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Please don't remind me that I'm poor; I'm having too much fun pretending I'm simply "living green" like everyone else these days.


Sunday, October 18, 2009

Electronic envelope budgeting?

You may know (or have heard) about using envelopes to budget? Each envelope represents a different bill or expense. You put into each one what you can afford to spend on each expense. When the money is gone you do without until next payday when the envelope is filled again. I happened to be thinking about the envelope system while standing in line at the Kroger store Friday. I've thought of a new version of the envelope system. How about using refillable gift cards instead of envelopes?

You can find these refillable cards just about everywhere now days. Even utility companies offer gift cards. I haven't tried it yet but I was told some gift cards can be refilled online using your bank card. The electronic equivalent of putting money into an envelope. A person could have one for gas, one for a department store, one for the fabric store, one or two for grocery stores.... and so forth. Then carry only the cards when shopping. Not the bank card or checkbook. To limit one's self to only purchasing what you can afford to spend.
I sort of like this idea but I can also see problems. I should be very careful about putting money onto gift cards. Don't put money on a card that I may not use. I can't get the money off the card without spending it. For example: a shoe store card. Unless I am certain I will buy shoes at that particularly store, I may wind up loosing the money if I decide not to buy shoes at that store. Some gift cards expire in a short period of time. I would need to use the card before loosing the money.
There are certain stores I regularly shop every other week. Kroger is only one of them. Lately I've found myself over spending my budget. It's partly because the prices have gotten higher on things I routinely buy and partly because I can't seem to resist the discount tables. A bigger part is because I've gone back to shopping every other week instead of every 4 to 6 months. I'm still buying as if I won't go to the store again for a long time.... even though I know I will.
The more often a person goes into a store; the more money one spends (more than normal) because of the extra items you suddenly remember to buy. If you routinely buy one or two items you forgot to put on your list then it will happen each time you are in the store. Fewer trips means fewer "Oh, I need this too purchases."
I may or may not give the gift card system a try. I have to think on it for awhile. It would be a great way to be sure I don't spend grocery money on discount bargains at a department store or thrift store or yard sale. Know what I mean? It's too easy to use cash (or a bank card) for an unintended purchase. If the money is on a grocery card I can't take it out of my wallet to use anywhere else. If there is a limited amount then I won't be spending more than I can afford.
Some gift cards don't make sense to use in budgeting. Know what I mean? Like a utility company card. Why put the money onto a gift card then turn around and pay the utility bill with it? Just pay the utility bill directly. But for staying within budget at other places it might work?
I've also heard that some gift cards charge a fee for using them. I'm totally against paying a fee for someone to allow me to spend my own money. If I have to pay a fee to use my own money then I'd rather use cash. No fee to use cash.
Would anyone care to give me your thoughts about this? Plus or minus for using gift cards as an alternative to envelopes?

1 comment:

Andrea said...

Hi Anita,
I am new to your blog, but read the archives every chance I get. I realize this is an older post, but you asked for feedback so I thought I would commment.
I used to use gift cards as a sort of electronic envelope system because my daughter's school sold gift cards to raise money. I would only buy gift cards for the grocery stores and the gas station for the amounts that I had in our budget for 2 weeks until my husband was paid again. The grocery cards could be reloaded at the store so, after the initial purchase ($25 or whatever), I could put as little or as much as I wanted on it. The school has since abandonded it's gift card program, but I still purchase a gift card for gas which my husband and I share. Typically, I put the amount for 2 weeks on the gift card, fill up my car (which usually gets me through the two weeks since I'm at home with the kids) and I give the card to my husband who uses it for the remainder of the two weeks. For a while, I was getting two gas cards, but he would end up needing to take mine so I just get one now and I'll get it from him if I should need a little extra gas to get through until the payday.
I don't do the grocery cards anymore, though. I just use cash now.
Hope this helps!
God Bless!