Two Years with the Envelope System

I started using the envelope system on my final payday of May 2014, a full two years ago now. It's also been a year since I last wrote about my trusty system.

When I started, I had 11 different envelopes and an understanding that my budget might change from where I started. A year ago, I had 19, which is what I still have today. My 19 envelopes are:

apartment - I use this envelope to buy home decor type things or other necessary items for around the house. Recently I bought pillows. Sometimes I'll treat myself to a new candle from Target. (When did I become obsessed with candles?!)

car - I use this envelope for minor car expenses. Things like windshield wiper fluid, an oil change, etc. If I have a major car expense and have money in this envelope, I'll put it toward that so I'm not completely dipping into savings.

Christmas - I use this envelope to save for Christmas expenses all year. I'd much rather set aside a small amount every paycheck than use an entire paycheck toward gifts and everything else that seems to pop up at the end of the year.

clothing - I use this envelope for clothes, accessories, shoes, etc. This one is tough for me because I shop online. However, I try not to spend more than what's in my envelope and then just deposit the cash into my account. "Try" being the operative word.

dining out - I use this envelope to go out to eat, drinks included. This envelope is actually the reason I started budgeting because I was so appalled by the amount I was spending to eat out every month. Some months I do alright, other months I don't. My biggest struggle is that if a meal is over maybe $15, I'll just use my card instead because I know it will deplete my dining out envelope so much.

entertainment - I use this envelope to see movies mostly, but it would basically be for any activity. Concerts (which is rare) or anything else that I might do with friends that costs money. (Hey, it's adventure golf season now!)

Europe - I use this envelope to put money toward my dream of visiting Europe. Sure, it's not going to be a quick gain, but last year I wrote that I wanted to visit Europe by the end of 2016. Well, it's only June 1st and I just got back from England. Granted, I fundraised for that trip since it was a mission trip with my church, but I had just enough money from this envelope for all the extra things I bought while I was there. So it's back to square one on this one. The dream is still real!

gifts - I use this envelope to buy gifts and cards for friends and family. There are plenty of occasions that I need a gift or at least a card, so there ya go!

groceries - I use this envelope to buy groceries, and sometimes to eat out. It's better to "steal" from another envelope than use my card, right?

massage - I use this envelope to save for the quarterly massage I get. My knee pain has turned into knee and hip pain, so it's easier to save up paycheck by paycheck rather than take a lump sum out of one paycheck every three months. It's worked out so far because it's made what some might consider a luxury a very affordable reality for me.

medical - I use this envelope toward copays and prescriptions. Occasionally I'll have a bigger medical expense, but being 25 and relatively healthy, that's few and far between.

miscellaneous - I use this envelope for other stuff. More often than not, it's used at Target. (I mean, I need that $50 picnic basket for two right?)

oils - I use this envelope to buy Young Living Essential Oils. I quit the Essential Rewards program a few months ago since I was buying oils for the sake of buying oils--and spending $50 a month doing so--but now I have some money set aside just in case I need to restock on an oil I already have or want to try something new.

salon - I use this envelope to get my eyebrows waxed and get my hair cut. 

Starbucks - I use this envelope to fund my terrible Starbucks habit. The worst thing about my job is the closest Starbucks is a 2 minute walk away..if that.

sundries - I use this envelope to buy things like shampoo, deodorant, tooth paste, etc.

Super Bowl - I use this envelope to hopefully fund my pipe dream of wanting to go to the Super Bowl. Or some other awesome sporting event, but probably the Super Bowl. And probably in another 20 years.

tags - I use this envelope to save for my annual car registration. It came in handy in March, but it also got more expensive with my newer car.

vacation - I use this envelope to save some extra spending money for vacation. The purpose isn't to buy plane tickets or something like that with this envelope, but rather accommodate for the inevitable extra spending that I'll do on vacation.

It's been a great system that has worked out well for me for the last two years. I really can't imagine going back. In May, I actually didn't even use my envelopes because I left for England the day after payday and never went to the bank when I got back. It's nice to be back on track this month because I feel much more in control of my spending and aware of the money that I actually have and that I can and should spend on any specific thing.

