Budgeting Basics: The Envelope System

I'm guessing in almost every couple there is a saver and a spender. But my husband and I like to do things together - so when we're saving together it's great - but when we're spending together, watch out budget! Somehow having the other person there with you makes it seem like it's ok to cross that budget line. And it's always big stuff - like vacations! Of course now we have a vacation "envelope." Back in the olden days of our lives we would just go on vacation and figure out how to pay for it when we got home. We were very spontaneous with our weekend getaways, making memories and leaving a trail of debt along the way. Eventually we received a wake-up call. It doesn't take more then your credit card being declined at the grocery store to put things in perspective. We had to start living within our budget. 

My husband read Dave Ramsey's book Total Money Makeover. The first thing he tells you to do is write down your monthly income then list all your expenses. "Give every dollar a name," he says. When you first do it you may find out you're living beyond your means. For most people it's a fancy car with a payment that crushes their budget. For others it's a love of shopping. For us it was a little of everything, but mostly it was lack of any sort of budget. As soon as we started tracking our dollars, we wanted to be able to control our dollars. We used the "envelope" system. You literally put cash in an envelope that is labeled with that Dollar's name. For instance, "Food."  Clothing, entertainment, gifts, kid's activities - anything you spend money on over the month gets an envelope. The vacation envelope is important to us. It's not essessial to most, but to us it means time together, time with the kids, time away from all our work worries. If we have to cut back on spending in another envelope in order to go on vacation we will. We consider it a priority. When I pull up to my daughter's school in my 2002 mini van that looks like the ugly duckling next to some of the other parents' cars picking up their kids, I remind myself that driving it means I get to go on vacation,  and that makes me smile. 

But recently I had to go back to basics with my clothing budget. I had been using the YNAB app (You Need A Budget) which is great, don't get me wrong, especially for more complex budgets, but I was putting clothes on credit cards instead of taking the cash out of the envelope, which allowed me to overspend one month, taking me into the negative for the next month. I went over the last two months. Perhaps it was my Back to School shopping Saga at Justice or my shopping spree at Goodwill when everything was 50% off. I always say that the occupational hazard of working at Old Navy is the temptation to buy! Either way, I went over. So now I have to put the clothing cash in the envelope. And you know, now that it's cash, I don't want to spend it! There's something about it being cash that makes me almost afraid to spend it. I know when it's gone it's gone. That's why Dave Ramsey is so anti credit card. He knows that people will spend more if they have a credit card then if they're paying cash.  So if I want something at the end of the month or if Old Navy has a big sale, I know I want to have that money to spend. I think this is part of the beauty of the system. Half the battle of budgeting is mental. Getting yourself to curb your spending and ask yourself: "do I really need this?" I've listened to Dave's podcasts and heard him argue with someone about them using a credit card to earn points ( or miles, or whatever). His main point is that when you don't have to pay for it right away, you are tempted to just buy it, and figure out how to pay for it later, leaving a trail of debt along the way. And I don't want to go back to that trail ever again!

The Saga of Back to School Shopping

With every great summer staycation there always comes the inevitable: Back To School Shopping! I think I feel it a little bit more then most, since I'm right in the middle of it at Old Navy. Before school is out for the year, I am planning for it, with hiring and marketing. As soon as the last school bell rings, we are getting in backpacks and uniforms. Before I can get to the beach for the first dip of the season we are hot and heavy with the kids denim sale. And so this is how I get carried away with the whole BTS shopping extravaganza. I see people shopping and buying mass amounts of clothing for their children and I think to myself: "my kids must need clothes too!" Of course they do not. Every time something cute goes on sale I buy it, since its "practically free" with my discount. So you see, my kids do not need clothes. And if they ever do, they get them from Old Navy. I shop on my break and come home with bags of "surprises" for them to dig through. I would never buy clothes from anywhere else. Or so I had always sworn. Last week a family was checking out at my register, with a huge purchase of kids clothes, just like everybody else. I noticed  the little girl's outfit that she was wearing was not from Old Navy but was very cute indeed, so I asked where it was from. "Justice" the mother replied. "Oh, I never shop there. Too expensive," I replied. "Not today," she encouraged, "they're having a great sale. It's practically free." Hmmmm. Practically Free, I thought. Just like with my discount. Could there be some other place to shop and get great deals, other then Old Navy? I'd better check it out on my break. And so I did. At first glance it was a great sale. Everything was 50% off. But a second look at each price tag told a different story. These clothes were higher priced then anything I would ever even buy for myself! I wanted to turn and run out of that over-priced glitter ladden tween store. I should've. But then I saw the clearance racks. I LOVE CLEARANCE! And so I picked out a few cute tops for Jaidyn. She would love all the sparkles, glitter and layers. They were  marked down to slightly more then I would pay at Old Navy. I can just return them. I'm sure I'll return them. Well since I'm returning them, I may as well look at the jeans. She won't wear ON jeans, the waist is too uncomfortable. I found a stretchy, glittery pair with a soft banded elastic waist. They looked like they would fit. All three shirts would go with them as well. Of course that didn't matter, since I was planning on returning them after I bought them.  The jeans were $46.00! So at half price I was still paying $23. Way more then I ever pay for jeans for myself. I felt nauseous as I paid $53.00 to the cashier and walked away from the store with my tiny little bag containing three shirts, the over-priced, over-glitterized jeans and a couple of coupons the cashier had given me, to entice me to come back again and shop their "sale." 

I had almost convinced myself to not show Jaidyn the clothes. Just leave them in my locker and return them the next day. But something about having a cute "first day of school outfit" and knowing she would love the bedazzled clothes urged me to bring the Justice bag into the house, against my own better judgement. Deal done. Everything fit and looked cute as a button on her. She did little runway poses, pairing each different top with the trendy skinny jeans. I put the clothes away and told her we may return them still, but either way, she could not wear them until school started. "But mommy," she complained, "I always tell my friends you buy my clothes at Old Navy. These are my first non-Old Navy clothes! I can't wait to tell my friends that they're from Justice!" Those are the words I have been dreading to hear for years. It's the beginning of "girly problems" and worrying about what other people think of you. It's the start of shopping sprees and matierialism. I just want my daughter to wear budget-friendly, pay-with-cash, still very trendy (and sometimes glittery) clothes. I started something that I don't want to finish. Where's the Justice in that?