Dollars and Sense

money pic

How many of you are dreading that one piece of mail due to arrive soon? The credit card statement! At some point in our lives, we lean too heavily on easy credit, and it comes back to bite us. This is the first of a few money organization posts to help avoid unnecessary debt.

Many of us are skilled at developing and maintaining a budget; however, what about those expenses that do not fit neatly in a monthly plan? This is where the use of virtual envelopes can streamline a family’s finances. Virtual envelopes are small savings accounts where money can be added and saved throughout the year. I use my local credit union. (Note: Their technical term is just a sub-savings account. I named them virtual envelopes, each labeled for specific use.)

Gifts: How many of you despise the monthly credit card bill that arrives after Christmas? Or the birthday present you figured to pay later? I have a “Gift Fund” virtual envelope set up through my credit union. Every paycheck, a certain amount goes in and when birthdays arrive or Christmas, we have a budget to work from (or at least an amount to start with and add from our monthly budget).

Vacations: How many of you take vacations with only the current paycheck, then the following month dread the credit card bill with all the unexpected purchases? Yes, even vacations require a budget. Setting aside a virtual envelope for the year’s weekend adventures, day trips, or spring break is a useful tool for staying on track or even planning for that once in a lifetime trip (see how we saved over a seven year period for our family trip to Ireland!).

Any other envelopes needed? Do you heat with propane and need to save for winter fill ups? Do you need funds for specific teen activities, camps, driver’s education, etc.? A little planning and organization now will prevent future credit card anxiety. Do you have more needed “envelopes” than money? Pick the two or three that interfere with your budget the most. Even in my own hyper planning, I still have neglected to start an envelope for future vehicles…baby steps. Those of you who usually receive tax refunds in a few weeks, consider starting your family’s fiscal year on a positive note by paying off credit cards and setting up a few virtual envelopes.

Happy Budgeting!



  1. This is some great advice. I like the way you have ‘virtual envelopes’ rather than having the temptation of cash in real envelopes. Credit cards and like debt certainly have their way of sneaking up on people. Having a solid budget and sticking to it is one of the best ways to avoid debt. It’s also important to pay of any debt you have and make sure you don’t fall back into it. Thanks for sharing your helpful tips!

    1. What are some of your methods for maintaining a monthly budget? That seems to be an ever changing challenge for us, especially with three kids!

      1. First, I would suggest writing down what you think you spend per month then find out how much you actually spend. This means keeping a detailed record of all your spending, from candy bars to phone bills. After you see where your money is going, it’s easier to prioritize and work some things into the budget while cutting others.
        If you’re interested, please feel free to check out my site : You’ll find a lot more info under the Budgeting tab as well as a free download for a budgeting spreadsheet.
        I hope you find it helpful!

  2. Yes this is really a great way to do it. For the smaller items that don’t easily fit under any category – or are too small or frequent to use special accounts for – we also pull an “allowance” of cash each week instead of using ATM card every time. This covers all those incidentals (like a candy bar or unexpected stop at McD’s)…but when its gone its gone – we are forced to stop spending (no more coffee for the rest of the week)…and if there is a surplus – we take out that much less next week. This saves fees, forces you to stay within budget, and trains you against spending cash “just because its in my pocket” (and then not being able to account for where it went)……Also, when planning debt payoffs – simply sort your debts by highest interest rate and payoff highest one first. Once you have that paid off – start on the next one and apply the payment amount of the previous to the new one….eventually you end up with just a house or car payment and you are either applying a HUGE payment to these or you can add more to your savings…depends on how dramatic you want to get with the “no debt” lifestyle. I have resolved myself to those 2 payments because I like new cars and houses and can’t stay in them long enough to pay them off….only to hopefully make a little money or lose as little as possible ;).
    These are tried and true methods…and I can personally validate they work….we have had to go down to one income unexpectedly, medical bills, and also racked up serious debt building houses in the past….so it took things like what you suggested and what we did to make that go away and start really saving money!!! I love your blog….it provides such useful ideas and good reading material during my long drawn out phone calls – keep them coming!

    1. I like the idea of misc. spending money in an envelope. We are constantly wasting time running to the ATM every week or so. Good idea! When are you heading back this way?

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