The challenge for me has always been to actually stick to the allotted budget, but I'm hoping that my lackluster month of May will help me get on track and stay on track. Discipline has never been my strong suit, but I guess it takes discipline to change that, right?

12 Months of Budgeting {No Looking Back}

On May 30, 2014, I decided to take a major leap of faith with my finances and start using the envelope system to reign in my frivolous spending and keep a closer eye on the money that goes in and out. I started with 11 different envelopes: car, clothing, eating out, entertainment, gas, gifts, groceries, personal items, salon, tags, and vacation. Today, I have 19 envelopes (2 of which are new this pay period):

apartment - I'm trying to start some kind of foundation of funds to buy "around the house" things. For instance, right now I'm saving up to buy new pillows for my bed. (And I can't wait! #YouKnowYoureAnAdultWhen)

car - I used this to save money to pay my mom back for a set of new tires, but now I just use it in case I need some minor things relating to my car, like oil changes (I buy the Jiffy Lube Groupon whenever they have it), new wipers, etc.

Christmas - I started out with a Christmas envelope, then switched it to include all gifts, but now that I'm at the point in my life where people I know have gift-giving celebrations all year 'round, I need to separate the two in order to accomplish my original goal: save money all year for Christmas.

clothing - Self explanatory. This is an area of difficulty for me though because I do a lot of online shopping and it's easy for me to get carried away.

dining out - Self explanatory as well. If I eat at a restaurant, I use this envelope.

entertainment - If I go see a movie, go to a game, buy tickets for something, or do any kind of activity really, I use these funds. Maybe it would be more aptly named "activities".

Europe - I decided this month that by the end of 2016, I'll have visited Europe. I just wanted to set a few bucks aside each pay check for that trip in order to make it a reality. Time to start planning!

gifts - With friends of mine getting married, having babies, and apparently having a birthday every year, I'd like some specific funds to buy cards and celebrate the people in my life.

groceries - Need I say more?

massage - Because I have chronic knee pain that doesn't seemed to be helped by anything but massage (oh darn, right?!), I've started getting a massage every quarter. This could also be accurately called my Treat Yo Self envelope. ;)

medical - If I have to pay a copay or buy a prescription or over-the-counter medicine, that comes from here, so it's really just small medical items. 

miscellaneous - This is just anything that doesn't fall under another category. The first major purchase from this envelope was my 2015 Erin Condren planner and it's almost time to buy 2016...I can't believe it!

oils - Since I've started using the Young Living Essential Rewards program, I have to place a $50 (minimum) order each month. Sometimes I go over, but I put $25 per paycheck in this envelope to cover that. I just deposit it the day after my order is processed since it's through my card online.

salon - I get my eyebrows waxed once every four weeks and my hair cut once every twelve weeks, so I added up how much I would spend throughout the year and divided that by 24, the number of times I get paid per year.

Starbucks - Yeah, I have this terrible Starbucks habit, so I try to refill my reward card with this money. Thankfully it has slowed down how frequently I go to Starbucks. Sometimes I just find myself there; I can't help it!

sundries - I use this envelope to buy things like shampoo, deodorant, tooth paste.

Superbowl - What the heck, right? Well, it started as a deal between my ex boyfriend and me. I told him I would buy him tickets to the Superbowl the next time the Bears went. Well, since the Bears were absolutely atrocious last season, I only put $5 per paycheck in this envelope. After we broke up, I decided to keep the envelope because, heck, I want to go to the Superbowl sometime! (And hopefully see the Broncos beat the Bears, ha!) If that doesn't happen, I at least have additional savings. But it's happening. Or maybe this will be my "see Aaron Rodgers play at Mile High" envelope. November 1st can't come soon enough.

tags - Car registration! Everybody's gotta do it once a year. I just divided the cost of mine by 24 and save a little bit each paycheck so every April I don't have a "big ticket item" that I would inevitably forget about every year.

vacation - I use this envelope to save some extra spending money for vacation. The purpose isn't to buy plane tickets or something like that with this envelope, but rather accommodate for the inevitable extra spending that I'll do on vacation.

