Tag Archives: envelope

Lessons from My Father

I’ve been away a lot lately.  I haven’t really been in my office and I haven’t written a Moneywise Tip in quite a while.  Sometimes family responsibilities have to take priority over other things. And that has been my situation as my father arrived at the final weeks of a long illness and then passed away.

My father was a teacher by trade (German and French), and he was always teaching something to someone, whether in the classroom or not.  While he never succeeded in teaching me to speak German (much to his dismay), he did manage to teach me quite a bit about money over the years.

My dad grew up poor.  He was born during the Great Depression, and after his parents divorced he lived with his father in a one room cabin without electricity.  Because he knew what it was like not to have money, he was very careful with it once he actually had some (after 4 years in the U.S. Navy and working his way through college on the G.I. Bill).

I remember always receiving an allowance as a child.  That is how I learned about how to receive a regular paycheck and that more money didn’t come around until the next payday.  My dad was paid every two weeks, so my allowance came every two weeks.  So I had to get used to saving and budgeting.  As I grew older and took on more responsibilities in the house, my allowance grew to reflect that.  I learned that more work yields more money.

My dad helped me start a savings account when I was young.  I remember a program in my elementary school where students all started savings accounts together and brought deposits to school for regular savings.  But I didn’t participate because I already had my savings account, and it was growing whenever I had some extra allowance or some birthday or Christmas money.  Over the years I learned the value of having some extra cash stashed away in case of emergency or for a purchase that required saving ahead.  And now I still have an automatic transfer to savings set up right after every pay day.

My dad also taught me about loans.  My sister and I were desperate to have a television in the bedroom we shared.  But the 12 inch black and white TV we dreamed of was more than $40, which may as well have been a million dollars for two elementary age kids in the 1970’s.  But my dad loaned us the money.  He kept a ledger of the amount we owed, and we paid it back over time, in dribs and drabs.  I remember at one point handing my dad a small box full of pennies to pay on that account.  And he accepted that and subtracted it from my balance due.  I’m not quite sure how long we took to pay off that TV, but I’ll always remember my first loan.

My dad was quite the master of budgeting as well.  He didn’t have spreadsheets, but he worked out his budget extraordinarily well using the envelope system (which I understand made a recent comeback thanks to TikTok). Every payday he would go to the bank and get a certain amount of cash to fill the envelopes.  He had a list of exactly how many of each denomination bill he needed.  Then he would lay it all out on his desk like a Monopoly banker and would fill each envelope with the budgeted amount.  Each regular expense had its own envelope.  Then when the bill came due, he would go to that envelope and get the money to pay that bill.  If the amount in the envelope wasn’t enough, he would rework the budget and would have to figure out which category could spare a little to cover the difference that month.  It seemed incredibly complicated at the time.  But it was amazingly effective.

My dad taught me so many things I am grateful for.  The lessons weren’t always easy at the time.  (Especially the time he taught me how to stop going up hill without drifting backward in a manual transmission car.  That lesson came with a LOT of tears.)  But I will forever be grateful for the many things he taught me.  I hope I am able to have anywhere close to that kind of a positive impact on other people’s lives.  Thank you, Pops!

Budgeting: There is Help Online!

Budgeting is hard.  It makes me crazy.  Paying bills make me stress.  And I should know better.  I should have my spending under control.  I do this for a living, for crying out loud!  But I struggle.

I understand the concepts.  Know how much money you have.  Know how much you are spending on what.  Spend less than you earn.  It sounds so simple.  Yet it’s not.

It’s just like dieting.  Consume fewer calories than you burn and you will lose weight.  It sounds so simple.  But I like chocolate!!!!!!

I’ve had some success in the past using online trackers to help with weight loss.  So it makes sense that maybe I’ll do better with budgeting if I get some online help in that area.  I’ve reviewed a lot of different online tools.  A lot of people like Mint.  I’ve had mixed experiences with it.  It’s ok for tracking where the money goes, as long as it works right.  But I’ve had some trouble with it tracking some of my expenses multiple times.  Tired of the disappointment, I moved on.  A lot of people rave about You Need a Budget.  I like the concept of this site, but rejected it because it requires an actual software installation on the computer.  I want something more portable than that.  I finally decided to try something called Mvelopes.

Envelope Budget

Mvelopes is the modern online version of the old tried-and-true envelope budgeting system.  I watched my father use the envelope system throughout my childhood.  On payday he would go to the bank and come home with cash.  He would then sit at his desk and dole out that cash into its designated envelopes.  When my mom needed to go to the grocery store, she took money from the Grocery envelope.  When I needed new shoes, it was time to hit up the Clothing envelope.  When the car needed fuel, we tapped into the Gas envelope.  And if there wasn’t any money left in an envelope, we had to either make do without, or figure out what envelope we could afford to move money from.

The concept of envelope budgeting is really solid.  You can’t spend cash that isn’t there.  But the idea of working with actual cash is kind of antiquated.  I don’t want to have to deposit cash into my checking account every time I need to pay a utility bill.  But Mvelopes brings that concept into today’s age, where life works with plastic transactions and online bill paying.  I have online envelopes, designated for my budget line items.  I can move funds from one envelope to another.  Every time I get paid, I fund my envelopes.

I’m hopeful that this budgeting tool is going to make a difference for me and help me pay down some debt.  But we’ll see.  I still like chocolate…