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Envelope Budgeting with PearBudget

We love good reviews.

We go nuts over great reviews.

So we were practically giddy this morning when we read Meredith (Like Merchant Ships) reviewed us, in her post “Easiest Budget I’ve Ever Made: Pear Budget.”

You might be familiar with the “envelope system” of budgeting: You decide — at the beginning of the month — how much you want to allocate to each spending category, and you put cash into an envelope for each category. You spend money out of the envelope, and when you run out of money in an envelope, you either A) stop spending in that category; or B) transfer money from another envelope into that envelope. The point of it is that (in the words of Dave Ramsey) you’re “giving every dollar a job.”

If envelope budgeting sounds like a familiar approach, it’s because that’s the model we used when we built PearBudget.

The problem with envelope budgeting is two-fold:

  1. It can be a little challenging if you want to use debit/credit cards. (That’s a plus for some people, actually.)
  2. Two, you don’t have a longitudinal record of your spending. So you might know that you spent $200 on gas this month, but you don’t necessarily know what you spent on gas last summer. Having a historical record can be really useful, especially as you begin to repeat annual cycles.

PearBudget resolves both of these problems. PearBudget plays well with both paper and plastic, and it gives you a record, so you can see how your per-category spending changes over time.

Anyway, as Meredith’s been using PearBudget, she’s been seeing how well it complements a traditional envelope budgeting approach. And, as she notes, she’ll “never go back to Quicken again.” Again: we’re giddy.

To read her full post, just head on over: Easiest Budget I’ve Ever Made: Pear Budget.

Budgeting tip of the day

Buy a box of granola bars. Stick ’em in your car. If you’re out and need a snack, you’ve got a cheap one ready.

Budgeting tip of the day

You get good at what you practice. What do you want to be good at? What are you practicing?

Budgeting tip of the day

Unless you’re riding the line, pay all bills the *moment* you open the envelope. They’re too easy to lose/forget.

Budgeting tip of the day

When the commercials come on, use the mute button and do a decluttering / “get closer to some goal” sprint.

Budgeting tip of the day

Take a look at www.fuelly.com as an easy way to track your car’s mileage / fuel efficiency.

40 Days of Water

This notice is about to scroll off the main page of the blog, so I wanted to re-post it. In case you missed it the first time: You can get a month and a half of free PearBudgeting if you 1) do a non-water-drink-fast with us and 2) donate the money you save to help get water to people in Africa. If you have a blog and are willing to spread the word about this, we’d sure appreciate it. And — let’s be honest — thirsty Africans will appreciate it even more.

Are you interested in doing 40 Days of Water with me? If you drink water for only 40 days, and you donate what you would have spent on non-water drinks to drill new wells and provide clean water to people in third-world countries, I’ll comp your PearBudget account for the 40 days. Let me know if you’re interested.

Budgeting tip of the day

Take a sec. Flip your credit cards over. Enter their emergency phone numbers into your cell phone’s contact list.

Quote from Andy Budd

“Cheap always cost you more in the end. That’s why I can’t afford to buy cheap. Can you?”

Andy Budd::Blogography: Why I Can’t Afford Cheap

Budgeting tip of the day

Use PearBudget to record your car maintenance. When work is done, use tags to record vehicle, mileage, work, etc.