Can someone explain Dave Ramsey's envelope system

**jade73** · 12-27-2006, 08:39 PM

Hi I have been reading alot of post and they are talking about Dave Ramsey's envelope system can someone please explain.Trying to go into the New Year ready to take down my the biggest MONSTER

in my life BILLS Thanks in advance

**watchingpennies** · 12-27-2006, 10:07 PM

Simple version...any expenses that are not fixed you use cash (groceries, gas, gifts, etc). You plan your budget and put cash in envelopes for these categories, marking down where you spend your money on your envelope. When the money is gone...you are done spending. Check out his website as he has good budget templates which I believe show which categories you should use the envelopes for. www.daveramsey.com

**Juto** · 12-28-2006, 10:12 AM

I would like to be more serious with the envelopes, but we buy our gas at Costco because it is cheaper and you must use your Amex to buy it. Along with groceries, we get money back each year for the purchases we make with our Amex. I just need to figure out how to balance both because using the Amex for everything(and we pay it off each month) gives us more temptation to just buy whatever we want....

**jade73** · 12-28-2006, 10:22 AM

Hi And thanks for the information watchingpennies.I will check out the web site.

**pammy** · 12-28-2006, 05:42 PM

I'll write how I work mine, hope it helps.

We get paid bi-weekly. So I set an amount to pull out in cash for my 3 envelopes, these are for things I will be buying before the next payday. So every payday I withdraw $350 out in cash (or whatever number best fits your family and situation). $150 goes into the grocery envelope, $50 goes in the gas envelope, and dh and I both get $75 each blow that goes in the blow envelope. (yes, high, but that encompasses entertainment and any eating out. As the dh says, it's the grease that keeps the wheels running in our budget.)

So I know when I go in the grocery store (or Wal-mart for household items, I just lumped it into 'grocery' for convenience) I know I only have a set amount to spend, when it's gone I'm done. To avoid the embarrassment of going over I REALLY watch those totals. It just really hurts to see that money leaving your hand, so I can say for certain I know I've cut my spending by using cash.