Making the Cash System Work for Us: The Overage Envelope

In March I started posting about our Total Money Makeover.   We have worked very hard on decreasing our debt and we love the cash system.  Admittedly, my husband wasn’t on board with the cash system in the beginning.  For years we tracked our expenses through Quickbooks or Quicken.  We sort of knew where each dollar was spent ….. when we remembered to enter all of our receipts.  My husband thought that we would lose control of our finances if we didn’t know exactly where every dollar was being spent.  It has been a few months and my husband is now a big believer in the cash system (and Mint.com).  You cannot spend what you do not have!  And it doesn’t really matter where you spend your money if you are following a plan to snowball your debt.

Each week I go to the bank and take out my allotted money.  We have $150 budgeted per week, but the ATM only dispenses money in $20 increments.  One week I take out $140, followed by $160 the next week.  It all works out in the end.

My goal each week is to have money left over!  This “overage” money isn’t necessarily “fun” money.  Nope, it goes to the necessities.  With our overage money we have purchased a water filter for the fridge, an oil change, a new computer monitor, parts for the (still broken) lawn mower, dirt for the garden, and had our tree stump ground in the back yard.

Our overage envelope is not pretty – at all.  Being frugal I started saving the envelopes from our junk mail to either use for my coupons or for the girls to play pretend mail with.  The day I started our overage envelope the only ones I had were junk.  So I taped an index card to the front and we just keep using it.  One of these days I will make a pretty one with scrapbooking paper.  Until then, functionality beats prettiness.

This may not work for you, but it works for us.  I always love hearing ways other people are snowballing their debt.