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SO I have decided to give this envelope system a go! I really like the control and seeing EXACTLY what I have.

My problem is that right now, I am behind on several bills. How do I get STARTED? I have a budget binder with envelopes all made up, my budget is done, etc.

I just have NO CLUE how to start. DO I just take out a paycheck in cash, and start separating it? Beg companies to let me delay payment? (haha - I wish they would!)

I am excited and really hope this works!!
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You can do that. Or if you have auto-pay setup for some of them that you want to keep, such as electric bill, car payment, etc. you can leave those exact amounts of money in there and take out the rest in cash.

Here's what I did:

Cash-only except what was electronically taken out. I took out cash for: dog food, gas, groceries, Rx, household such as paper towels, cleaners (it was torture to go to Target with a debit card so I made myself only take cash for those items)

Then I graduated myself to debit card. Recently I went to Petsmart for dog food, a previously cash-item, and had extreme urges to buy more than dog food. I may have to down-grade myself back to cash for Petsmart. For now, I fought the urge and only bought dog food, but it was really difficult.

Do what works for you, really be honest with yourself. If you make it too inconvenient it is tempting to say "screw it" and give up. If envelopes work, stick to them.

You can do this!
 
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DO NOT LET THE CREDIT CARD COMPANIES HAVE ACCESS TO YOUR ACCOUNT! They will take more than you agree to let them have.
 

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You have to figure out how to fill the envelopes without letting your bank overdraw. If you have automatic payments coming out, you need to stop them, but until you do stop them, you need to make sure the bank has enough money in it to cover those costs.

You say you're behind on bills - so I trust your budget is focused on getting current?

If you get paid every two weeks, then you could start by dividing your envelope amounts in two and putting in half the monthly money each pay - BUT if that puts you short in the bank account for the electronic payments, then you have to do without (or with less anyway) in some envelopes this cycle.

It'll take you about three months of living on a plan to really get the hang of it - so expect to make some mistakes early on. My advice, err on the side of caution. :)
 
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DO NOT LET THE CREDIT CARD COMPANIES HAVE ACCESS TO YOUR ACCOUNT! They will take more than you agree to let them have.
Oh? How so?
 

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Oh? How so?
It's really more the collection agencies (most of whom either work for the Credit Card companies or bought the debt from them) that you need to be careful about. Or anyone with whom you're in an adversarial relationship, really.

In a nutshell, the radio of scumbag collectors to honorable ones is very high.

The scumbag collectors will make all kinds of promises and assurances over the phones in order to get access to your money - and they'll tell you how they have to have electronic access - checks are no good, etc - (but mail em a check and amazingly, they'll cash it).

So say you're behind on a $2,000 debt. You get dozens of calls a week, you get badgered and beaten and emotionally abused. They call you at home, they call you at work, they call you in the morning and at night. They try every trick in the book (most of them illegal but most people don't actually know that) to get you to react emotionally.

FINALLY to get them off your back you agree that they can pull $100 you really don't have but you'll stretch to make work and you give them your bank info and they swear up and down that in 2 days they'll only pull out $100 and you know that when they do you will JUST have enough money left in the bank for your rent to clear and you'll have to wait till next week to eat.

So 2 days pass, and you don't hear from them, so you're relieved, and you think nothing of it, and then 2 MORE days later your landlord calls asking why your check bounced. So now you look at the bank account and they didn't pull $100, they pulled $600, you've bounced 4 checks and been hit by another $120 in fees.

And when you call THEM up, the person who made all those promises about pulling only $100? The one you talked to 5 days a week plus weekends... Well suddenly "they don't work here anymore but we have a record of you authorizing a $600 withdrawal" and they even have a voice recording of you saying, "I approve giving you access to my account" but mysteriously the AMOUNT didn't get recorded.

You should basically assume, when dealing with any debt collector, that they ARE a scumbag - because the odds of them being one are quite high, and you need to be highly on your guard with them.

You do everything in writing and only in writing, no over the phone agreements. You never ever ever ever give them electronic access to your accounts.
 
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I should rephrase my statement of "Cash-only except what was electronically taken out."

Instead of letting the companies take money OUT, I am actually using Bill Pay which is free. I send the company the amount, they are not pulling it out themselves.

Sorry 'bout that. Ceashels thanks for pointing that out.
 
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