Thanks for your responses everyone! I'm not sure if this makes sense, but to me, using the debit card does not equate to using real money. I know that sounds ridiculous, but if I use cash I am MUCH more careful! And any money left over at the end of the month goes into the Disney Fund!!
Yep, makes perfect sense!
I don't think it is ridiculous at all! I think one common problem with debit card management is that it encourages you to make spending decisions based on how much money is in your account. But that doesn't tell you what other things that same money needs to be doing! A zero-based envelope system, whether in cash or digitally managed, helps you to know that it doesn't matter if you have $3000 if that $3000 has the job of paying rent, taxes, car insurance, etc. It's easy to look at $3000 and say, I can afford dinner! With some form of envelope budgeting you don't get the money all mixed up that way, and if there is no money in the "eating out" category/envelope you know you can't afford to eat out. It's made such a huge difference for us, and after some practice, we even became comfortable using credit cards for rewards again safely knowing all our purchases are budgeted and the bill can be paid in full on any given day (and I usually pay it twice a month out of paranoia!!)
I had this problem and it sucked. I always wondered where the heck my money went.
we've been using envelopes off and on, more on now, for 5 years and it make s a HUGE difference for us.
First we have 2 different banks one bank has income auto received and most bills auto debited. The other is for our day to day stuff. From the day to day stuff we have 3 different accounts - day-to-day, cushion, gifts (this is basically just saving for CHristmas b/c it gets so expensive).
From our day-to-day we take out the money each pay period for our envelopes.
We have an envelop for each member of the family. Every single one of us gets the same amount each pay-period, $20. We take half of each child's (7 and under) and that goes to their savings. The rest is for them to decide what to do with (plus we have and extra $20 each pay period that they can earn if they do extra things around the house - washing floors etc). So that's 6 envelopes for spending.
An envelope for pets - dog food costs us $80/month then we know we'll have other things like treats, poopbags, toys, beds etc that need replacing every few months or so. We also have an aquarium that needs a decent amount of cash put into it, but not all the time. So we put $100 into pets each month - whatever isn't spent, just stays there until needed.
We have a car envelope. My gas money goes into here b/c I'm more likely to have time to go in to pay than DH - and his gas is pretty set in stone b/c his vehicle is almost always exclusively for commuting. My gas spending is about $100/month - we put $100/pay period - so twice a month - the rest goes towards potential upkeep. We just had a minor accident with a $250 deductible charge - we had cash for it from months of savings.
We also have a business envelope - I'm saving to start a business, I get $25/month - it's not much, but it's getting me where I want to be.
Gifts - these are for birthday parties, and friends presents, weddings etc. We put $25/month in there. For most gifts we put a cap on how much we'll spend for a certain event - friends/kids birthdays are $25 - (our children get homemade presents so minimal cost most of the time).
Dates - $10-20/month - this is for any outing. Yesterday I took our children to the local nature centre - that came from date money. If we want to order pizza, that's date money, movies etc that all comes from here (no, we don't go out much, but over time we get enough to buy a family pass, then we are able to go out as a family frequently while still saving.
B/c I buy my groceries online we leave that money in our account - we have meal plan so we are able to be pretty exact in our groceries budget. Kids' lessons come out of our account, bills are out of the account. We have exactly enough in our account each month to cover our expected bills - the rest gets put toward debt, or savings. We keep a minimum of $3000 in savings in case we need it. As long as we have that, then the rest goes to debt - the exception being if we know an expense is coming up.
This year we want to finish our basement, do some landscaping, and go to WDW. The trip is most important, so we put money aside for that first. Once it's paid off, then we put mine towards landscaping b/c that's a limited time frame we have to do it. Then we put money aside for the basement. All the while we have money auto withdrawn for debt, and we add at least an extra $10 to each item, as well as an extra $100 to the bill that causes me most stress.
In general we see a lot of money in our hands each day, this give positive feelings, and seeing the debt we're upset about decreasing also leaves us with positive feelings.