So you can see that some envelopes are spending envelopes and some envelopes are saving envelopes. I especially like the saving envelopes because it helps spread out the cost of things that I'm going to spend money on either way. I don't want to be one of those people who is stretched thin over the holidays or has to dip into savings to cover things like tags for my car.

To say that my life has drastically changed in the last twelve months would be an under statement. I can't even imagine going back to swiping my debit card for everything. Sure, it's a bummer to lose out on reward points that my bank offers and it's obviously not as simple--or even as safe--as just carrying plastic, but it's given me so much peace of mind when it comes to finances that it's absolutely priceless to me. And for the record, I've only left an envelope at one restaurant once in the last year, but I got it back (thank goodness) so it was fine.

Getting a hold on my spending has revived my finances, to be honest. I'm better about saving. In fact, my savings account is bigger than it's ever been. I'm better (right now) about spending on my credit card, although that always seems to come in waves. But I feel like my finances are manageable and not something that needs to keep me up at night anymore. And yes, I've actually been there...more than once. When people see me using the envelopes, they almost always ask me questions and I would recommend it to everyone. The cashier at Trader Joe's and friends alike! (I really am trying to convince this guy who works at TJ's to use them since he always asks me about them when I'm in there buying cookie butter and jalapeno Greek yogurt dip.)

Right now, the majority of my finances are handled through this envelope system. I have auto-pay set up through my bank to pay for my car insurance and my tithing. (I used to have it for my car payment, too.) My IRA payment and phone bill come directly out of my paycheck. I always use my card to buy gas. Outside of those typical "bills", I'm back to using cash all the time.

Read more about my year of budgeting:

The Envelope System | Budget Update | Going Forward with My Budget | Budget Struggles | Four Months of Budgeting | 30 Day Spending Freeze - A Budget Update | Budgeting Through Christmas

Do you have any budget tips or tricks to share? 
What works for you?

Budgeting Through Christmas

I've now been using the envelope system to budget my money for six full months. Unfortunately, I've missed the mark in terms of debt pay-off goals for 2014, but I did meet my savings goals. Fortunately, Thursday is a new year and with it comes new opportunities to save and become debt free. I've decided to set new goals for 2015, starting where I am now so I don't have a continued sense of failure every time I crunch the numbers at the end of the month. 

Before I go on, let me just say: Don't spend aimlessly on a credit card. While it might seem like "free money" at the time, it's actually more expensive money thanks to a little thing called interest. I'll acknowledge that my credit card debt might be a fraction of other Americans', but not one penny was worth it. It's easy to get caught up in "needing" this and "needing" that, especially in the world of blogging and social media. But you should never spend above your means. Credit cards aren't a terrible thing. It's a good way to build credit, but if you want a good credit score, pay off your bill in its entirety each month. That's a good way to keep yourself from spending more than you can afford. My bank offers more rewards points for spending on a credit card than on my debit card, so it wouldn't be a bad idea to use my credit card if I were immediately transferring the exact sum and keeping my credit card balance at $0.00. That's not what I was doing and I have since found myself in a hole I don't want to be in. By all means, use me as an example. Don't spend above your means, especially on a credit card.

I think December has been my biggest test of my budget so far. I have an envelope specifically for gifts, but by the time December rolled around, it wasn't as full as I had hoped (or as it will be next Christmas). Luckily, my dad's side of the family has decided to make last year's Ivory Elephant a new tradition, which has cut down on all our spending. Instead of doing a typical White Elephant, we buy something people will actually want and use, so we just have to buy one gift! I had to dip into some other funds to cover some of my Christmas gifts, but I was able to keep the total spending fairly low between going in on gifts with other members of my family, shopping the sales and with coupons and discount codes, utilizing free shipping opportunities, and buying some gifts early.

