that needed done. The expense came out from the home maintenance fund. We also went to Texas for our niece’s wedding. The vacation/gift fund came in handy. If it weren’t for these accounts I would be so nervous about the extra expenses.

It takes planning and patience to see the result. I’m glad to know there are so many savers out there like me.

I like making it a game to see how much I can have left in the envelope at the end of the next week, and then that money is saved for larger/unpredictable purchases like furniture or a great garage sale deal, or doctors copay (with two kids we could have a lot of that all at once) – so it kind of functions as a preliminary layer of our emergency fund or an emergency fund for non-emergencies.

I can see how keeping $ out of your wallet would help…but I also see potential for my husband & I to compete over the remains in the envelope. I’ve liked having gas/food budgeted so that what is left after savings is divided and a non-issue.

We’ve tried the meticulous route—it can’t hurt to give this one a try for a couple months. Thanks for the inspiration.

Where was the money going? Honestly, I don’t really know. Here and there? This is what I can tell you: if we get to Saturday and there’s no money in the envelope, we don’t eat out. I wanted a new pair of jeans (I only had one pair and it had worn out — but jeans are a want, not a need), so I waited until we got to the end of a week and had $40 left over (with which I got two pair of jeans and hubby got some new underwear). But in the old budget, I might have gotten another pair of pants and some socks, and hubby might have gotten a few shirts, which would double or triple that day’s spending.

As far as groceries: we plan all of our meals for the week on Sunday, then go grocery shopping. This is the same day that money comes out of the ATM, so we always have food. Typically, we also end up getting gas early in the week as well. We chose Sunday on purpose for money withdrawal so that we would not be strapped for food, and so that if we had $60 or $80 left on Friday night, we could spend it (if we so chose) on dinner or entertainment or whatever and not be worried that we were going to need it for something else later in the week. (Sometimes we just roll it into the next week; sometimes we buy things we don’t usually need like dog food or a car wash or something.)

Does that help?

It is interesting though that you just did a different way of accounting for your spent funds and you ended up with all this extra money. That’s a good thing.

Congratulations.

JD — it was great to hear your voice on Marketplace Money this week! http://marketplace.publicradio.org/display/web/2011/01/07/mm-tips-for-staying-financially-fit-this-year/

For me, definitely, keeping money out of my wallet is of key importance!

@retirebyforty: we both have 457s that are deducted from our checks before we see it, so retirement savings happen before we even see income.

@Tyler: yes, that’s what happened. My checks are direct deposited into our checking account and his are direct deposited into our savings account, so over time, when I was paying bills, I needed to transfer less from savings into checking to pay the bills. And then “magically” in the end of May, there was enough money there to pay off the car and leave a bit in there.

We’ve started chipping down the monthly bills now, too: refinanced the mortgage (saving money short-term and long-term), reduced our electricity bill. When our cell phone contract is up, we’re going to switch to prepaid phones.

It also occurs to me to mention that keeping most of the money in the house (and not in our wallets) helps it to last the entire week.

After all your fixed bills, you had approximately $2000/month left.

You split that in half, giving yourselves $1000/month (about $125/week/person) to spend freely on non-bill expenses (groceries, fuel, frivolities, etc).

You started putting the other half of the $2000 into a savings account (which previously, had just been grouped in with the first half, to be spent at will).

Over time you adjusted to $800/month in spending money and $1200 in savings.

After a while, your savings account was big and you paid off your car.

That’s how it worked, right? It’s not real clear in the article where this “savings” money is actually going.

A few months ago I found myself looking at my budget that way too. I had helped my 20 year old son to make a spreadsheet budget like mine, and he added a line for “Disposable so far unspent”. I had had a previous category for “Unallocated”, but all that encouraged me to do was allocate everything so I could spend it.

I too was astonished to find out how much “disposable” income I had every month (groceries, pet care, clothing, entertainment, etc.). Maybe I’ll try your new system of taking out cash for half of that amount, and see if it helps my savings too!