Envelope stuffing has gone viral. You Tubers make millions of views from videos from watching someone count out dollars onto cash trays and put it in plastic wallets labelled with Cricut vinyl words like "taxes" and "vacation" before storing it in one of several fancy ring binders specially for the purpose. There is a whole new vocabulary with terms like "sinking funds". All these things are a bright shiny and new way of managing your finances right? You need to rush to Ebay or Etsy to buy your cash tray or binder or wallets because otherwise it won't work-right? Wrong.
Sorry to burst the bubble but these are just sexed up versions of how your great grand parents budgeted before credit cards. Sounds SO much more boring doesn't it!
What each (successful) envelope stuffer has identified is the budget categories that apply to them and worked out out much they can afford to put in each category. This includes those things for everyday like "groceries" "rent"; but also categories to replace things like your washing machine when it breaks, these last are your sinking funds. But never, ever, in all the videos I have watched for research purposes have I seen a category that I use all the time. It saves me hundreds of pounds a year, protects other budget categories, and after a while is self-funding.
Let me give you a scenario...
You're doing your shopping in the supermarket, list in hand, budget in mind, all under control (well some of the time). As you round the end of the aisle the clever supermarket people have placed a display of the latest item on offer. It is something you normally buy and at a great discount! But if you buy it it will totally blow your budget - what do you do?
a) Leave it be and live with the loss
b) Break into your emergency fund- even though this is not what it was intended for and will leave you a little more vulnerable
c) Think ahead and use a separate budget just for this kind of thing.
Obviously from the title of this post you know I am a "c". I have a separate budget that is just for "stocking up" - sometimes called the "third purse system".
The idea is a simple one - I collect money from vouchers, coupons, reduced stickers plus what ever I can spare into one envelope. This is used to buy long life items such as dry goods, tinned goods, toiletries and laundry products, and cat food wherever there is a saving. These could be special offers, BOGOF or multibuy, reduced for quick sale, time limited offer (i.e. coupon), or simply from a shop which I do not normally visit due to geography.
As I use the items I pay my envelope back from my grocery budget (these are all items that I would otherwise be willing to pay full price for).
How much does it save me?- well last month I saved about £32 on washing liquid capsules alone (courtesy of ASDA and a combination of rewards into my ASDA rewards app due to star products and and in-store special offer). The stash of these will take four months to go through, £20 of this is rewards via the app so can be realised almost straight away the other £12 will dribble into this envelope over the next four months. This was an exceptional offer I have to admit but would not have been possible without this envelope - I laid out £32 in cash up front to realise the £32 saving . A more normal week would be saving £15-20 once you get a good "stock" going.
Just incase this sounds like too much work let me explain that I do the money transfer just once a week when I sit down and write my grocery list anyway- it take me about 10 minutes total and regularly saves me three figures a year. The envelope does not need a weekly top up either (although it helps at first) as you're paying yourself back the full price. For me it is a fair trade - how about you.?
