We started out using the Dave Ramsey envelope system when we went through the Financial Peace University classes 4 months after we were married in 2004. We were hard and fast believers in the concepts he teaches, but we could never quite jibe with the cash thing. We found it to be just plain cumbersome in so many ways, and one of the most important parts of budgeting is making it work for you!
What if you lose the receipt???
Seriously. Almost no one we know keeps their receipts, which is just bizarre to us. We’ve been using a Neat receipt scanner for years and love it. But the reality is that even though it is a very ingrained habit for us to get and keep receipts for EVERYTHING, sometimes they still disappear. If we had used cash to pay for that purchase and not managed to record it right away – wow, I’m sorry, but my memory is just not that reliable! Using a debit card on the other hand… at least you can find the basic information.
(click on the image or link to get a Neat Receipts Scanner on Amazon and support ticoandtina.com)
What are you supposed to do with the change?!
Dave Ramsey always sites studies showing that consumers spend 12-18% more money when using a credit card versus cash. He says you feel it more when you use cash. Somehow we always found the opposite of this to be true for us, however. Cash money feels more like play money or something. Too much monopoly growing up? I don’t know. I do wonder if it’s something about our age, though, because my younger brothers are much worse than me – they actually throw change away. “A penny saved is still just a penny” according to them.
Obviously I do not agree with or condone this viewpoint, but I do understand being frustrated with change rattling around in envelopes…
There’s GOT to be a more modern way to handle budgeting categories!
We gave up the cash system after about 4 months of trying it out as it was making our budgeting too complicated for us to want to follow. So for the past 7.5 years we’ve just been using our debit cards but recording category balances to maintain the concept of the envelope system. Our methods have ranged from little category sheets that we printed each month, to a nicely designed Excel spreadsheet, to an online finance tracker.
What I’ve been on the lookout for for many years, however, was the option to have a prepaid debit card devoted to each basic category. Certainly there would have been ways to make this happen before now, but they all seemed largely more trouble or more expense than seemed worth it, particularly the prepaid debit cards that all seemed to have bunches of obnoxious fees!
But think about how awesome it would be to load your card for the month and only use that for the given category. Sigh.
Enter the NO FEE prepaid debit card – FINALLY.
When I saw the Bluebird cards at Walmart I made a mental note to check them out at my earliest convenience/remembrance. Mom-brain that I have, that turned out to be a while later, namely, today.
It would seem that the cards really may be what I’ve been waiting for! Not only do they not cost anything to set up (if you get them online), but there are no monthly or yearly fees and you can even do sub-accounts.
- American Express is not as widely accepted as other card types.
- ATM fees will likely apply (but this seems unlikely to be an issue for us since we don’t like cash anyway).
- I’m not sure yet how well we can make it work with our current interest checking account required monthly credit transactions in order to get that interest, which of course we appreciate.
- I’m a little concerned about the freedom it looks like they will have with your information. Maybe it is just standard, but it feels like more than usual…
I am really happy that Mr D is taking over our the management of our finances this year. Up until now it just wasn’t really practical for him to do it since he had crazy hours at his day job for so long, but he is great with spreadsheets and little details and whatnot and I think he’s going to do a great job with it all. We’ll definitely be signing up for Bluebird and letting you know how it goes!
What does your budgeting system look like?