Saturday, April 13, 2013

How to budget for cash envelope system

How to budget for Cash Envelope system (using an accordian mini file from SOLO)

Hello Everyone,

Like I mentioned in my post " Buy Less Buy Better" I am a big follower of the Cash Enevelope system. Its Simple and effective.

For my readers who might not know what it is, here is a brief
Read Up.
I am a big fan of Dave Ramsey.

Getting back to the title of this post, I have managed to reach financial peace using this system.

So, I decided to share my version of this concept. I am not comfortable carrying a lot of cash on me. I have an outdoor kind of job and carrying cash will be more stressful than ease.
My salary comes on 28th of every month. Me and my husband have self assigned responsibilities in our home expenses. So I take care of the monthly home expenses and my husband takes care of our home loans etc.

So, my cash envelope system is refering to my expenses only.
I use 2 expandable( accordian) files. One for our home Expenses and one for personal expenses. ZERO balance is the aim. So , I make sure all the money is categorized to the last rupee.

In this blog I have pics of my folder. Our home expandable file is pretty much the same but its Green in color.

The Categories in my home file are:

Emergency Expenses
Guest expenses

These are pretty standard. I found this amazing set of accordian files from Starmark in Kolkata(where I live) for Rs.55 per file.

So a steal!!!

My personal expenses are meant to make sure I on a personal level also stay on budget.

Its in this babiest pink !!!  of color.

The Expandable file  is in this cute pink color. Its perfect. I do not carry this around in my purse. I divide and conquer my finaces. I categorize my expenses. The categories are as follows:

I know I know you must think that why would you need to buy shoes and Bags everymonth. This is important because while I might not need to buy them every month I still save for it. So when I do have to buy its not over my budget and since I have saved I can buy good quality.All the unused cash goes into my savings in the begining of the next month. I take the saved amount to my bank and deposit it.Its not a hassel. It actually is so satisfying to save. Trust me...

I also save the reciets of any purchases where I might need to exchange or is required for warranties.
So I save a clear lock pouch. It keeps the reciets safe and in one place. So, this is in the blue clear bag.
The categories mentioned are as per my use and spending, I make sure I stick to the cash in each category. The conveyence is my everyday expense.  Cosmetics include my Beauty salon Expenses also.  I do save for Books. Bit of a book worm. Home Decom includes little repairs or replacement around the home.

No borrowing from other categories. If the money is spent its spent. It was so hard in the beginging. But now its the rule. My husband also mananges his money responsibilities using a similar system. More on that later.
So I am your happy camper with financial peace of mind. 

So Happy Organising.
Love Harini

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