But of course Christmastime also comes with an increase in activities. Now that I look back on the last month, I'm sad that I spent so much time working and wasn't able to participate in some of the things my friends and family did or even have more nights at home just to watch Christmas movies and relax. I was still able to do plenty, but it has certainly been a busy season. Because November was also extremely busy for me, I wasn't using much of my entertainment envelope, and I had some extra cash to spend this month. That helped me not feel overwhelmed when it came time to pay for some seasonal activities. I also instituted a 30 day spending freeze after Thanksgiving, but that was mostly to keep myself accountable and not grab something from Chipotle or Chick-Fil-A on my way home from lunch. I wanted the money in my eating out envelope to be strictly for going out with friends and not eating take out on my own. I'm actually really proud of myself because I mostly did it. I completely forgot about it while I was in the drive-thru at Chick-Fil-A one day and it was too late to turn back.

Now that the holidays are over, I'm pretty pleased with the amount that I spent, because I don't feel like I'm in any worse shape financially than I was before the holidays. In fact, I'm feeling pretty good about finances and about continuing with my envelope system through 2015. I honestly cannot imagine going back.

The Envelope System | Budget Update | Going Forward with My Budget | Budget Struggles | Four Months of Budgeting | 30 Day Spending Freeze - A Budget Update

30 Day Spending Freeze - A Budget Update

I haven't written an update on my budget since September, so I thought I'd share what's been going on. (You can read my previous five posts about my budget, listed at the bottom of the post.)

I'll be the first to admit that budgeting is a struggle. The struggle is real, people. I've had lots of successes and lots of failures since starting my budget with my last paycheck in May of this year. Despite some major spending fails, I've still saved myself a noteworthy amount of money. I've also learned a lot about myself, about self-control, about organization, and about money management in general. One of my biggest goals is to enter into a marriage debt-free with money management skills and I'd say it's never too early to start (because I'm not getting married any time soon). The things I'm learning are meant to become life-long habits, but sometimes that can be a slow and painful process.

So let's start out with a win. I bought my car in March of 2012 after my first car died. It was the first grown up purchase I had ever made and it was the first time I had real adult responsibility when it came to money. I was approved for a 36-month loan and for the last 32 months I've been slowly chipping away at it, always paying more than the minimum payment. I'm so happy to report that I sent my final payment last Monday and I now own my car outright! I feel like a real live grown up. My goal is to drive this car through 2015 and start car shopping again in 2016. Here's hoping ole Rosie lasts that long because she's already at approximately 220,000 miles. (We'll see!) It would just be absolutely wonderful to not have to worry about a car payment for a full 13 months! That's the dream, isn't it?

Onto this spending freeze! If you haven't checked your calendar, Christmas is 30 days from tomorrow. What a strange time to embark on a spending freeze, right? Well I'm vowing to freeze all spending on myself for the next 30 days. That means no more clothes shopping. No more little unnecessary purchases here and there. The question is: Should that include eating out? What do you guys think? What about if some friends are home for the holidays and want to go out to dinner or something? I'm thinking it should only include individual eating out (like stopping at CFA on my way home for lunch because...waffle fries). This is the time of year when I want to focus on giving to others and helping others. So naturally I'm still going to do my Christmas shopping, but nothing for myself. I'm curious to see where this will take me over the next 30 days.

The Envelope System | Budget Update | Going Forward with My Budget | Budget Struggles | Four Months of Budgeting

Budget Struggles

Today is my fifth payday on the envelope system. In the last two months, I've been a lot more conscious of how I spend my money and I've been spending a fraction of what I had been accustomed to spending, but couldn't necessarily afford.

This last month, however, was a lot more difficult than June. When I added up how much I had spent through July 21st, I was only one quarter shy of what I had spent through the entire month of June. In other words, I was on track to spend a bit more money that I had spent the previous month, especially since I was going on vacation to New York City the last week of the month. However, $130 of that was spent on clothes, whereas I didn't even spend $60 on clothes in June. I acknowledge there were some contributing factors for the increase in spending: Fourth of July and some birthdays, catching up with friends (over a meal or drinks), and starting to date a little bit. But those are times I need to balance with less frivolous spending. What really got me, though, was buying two new tanks at the Pure Barre studio. Did I really need the same tank in both colors? Probably not. I truly didn't need either of them, but I bought them both and I love them both. And that's why I budget for clothes.

