The Envelope System of Budgeting

Posted on April 22nd, 2015 by Discount Debbie

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Debit and Credit cards are kind of amazing. You dump of bunch of tomatoes or whatever on a conveyor belt, a cashier shoves them in a bag for you, and you swipe your little piece of plastic through a machine, and bam. Your tomatoes are paid for, even though neither of you ever saw actual money used in the transaction.

The problem with this is that when you don’t see the money, it’s hard to realize you are spending it. Years ago when people used checks to pay for everything, you weren’t exchanging physical money, but you still had to write out a number on a check, pass it to the cashier, and then write down what you spent in your checkbook. Physically writing “$40.00” on a check and then “-$40.00” in your checkbook kind of made the loss of that $40 tangible. But with debit and credit cards, you glance at the number that is your total on a small screen for a moment, swipe the card, and that’s that. It can be hard to feel attached to that $40 when you don’t really get to visualize it. Many people end up spending more than they intend because of this.

Enter the envelope system of budgeting. It’s a type of budgeting recommended for people who need to feel attached to that money in order to rein in their spending. Say that after paying bills, rent, etc, you have $500 for the rest of that month. Figure out what you need that money for—say, $300 for groceries, $100 for new clothing or shoes, $100 for eating out/other incidentals. Withdraw $500 in sweet, sweet cash from an ATM. Bust out a few business-sized envelopes. Label each one “Groceries,” “Clothes,” etc, and put the amount you’ve budgeted into each one. Do not tell anyone you have $500 in cash lying around your home, but bring the appropriate envelope along when you go shopping. Perhaps you’ve mentally budgeted $80 for shoes. But at the store you see a pair marked down from $200 to only $120, and that’s more than you wanted to spend, but it’s such a good deal! With a debit card, it’s easy to mentally discount the extra $40 you didn’t budget and just buy them anyway, but with the envelope system, you have $100 in cash and that’s all. You cannot spend $120 on shoes! The envelope system doesn’t work for everyone, but it is a good option for many, many people who need to visualize what they spend.

How to Give Yourself a Raise

Posted on February 26th, 2015 by Discount Debbie


Who can’t use a raise? Did you know that with just a few simple adjustments, you can give yourself a raise? Here are just a few examples.

1. Increase your insurance deductible. Did you know that if you increase your insurance deductibles that you could save anywhere from 15% to 40%. Increasing your car insurance deductible from about $200 to $500, it’ll save you about 15% to 30%. And, if you increase it to $1,000, you’ll save 40%. So, as long as you can afford to pay that kind of a deductible, it’ll be worth it to save the money.

2. Pay off debt. If you are paying 14%, 15%,or even 18% interest on a debt and you pay it off, then you will earn yourself that percentage every month. In reality, you actually give yourself a raise by both eliminating the cost of the interest every month and putting the money you had sent off to your creditor every month into your own pocket, or into your bank account. Do your best to pay off those debts; that’ll be money you can save (or spend as you like) as soon as you do.

3. Re-evaluate (or create) your budget. Are you spending money on things you later regret you bought? Are you wasting money eating out too much? Do you tend to spend money on the items on display at the check out lane? Take an itemized look at what your dollars are being spent on and decide whether those items (whether that’s candy, gum, magazines, or the “advertised specials”) are really worth the amount you are spending. Make the cuts and put that extra money back into the bank.

4. Take advantage of your company’s 401k. A 401k is a great opportunity to earn extra money. If your employer offers any matching contribution take advantage of that! It’s basically free money towards your retirement savings.

Ways To Cut Your Grocery Spending

Posted on January 16th, 2015 by Discount Debbie

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I looked over our 2014 spending a few weeks ago and was appalled (because we didn’t really budget) at how much we spent on groceries last year. Our grocery spending came second only to our mortgage payments! We are very thrifty shoppers, believe it or not, but eating healthy is a priority for our family. When I look over lists and read books on how to cut grocery spending, I find that I’m already doing what they suggest about 90% of the time. But since we still need to cut spending, while maintaining our healthy food priority, I’m making a few more changes this year.

1. Budget. I’ve started watching our grocery spending much more closely. If I can cut our grocery spending in half, or even by a third, it would be the equivalent of me getting an additional part time job! It’s worth being vigilant about it!

2. Re-Evaluating Purchases. I’ve taken another look at the “Clean 15” list, foods that are pretty much pesticide-free even when grown conventionally, in order to be ready to substitute foods that we normally buy organic with non-organic foods from the list. For example, I took a fresh look at the list before going shopping yesterday. Although we usually purchased frozen organic mango chunks, I opted for the non-organic frozen pineapple chunks, which were cheaper by almost $1 per pound.

