Managing My Cash: Cash Envelope System

Today's post is quite lengthy and serious..

Don't bother to read it if you're not interested.

When it comes to budgeting, I've always have a weak heart..

I always overspend..

So when I've started my part-time job last year, I have to develop a system so that I don't overspend and I want to manage my spending wisely..

Without depending on my parents anymore..

So I adopted a cash envelope system..

Everytime during my paycheck, I will divide all my money into separate envelopes according to the necessity..

In 2009, Dave Ramsey also proposed this system..

But honestly, I don't even know him back then..

It is a system I picked up from my mother..

She is really good at budgeting..

I have been doing this system for more than a year and it works really well for me..

And I want to share it.

1. I categorized my spending i.e petrol, daily, rental etc.

2. Before my payday, I roughly estimated my earning and started budgeting. If I earn more than I've expected, the extra will go into my saving envelope and my miscellaneous envelope.

3. During payday, I divided my cash and filled them into the allocated labelled envelopes.

4. I never tempted to use the cash that I've alotted for other necessity. Once I've spent my cash for a given envelope, I will not touch the others unless it is for emergency.

Here are my budget lists/categories for a rough idea:

Parking - My work requires daily parking fee, so I count the cash I need for parking

Example: RM3 x 30 days = RM90

So, any leftovers from this will go into my alotted funds

Daily - It's actually my daily meals money. But putting food as a category makes me look like a glutton so I change it into 'Daily' so it looks more sophisticated. Hahahaha..

Rental - need explain eh? >__< 

I.O.U - During my economic crunch *I have my economic crunch??haha*, I have borrowed a lot from my friends and family. It is not something that I'm proud of. So I've started to pay them back slowly, one by one.

Miscellaneous - Toilettries, contact lenses, clothing etc.

Tuition Fees - Now that my scholarship has ended, I have to self-finance my master degree now. So I alotted some for my fees.

Saving - Not much but at least I did some saving

Funds - This is what I'm talking about earlier. Everytime I have leftovers from any of the categories, I will put them into this envelope. Right now, I need a new laptop, so I'm saving this to buy a laptop. :)

Petrol - I own a car and I drive to work, so it is important.

Transition of my Cash Envelope System

This is the exciting part for me. First, I used money envelopes that I got for free from the banks

Then, I've spiced up my envelopes by buying kitchy envelopes from Daiso.

Then, after browsing the net, I've found a way to make my own cash envelopes!!

I made the envelopes from scratch! I will show you in my next post.I'm quite proud of them even though they were a bit distorted..Hahaha..What to do. I'm not really artsy.. ;p

And I improvised it by using an organizer and added some blank papers for me to write down my spending. *You know, to trace them back, just in case.* And tadaaaah! My own cash organizer.

Have any of you done this system?

How do you find it?

Share it with me!