Then I went to New York City. I didn't want to return from my trip wishing I had done things that I didn't actually do, so I tried not to hold back. I ate out every meal (but didn't really eat before noon any day I was there) and even though I stumbled upon some more expensive restaurants, I also ate lunch for $2.75 one day. And it was delicious! Anyway, now that my trip is over, I feel like I only wasted $40. That breaks down to $17 on food and $23 on transportation. I shouldn't have stopped at Chipotle on my way to the airport or bought a $7 side of breakfast potatoes, especially after I was stuffed from the most amazing pancakes in the world. I should have just bought an unlimited MetroCard the second I left the airport instead of buying a $10 card and then purchasing the 7-day $30 unlimited card the next day. And I definitely shouldn't have taken a cab when I was only 1 block from a subway station and didn't know it. But, you live and learn. And in the grand scheme of things, "wasting" $40 isn't the end of the world. I do wish, however, that I had spent less money--especially on eating out--leading up to my trip.

I do have a "vacation" envelope that I pay into each month. Unfortunately, since I only had 4 paydays between starting the envelope system and going on vacation, it had only accrued $40, but in the future, it would be much more beneficial in subsidizing some of those costs on vacation.

Money has always been important to me. Ever since I got my first real job--and before that when I was babysitting and earning allowance--I felt that it was necessary to spend my money. I had to get a job in order to get my driver's license, so I spent money on gas. But I wanted to be cool and go out to lunch with my friends or just be social in general. That meant spending money a lot of the time. Money is important to me in a different way now. I want to change the way I think about money and focus more on long-term goals and plans rather than not being able to tell myself no when I get a craving for Chipotle. (I seriously used to go to Chipotle like four times a week in high school. Back when you could get a steak burrito for like $6 though.) I want to be able to start my life with someone debt-free. I don't want to bring financial baggage to a marriage and I would hope my future husband feels that same responsibility. I want to buy a house someday and get a new car and I want to continue to have a good credit score. None of those things will be helped by frivolous spending and even though those things seem so far off into the distance (I seriously don't even want to look for a new car until 2017 just to prove my mom wrong), I will feel very silly if one day I can't afford something major in life because I ate at Chick-Fil-A ten times a month.

I'm hoping that August will be a little bit better in terms of spending less. Despite the increase in spending, I was still okay percentage wise. In the first week of the month, I spent 64% of what I had spent the previous six months. (Including June in the average dropped each figure significantly.) In the second week, I spent 52% of what I had before. In the third week, I spent 69% of what I had spent before. In the fourth week, I spent 231% of what I had spent before. And for the month total, I spent 104% of my average spending for the previous six months.

Needless to say, August is going to be all about getting back on track with my budget and "recovering" from that vacation spending. I'm happy to have come home with memories and maybe fewer dollars in my pocket than clinging to those bills and sacrificing experiences that I could have had while exploring the Big Apple.

Read my other budget posts here:

The Envelope System | Budget Update | Going Forward with My Budget

Going Forward with My Budget

To say that being on a budget this last month has changed my life would be an understatement. I can't even imagine going back to my pre-budget days. Sure, it's still an adjustment to not just swipe my debit card each time at the cash register, but I'm slowly getting used to using cash and I definitely value each dollar I spend more than I used to. My biggest issue before was that I thought I could keep a running total between pay days, but I would fail miserably. To be honest, I would frequently dip into my savings. Maybe even just $50 a month, but that adds up quickly! Before, I would just move over to credit cards and use those when my "cash" ran out, and I'm literally still paying for that mistake today.

Using the budget has changed my thinking about money all around. I've upped my car payment (starting in May) so that I'm now paying about $35 more than the minimum payment, compared to just $10 a month extra that I was paying before. With that extra $35 a month, I might be giving up a new blouse or one or two meals out, but I'm going to have my car paid off in December 2014 (with a very small final payment), which is about four months early. That's really exciting to me!

Every time I think about my envelope system, I think to myself "why haven't I been doing this all along?" It makes me sad to think about how if I had been smarter with my money since I got my first job in 2007, I would have a cushy savings account and most likely be debt free right now. But I'm doing it now and that's better than waiting a few more years, or even a few more months. Right now, I've cut WAY back on eating out. I hardly shop any more and now I'm saving up for items that I truly do need/need to replace. I like it this way.

