Budgeting: Envelope System

One of the things Dave Ramsey talks about in his book The Total Money Makeover is paying cash for everything. At the beginning of the month, you sit down and figure out your budget- how much money you will spend on each category. Then you put the cash for each category in an envelope. So, you have your grocery envelope, your gas envelope, your clothing envelope, etc- whatever you decided your categories are.

As we get closer to our moving date, I'm thinking more and more about how we'll be handling our finances once we join Mr S. By the time LMS and I get there, we'll have had two full paychecks, which will put us in a better position financially. It'll still take a month or two to figure out what our expenses will be, as we get the utilities put in our name, do full-on grocery shopping, and so on, but we'll work on building our budget from the time we arrive.

To that end, I've made a wallet that has room for id, insurance cards, etc, as well as envelopes for our cash, an envelope for receipts, and an envelope for coupons. I'll post pictures the next three Mondays- by then we'll have unpacked and I can start posting other projects.

Has anyone else tried the envelope system?