Monday, May 4, 2009

The Freedom in an Envelope

I have to write about a new practice we have put in place for our finances that has been an amazing idea. Really, it's not a new idea at all. We first read about it when we were getting ready to be married 6 years ago, but for some reason, we never tried it until a few weeks ago.

We've made loose budgets, been frugal, and seen the Lord provide in incredible ways. Yet, we were feeling overwhelmed with the lack of real structure in the way we spent our money. When I feel insecure about finances, I tend to pull the purse strings tighter and not spend on anything, even things we might need. After some feelings of being a little overwhelmed, Gerrad and I decided to really sit down, make a realistic budget, and set some financial goals. One tool we decided to implement is the envelope system. It is the idea of setting aside a certain amount in different categories and literally placing the cash in an envelope. When the amount is gone, you don't spend more unless you rearrange the other envelopes. We decided not to do this with bills or groceries as it is a little bit of an inconvenient way to pay and keep track, but when it comes to other categories, like dining, gifts, entertainment, extras, etc. , it has been awesome. I feel so much freedom to make the purchases we need to, as well as do the things as a family we need to in order to relax sometimes. We squeezed 3 meals eaten out( a definite rarity) last week during sickness and extreme busyness. We spent only what was in the envelope, because I knew how much to spend in order to not go over. It was such a blessing.

As the weeks go on using this method, I'm amazed at how much stress it has relieved, and we are also really seeing more progress in our financial goals too.