Because of my new budget, I've been looking for ways to save money on the things I am buying. I downloaded the Cartwheel app for Target and lucked out when they had a deal on toothpaste and some other "medicine cabinet" items I needed. My biggest struggle with Target has been whether or not to use my Red Card. I want to save the 5%, but it seems like too much of a hassle right now because I'll have to go to the bank after and deposit the cash from that envelope back into my checking account. (Any one have a system for the Red Card already?) I've also found it a little tedious when I need a few groceries and, say, toothpaste. I have to check out twice, but I've been making separate trips or going to different stores, so I have encountered that yet. Anyway, I also use rewards programs, like the Regal Crown Club Card. I only go to movies on days when it's $5 and I use my card so I can collect the points for free movie tickets and discounted concessions.

This will be my third pay day using the envelopes, but I'm making some changes. Starting this month, I'll keep the money budgeted for gas in my checking account and use my debit card to fill up my tank all the way. I've also cut my budget for clothes in half since I'm just not shopping that much right now. I don't want that money to just go unspent, and I don't want an excuse to shop just because I feel like I have to spend it. I'm also going to really try to remember to get receipts. Some places don't offer them when you use cash and I'll forget to ask. I also want to start keeping receipts organized by envelope, rather than by month like they are right now.

I've been keeping some stats about my spending in June versus the first five months of the year. I compared each week to the average of the previous five months. Week one, I spent 45% of the average of what I had been spending. Week two, it was at 55%, but week three it was down to 41% (and I actually spent the month money that week). Week four, I spent 14%. (I seriously only spent $27! $23 on sushi, $4 on a ticket to a Rockies game.) Throughout the month, I spent only 39% of what I had been spending earlier this year. What a change!

Budget Update

So I'm a little over two weeks into my new budget. I've decided to "pay myself" with my envelopes every pay period. It makes it a little difficult since some pay periods are longer than the others, but I'm trying it this month and I'll tweak things from there if needed. For instance, I have to go back to using my card for gas after this month. It's just so easier for me to keep track of (the light doesn't work when I'm low on gas) and I like filling up my tank completely. Some months are different than others and I'll use more or less gas, but it's usually in the same ballpark each month. Gas was the first of my spending envelopes that I emptied, but I had enough gas.

I was curious to see after one week how my new budget affected my spending habits. Since I've been tracking my spending for a while now, I added up how much I spent on "extras" in the first seven days in January through May. (Extras would be things like eating out, shopping, etc.) When I compared that to what I spent the first seven days of June, I was shocked. I spent 45% of my average spending from those first five months.

The first week was definitely an adjustment. I'm so used to swiping my debit card and now I'm having to count out bills and coins. In fact, I was at Chick-Fil-A and gave the cashier 35 cents when it was 34 cents. She asked me if I wanted my penny back and I practically exclaimed YES! I don't want to start counting pennies, but in a way, I am. Every penny counts in a budget!

I decided to add another envelope--miscellaneous. I guess this will just be a catch all for my other purchases because it dawned on me that I needed somewhere to get money for the random things that don't fit into the other categories. I want to start sending people notes and cards just to say hello or for their birthday and I need an envelope for that. I want a the new Pure Barre tumbler (mostly because it will fit in my cup holder) and I don't have an envelope for that. You get it, it's just for things that aren't clothes or food basically.

So far, I think the hardest thing for me has been the envelopes that I haven't been using as much. When you budget, you have to think in terms of the future and not just the here and now, so that's certainly an adjustment. I gave myself an envelope for clothes and I did actually buy two pairs of sandals from Target this month (thank you buy 1, get one 50% off sale!), but I haven't been shopping a whole lot lately. I know that there will come a day when I need something or I really want something, but right now that money is just sitting there not being used. (And I could have drinks on the patio with that money!) That could possibly be a sign that I'm giving myself too much money for clothes each month, but June is just a trial run and I'm willing to move some numbers around after the first thirty days.

