Envelope Budgeting

I've been doing this for months and never realized it was an actual method of budgeting. My cousin mentioned it to me this past weekend and I was shocked. I thought I was being terribly clever.

I can't manage money to save my immortal soul. If I have money in the bank I'll spend it, no question. However if I have the money physically in hand it's much harder to spend it. If I have the physical money stashed somewhere it becomes painful to spend it.

So, I end up with a large number of envelopes, each holding some amount of money. My paycheck is direct deposited and I pull out the vast majority of it and stash it in envelopes. When the time comes to pay a given bill I pull out the envelope containing the money that has been set aside for this purpose.

As an extension of this behavior I have a large number of accounts and multiple banks, money goes into accounts and automatic bill payments take the money out and I simply don't have to worry. I find this method advantageous as it's a pain to drive to a bunch of different banks to pull money out, so the money doesn't get spent.

Saving via obfuscation. It works for me, I've managed to put away $1,100 in savings, I've paid off thousands of my debt consolidation loan and my bills are all current. I know what I have to spend for the week and once everything is covered what ever is left over turns directly into play money.

I hope to have five thousand saved by years end, let's see how close I come!