I also usually buy organic onions. This time, I bought a 10 pound bag of onions for $5.

I’m on a mission.

3. Re-evaluating the meal plan. We’ve decided to have at least one, if not two, days a week without beef or chicken. I researched and researched until I found a site where I could order bulk organic dried beans. Our local Whole Foods sells organic dried black beans for $3.49/lb. I got a 25 pound bag for $1.48/lb (including shipping).

4. Reduce trips to the grocery store. I posted about this the other day. I don’t know if I can really just shop once per month; I’m aiming for twice a month for now.

What are you doing to cut your grocery bill?

Thrifty Tip: Easy Ways To Cut Costs

Posted on January 8th, 2015 by Discount Debbie


Do you ever feel like you always spend more than you planned when you go grocery shopping? It’s easy to do. So here are a few easy tips to help you cut costs for your next trip.

What’s in a name?

It’s possible but very rare that a name brand product actually tastes better than a generic brand. So, unless it makes a big difference to you, go with store brands and save anywhere from 25 to 50 percent off your name brand costs. This applies to those of us who buy organic also. I’ve loved the savings we’ve gotten by switching to store brand organic foods.

Write it down.

How often have you walked into a grocery store thinking that you just needed to pick up a couple of items but actually walked out with a cart full of stuff? It’s so easy…so, I’ve heard. 😉 One of the best ways to fend off impulse buying is by simply making a list. I try to keep a running list of items I need to pick up on the refrigerator. That way, when it’s time to go to the grocery store, my list is ready to go.

Sometimes I remember something I actually needed that wasn’t on my list. So, obviously, that’s not impulse buying. However, other times I see something I’d like to get but am not sure about how good of a deal it is or how much I really need it. In that case, I usually check to see how long it’s on sale so that I can go home and think about it.

If you fail to plan, you plan to…spend more money!

Set aside an hour each week to plan what you’ll make for dinner. Always start with what you have. Is there chicken or beef in the freezer? Start there? Any produce you need to use, don’t let it go bad. Plan to use it for dinner. You’re more likely to spend more making last minute decisions about dinner.



Time To Budget: New Year Budgeting Tips

Posted on January 5th, 2015 by Discount Debbie


One of the greatest things about a new year is the chance to start again in so many ways. One of the ways we get to start over is in the area of finances. I’m about to sit down to re-work our family’s budget. So I thought I’d share a few budget-making tips at the start of the year.

1.  Review Last Year

Look over your 2014 spending. What did you get right? What did not work? How did you do with your debt? Did you reduce or eliminate it or did you add to it? How about your grocery budget? How does your savings account look? Did you pay all your bills on time or did you run into late payments and bounced checks? Take an honest look at it all and figure out how you’re going to fix your failures. Let’s do better this year!

2.  Re-evaluate Your Budget

Is your budget accurate? Is it working for you or do you need to make changes? Did you add a gymnastics class for one of your children? Did your toddler get potty trained? Cut that diaper cost out of your budget and take a second to congratulate yourself on a job well done. 😉 You might need to review your budget with your spouse. An inaccurate budget is like no budget at all. So, make it count.

3.  Predict Extra Expenses

Take a look at last year’s “extra” expenses and make some educated predictions about ones that may come up this year. Then, make a plan to start saving for those. Extra expenses may include special trips, dental work that needs to be done, summer camps, and even Christmas presents.

4.  Ask for Discounts

Take a look at your bills and look on each company’s website to see if they have any offers or discounts available. You can also just call customer service to find out about any deals or discounts that may be available to you.

What do you do to make an effective, successful budget?

Where Should The Money Go?

Posted on August 26th, 2014 by Discount Debbie


Do you know where your money goes? I would assume that since you are a frequenter of this site the answer is a resounding yes. You do your budgeting and track your money. You look for ways to save money and even make more when you need to.  However, most of us don’t know how much of our money should go to various expenses. I learned from this free course ( ) where my money should be going.

The 10% Club

There are a five different categories in our spending that shouldn’t be more than one tenth of our income. Our first tenth should be put into savings. Second, we should put a tenth aside  in case of emergency. The third tenth should be used for recreation or education. The next tenth is used on gifts and contributions. This includes tithes, charity, and birthday gifts (If you’re a believer in a full 10% tithe, you’ll need to put birthday and Christmas gifts in another category). The last tenth is to cover our various insurances.

Under 10%

Surprisingly to me medical was in this category. This isn’t a part of insurance. This is what may be needed for a co-pay or to pay for a prescription. Medical expenses shouldn’t take more that .07 of your income. Next is personal items such as hygiene products or getting your nails done. These items can be expensive, but try to keep their cost under five percent. Another category that falls under five percent of your income is clothing. Luckily for us, thrifty divas know how to find a good deal on clothes.