I have to admit that I went to two different restaurants within the first week with my debit card in my pocket, with every intention to spend off the budget. The first time, I was meeting a friend at Chipotle who had said he had a two-for-one coupon. I wasn't sure how the payment of the "one" would be, so I had it just in case. He ended up paying for it. The second time, I went to brunch and took my card because I knew my individual tab would be around $30 (thanks to $13 bottomless mimosas!). Even though I had plenty of money in my dining out envelope both times, I still took my card. I think the second time I was concerned that I would use the rest of the money in that envelope and still have 6 days left. Once again, someone picked up my tab and I didn't actually use my card, but I need to stop doing that. And interestingly enough, I ended up with nearly 1/3 of my dining out cash still in the envelope by pay day!

The Envelope System

Last week I saw a tweet from Jamie about the envelope system she and her husband use to budget. After a few more tweets, I was directed to this post by Victoria that broke it all down for me. I thought about it for a while, and that afternoon I started mapping out my finances a little bit and what the envelope system might look like for me.

I started with how much I make each month and subtracted some of my bills that are on auto-pay (car payment, car insurance, phone bill, etc.). The number I came up with was the number I used for my envelope system. Instead of going weekly with the envelopes, I'm just going based on my 2 pay checks each month. They're the same amount, so it was easy to designate dollar amounts to each envelope. The only hurdle I can imagine is that some pay periods are longer than others. We'll see how that works out. At first, I came up with 9 categories, but I later added 2 more (tags and vacation).

car

Christmas

clothing

eating out

entertainment

gas

groceries

personal items

salon

tags

vacation

I used Victoria's categories as a jumping off point, but I spent some time going over how I spend my money month-to-month. This year, I've been using an Erin Condren Life Planner and it's been a godsend. Each month, I use the monthly page to track my purchases. I list where I spend my money with both a daily and weekly total. At the end of the month, I add up all my "necessities" and all my "extras". So I picked these nine envelopes to start with my trial run in June.

CAR - As Victoria explained, they put away enough money to stay on top of their regular oil changes and other car expenses. I think this is a category I'll need to reevaluate after using this system for a few months, but it's always nice to have some money set aside for a specific thing. Right now, I already need an oil change and a new set of windshield wipers for my car.

CHRISTMAS - Every year when Christmas rolls around, I always wish I had saved a small amount of money each pay check to create a cushion for the Christmas gifts I purchase at the end of the year. Too many people are stretched too thin around the holidays and I've been one of them for too long. For instance, even setting aside $10 a pay check (if you get paid twice a month) adds up to $240 by the end of the year, which is a nice place to start and you're really only giving up one lunch out or two trips to Starbucks.

CLOTHING - For lent, I gave up shopping and I did a pretty good job sticking to it. I haven't actually shopped much since Lent ended either and it feels good. I truly spent too much money on new clothes, focusing more on having the latest trends and fashions, rather than creating different looks from the pieces I've already own. I've done too many major closet clean outs recently and if you're getting rid of dozens of items and still have a full closet, it might be time to cut back.

EATING OUT - At this point in my life (I'm afraid to say), too much of my money goes to eating out. Ever since I discovered how amazing everything at Chick-Fil-A is, I stop there for lunch all too frequently. It doesn't help that it's smack dab in the middle of my commute from the office to home. But eating out lunch multiple times a week adds up quickly these days, and that doesn't include special dinners out or random outtings for froyo. Honestly, the amount I was spending at restaurants was the biggest motivator to create a budget and stick to it. The amount I designated for eating out each month is about 50% of what I had been spending. This envelope will definitely be the biggest test of my determination to stick with the budget.

ENTERTAINMENT - It shouldn't come as a surprise that I love going to movies. This is where that money is going to come from. Things like baseball games, concerts, and other activities of the sort will come from this envelope as well. Of course one month may be slower than another, so it will be good to "roll over" some of that money to use it on something with a bigger price tag that I really want to attend. Now I just have to decide if the popcorn at the movie theater will come from eating out or entertainment!

