Trying Out The Envelope Budgeting System

Okay, after looking at the balance in my bank account in despair last week I've realized that I really must get my finances in order. I've said that before and even signed up for mint.com, but I need something more visible, tangible and at my fingertips.

One of my cousins once told me about using the envelope system years ago so that is what popped into my mind today. Coincidentally I was talking to my  boss earlier today and he mentioned that he heard Dave Ramsey on a show this morning talking about using the envelope budgeting system. He has a very neat and compact organizer that is reasonably priced.

The basic idea is that you budget down to the nickel what you are able to spend on certain things such as groceries, entertainment, etc and put the money into different envelopes. Once the money is gone, it's gone. No exceptions. So if you budgeted $50 for clothes then that is all that you get. Frankly this is going to be my toughest thing to budget lol.

You also need to set a budget based on when you get paid. As for the envelopes you could use plain envelopes or the clear vinyl ones that are pretty sturdy.

They also have some very pretty ones like these:

My main question though was how do you set a realistic food budget. I think that $10 a day for me would be pretty good. The consensus on the web seems to be that you should plan your meals out in order to save on your grocery bill. I'm not much of a couponer, but it should not be a big deal to plan around the circular. 
I am going to try this out for a few weeks and report back on whether or not it helped :). 
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