Big Spenders

The one thing that should take up a third to half of our expenses is our home. This includes mortgage, upkeep, and repair. Following this is our car which we should invest about seventeen percent into. This covers our fuel, repair, and upkeep. If you do not own a car this is how much you should be limiting yourself to in the cost of public transportation. Last, but definitely not least, is our food budget, which should be about one fifteenth of our income.



Making a Bill Schedule Livable

Posted on January 9th, 2014 by Discount Debbie

When I began to budget for the first time it was discouraging. I thought I had more money than I did. I would schedule the dentist only to discover I was at the end of my money that day. Or I would realize I had plenty of money, but during the wrong time of the month. With a few months of practice I worked out a way to keep my budget afloat through planning.

Use A Calendar

I mean really use a calendar. I got a free calendar from a wildlife charity. On it I mark paydays, bills due dates and appointments that I know will cost money. I estimate how much I will get each paycheck and plan my life and bill payment in accordance. I put everything on this calendar and then I put the calendar where I will always see it. It is a constant reminder that I am in control of my finances.

Not Just On Time

I pay bills early if I can. I know I have the money then. I know that the bill will come due, and that there will be a fee if it's late. So instead of waiting until the bill is due (I mean right now!) I pay it when it isn't a stress factor waiting to happen. This may mean that I don't have the money right now for fast food, but the lights are still on at my home.

Plan Around Paychecks

I plan doctors visits on paydays or very close to them. This way I know that the money is in the account. If by chance I have forgotten my calendar when I'm out in town, I know that I'm still covered for that appointment financially. I also don't plan bill payment or doctor appointments when the rent is due. Of all the things I want to make sure I have money for, rent is at the top of the list.


Last but not least I prioritize my bills. When starting out on a budget there are still going to be a few bumps in the road. When I went through this stage of budgeting I decided which bills were more important than other bills. For example, rent, electricity and gas money were at the top of the list then. Now it's rent, electricity and internet connection, because I work at home. If I am getting the kids' shots this month, I prioritize that. As life keeps changing, so to will my priorities. Budgeting however, must stay the same.

Tips for Paying Off Credit Cards

Posted on February 27th, 2012 by Discount Debbie

Not all of us were born Thrifty Divas. Some of you may visit our site regularly, but you’ve just recently started to cut corners and save money with all of our tips we post lately. One of the questions I receive a lot is how to pay off credit cards. Many years ago as a college freshman, I fell into the trap of credit cards. I definitely wasn’t prepared for them nor was I responsible enough to pay them every month.

As a freshmen with a new found freedom and a piece of plastic that could buy me anything immediately, I quickly got into thousands of dollars worth of debt. It was horribly depressing and I spent my senior year of college just trying to clean up my mistakes. I now have a very healthy fear of credit cards and try my hardest not to let other college freshmen fall into the trap that I did.

Some of you may not have gotten into credit card debt the way I did, but you may find yourself in the same situation spending most of your hard earned money on interest, lay fees and penalties. Here are some tips I learned along the way to getting out of credit card debt.

1. Don’t ever get one. Okay, someone is going to say it, so I will state the obvious. If you don’t want credit card debt, try your hardest not to get one. It may be easier said than done for some, but it is the easiest way to stay out of debt.

2. List your credit card debt and make a plan for paying them off. I think the easiest way to do this is to make a list from the most debt to the least. The reasoning behind this is because bigger balances cost more monthly because of interest. If all of your cards carry similar balances, list them by interest rate. Try to pay off the higher interest rates first.

3. Pay more than the minimum. Most credit cards now have a place on the statement where they tell you how much you’ll pay if you pay the minimum and how long it will take you to pay it off. Even if you pick only one card to pay more than the minimum on, you will start paying them off.

4. Ask for a lower interest rate. We covered this a couple of weeks back, but credit card companies want your business. Some will lower your interest rate just because you ask. If they don’t want to, ask that your card be deactivated and that usually changes their minds. Not that you should use scare tactics, be prepared to fully follow through.

5. Avoid debt consolidation. According to financial guru Suze Orman, “Be very careful where you turn to for help with credit card debt. Debt consolidators are often a very bad deal. The National Foundation for Credit Counseling is a smarter choice.”

6. Use your tax refund. I always say you shouldn’t count on your refund for anything. Then when/if you get it, it’s just like extra money. And with extra money, you should pay off debt. It’s that simple, when you’ve prioritized your list of credit cards, so through and pay off what you can. I promise, you will feel as amazing as you would have if you’d have spent the refund on a new flat screen television.

Have you gotten out of credit card debt? What are some tips that helped you?

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