I have what is likely a very unusual budgeting problem.

mrspeedybob · #1 (**permalink**) 10-09-2009, 08:27 PM

I use a spreadsheet version of the envelope system for my budgeting. Each month I devide my income between 23 different catagories. Some of these catagories don't get used very often. The home-owners insurance envelope for example gets $100 per month and pays out $1200 per year.

When added up all of the different catagories total between $6000 and $9000. I have an income of about $40K per year and my total endebtedness is about $115k including my house. My goal is to be debt free.

I feel like I have too much money sitting in the bank that could be paying down debt, but it feels so nice to know I have money in the bank waiting for every bill and expense that comes along. How do I get the best of both?

sapphirecapital · #2 (**permalink**) 10-10-2009, 04:16 PM

your feeling may be right but there is no reason to adjust because frankly cutting it to tight will hurt you in case of unexpected events

robert fourman · #3 (**permalink**) 12-09-2009, 05:48 PM

You dont

Debt isnt a problem unless the cost is unreasonable. Life isnt constant it has its ups and downs, best to have a sizable cash on hand to handle the downs, otherwise you may pay off debt that costs you 5% (a motgage) now only to borrow on your credit cards in a pinch in the futurre at 15%

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