Monday, January 9, 2012

Envelope System

About ten years ago Scott and I set a lofty goal for ourselves. We were determined to pay off our house. Early. Like twelve years early. What possessed us to do such a thing you ask? Well, we were simplifying like crazy. I was able to research all sorts of savings. We made things from scratch. We made bountiful quantities and froze them. We lowered the heat. We used the air conditioning sparingly. The clothes line was always in use. And do you know what? We had a bunch of money left over at the end of the month.

Now some may say spend it! Upgrade in house, car or vacation. It was tempting for sure. But when we got down to what we really wanted to do it was simple. We wanted to live a debt free life. We were so close we could almost touch it. So we came up with a plan. On pay day we would pay all of our bills. We had divised a budget. Scott is a whiz at budgets. So with our combined talents we came up with a cash only envelope system. We didn't invent the envelope system, but we refined it to our needs. After paying our bills, we deposited money into three envelopes. The categories were, groceries, auto and entertainment. We used cash only for these purchases. If I went to the store, I took the envelope with me. Upon returning home I would record my purchase on the outside of the envelope and subtract the amount from the total. As a back up I would place the receipt in the envelope. You get the idea.

In the meantime we had been paying much more down on our mortgage payments. We used all rebates, tax refunds, money from selling things (garage sales, etc.) to also pay down our mortgage. We also put money into savings regularly. And here comes the extra benefit of the envelopes. We always had money left over in our envelopes at the end of the pay period. Guess where that money went? Yep, the mortgage.

We never felt lke we were deprived of anything. We ate well. We had people over for dinner. I would make the main course and when our
guests offered to bring something we would take them up on it. Our dinners became potlucks. Our friends did the same. We always had plenty of clothes. In fact we prefer to buy quality over quantity. Our clothes last, so fewer purchases. Bulk cooking was mentioned before,
but it also became our favorite gift to give. We found Scott was actually the better shopper. He would comparison shop and save us on
average ten to twenty dollars per grocery shopping trip compared to me.

This is an attainable goal. You may feel pinched in these economic times, but there always seems to be a way to save a little. And we are
proof that saving a little adds up to a lot. The mortgage was completely paid off when we were thirty-five and thirty-eight. That's a goal worth reaching. And it all started with three simple envelopes.

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