GAS - This is pretty self explanatory. I tracked how much I've been spending on gas in January through May and created kind of an average number to use in a month. I may have to adjust it, but we'll see. This one is going to be tough for me because I'm so used to swiping my card at the pump. When you pay cash, you give them a set amount beforehand and that's how much gas you're going to get. I like to fill my tank up completely, even if it's a random number like $49.67, and I won't know how much money will get me a full tank. The biggest problem I see with this is my gas light on my dashboard doesn't work and I usually go by how many miles I've driven on that tank (especially when it gets around E). I'm willing to test drive (HA!) the idea for June, but if I get stranded on the highway with no gas, I'm going to have to go back to using the card and maybe just being conscious of how much I'm driving to help stay around the budgeted amount instead.

GROCERIES - This is self explanatory as well.

PERSONAL ITEMS - This is going to be the money I use to purchase basically toiletry/sundry items. Usually I just toss them in the basket at the grocery store, so I haven't really kept track of how much I spend on those kinds of things and how frequently I purchase them. Also, I usually take advantage of the deals at Target on items like deodorant and tampons. Sometimes if you buy a certain number, you get a $5 gift card. Why not? Those things don't expire! So I may need to reevaluate this number as well, but we'll see how it goes for now.

SALON - I absolutely cannot stand to have my eyebrows plucked, I have to get them waxed. I get my eyebrows waxed once every four weeks and since my childhood friend just got a job at that salon, I've decided to actually start getting haircuts on a regular basis, every eight weeks. This one was actually a little tricky. I figured out I get my eyebrows waxed 13 times a year and I'll be getting a haircut 6.5 times a year. I took the amount I spend on each service (tip included) and multiplied it by how many times I pay for it to get a total number, then divided that by 12 to find out how much money I need to set aside each month. 

TAGS - I added tags after I spent some time thinking about Victoria's categories. I actually just paid for my car registration in May and while it wasn't a devastating amount, it was missed. The tags for my car right now allow me to set aside a very small amount per check that will add up and cover the cost when the time comes each year.

VACATION - This isn't meant to cover the cost of airfare or hotels. This is just going to help me collect some extra cash to spend for when I do go on vacation. I'm going to New York this summer and while I won't have built up a huge foundation of money by then, it will be nice to have just a small amount set aside to spend while I'm there. It's a lot easier for me to save than way rather than thinking "No, don't go to Starbucks today so that I can get a cupcake from a fancy NYC shop in a few months" or something along those lines. If I had been doing this all year, it would probably help me out significantly so I wouldn't blow a whole pay check on a few days of vacation.

I went to the bank after deciding on my 11 categories to get the cash. I know it won't be a hassle next time, but it definitely was this time. I swear I met a banker who couldn't do addition or count money. At home, I had indicated how much money I was putting in each envelope, then determined how many of each of the bills I would need. I made a note and then headed over to the bank. I told the teller I needed to withdraw X amount and then this is how I want the bills to break down. I'm not sure what caused the error, but she said "Okay, then a hundred?" I told her I didn't want a hundred dollar bill and if the math was off, I apologize, but I need this many $5's, this many $10's, this many $20's. That was the important thing. She got all flustered and confused before I just took out my phone and added everything up again to make sure the total amount was correct, which it was the first time. She had some difficulties counting the money as well since it has to be counted three times, but her supervisor came over and everything went smoothly after that. I know it's not going to be like this every time, it was just a strange occurrence.

I'm using June as a bit of a trial run. I know I need some sort of budget and I think this will be a good fit for me, but I'm a little nervous as well. Luckily, when I finished dividing the money up for the envelopes, I still had some left over, so I can make some changes next month if need be. I like Victoria's idea of over-budgeting rather than under-budgeting. I know myself and I know I would be really discouraged if I was spending "too much money" each month because I was setting unrealistic goals for myself. Jamie also suggested moving my debit card to a different place in my wallet as a reminder that I'm using cash now and not the card.

I truly think this will be a good change for me. Spending money via debit card makes it way too easy to spend money and harder to think about the value of what I'm buying. You just don't have as much of a grasp of that when you never actually see the money change hands. I'm already on day four and I consciously spent less money this weekend than I normally would. I made a trip to the grocery store and gas station after going to the bank on Friday and I went to the movies on Sunday, but I made sure to go when tickets were $5 and didn't stock up on junk food at the concession stand just because.

 My new kitten with my new wallet! (No idea why he's sleeping like that.)