Implementing the envelope budgeting system with Roxanne Bergman

In this episode of the podcast we’ll be talking about something called the ‘envelope system’. Those of you who follow Dave Ramsay may have heard about the envelope system. Dave Ramsay talks about the idea of drawing money out in cash and keeping it in envelopes to help you to manage specific areas of your life and budget where you may be overspending.

My guest in this episode is Roxanne Bergman, owner of RoxPix Photography. I had a conversation with Roxanne recently after I asked a question in my Facebook community about the envelope system, specifically who had heard of it. Roxanne was one of the first people to respond, telling me how successful the system had been for her in managing her money and helping her to be proactive and intentional with her budget, something that regular listeners of this podcast will know I think is extremely important.

Roxanne is extremely funny and also a total inspiration in terms of how she has started her business and used financial tools such as the envelope budgeting system to grow in the way that she has.

Listen to the interview

Hi Roxanne, can you tell us a little about yourself?

Hi! I’m a portrait and wedding photographer specialising in natural and outdoors wedding photography, and I also do what I like to call unique head shots. I started my business straight after university, so I’ve been a professional photographer since I was 21. I’d say that everything I’ve learned about photography has been learned in the 12 years since actually starting my business. I remember my dad, who is also an entrepreneur, telling me to start my business as soon as possible, so that by the time I was successful I’d be young enough to enjoy it, and it turns out he was absolutely right!

Would you say that starting your entrepreneurial journey early has allowed you to enjoy a better lifestyle earlier in your life?

It definitely took a long time to build, but we absolutely do enjoy a nice lifestyle now. I would say that perhaps if I’d not listened to everyone around me all of the time and trusted my instincts the business may have grown quicker, but it’s all the more sweet now that I am there. It’s funny, because the advice that I always give people when they ask me about starting a business is just to ignore everyone! Whatever it is that you do, you’re going to figure it out along the way, and a lot of business is about being able to tune out the noise of other people’s opinions and fear about risk taking.

So with your dad’s influence, what kind of relationship did you have with money when you were growing up?

We were very comfortable when I was a child, so I don’t remember ever worrying about money. I didn’t really have a concept of money, I suppose because I didn’t have to worry about it it wasn’t something that I was aware of.

I do remember that my dad would save up change that he would give me to count, and once I’d counted it I could keep it. So I suppose in that way I was quite used to handling money. My parents also encouraged me to talk about money with people; little things like ordering my own food in restaurants so that I was used to having these adult interactions that link to money.

It wasn’t really until my early 20’s when I was building my business and working in schools to support that journey, and I was watching my friends make quite good money in their careers while I was still counting pennies that I found this stubborn resolve to stick with what I knew I wanted to, and could, achieve.

So how did you deal with that challenge at the time?

I’ve always felt super supportive of my friends, and they of me. So I was never jealous of their early financial success, I just knew that I wanted to be a photographer and that I had to be stubborn in a way and stick with it. I was very conscious that whatever I chose to do, the initial rise up the ladder would always be a challenge, so if I was going to challenge myself it might as well be in something I really wanted to do.

How did you know that photography was what you wanted to do?

My dad took a lot of photos when I was a kid, and I remember sitting and going through the family photo albums we had, which was one of my favourite things to do.

When I finished my A levels I was due to go to university to study sociology and criminology, but over that summer my dad and I spent a lot of quality time together taking photographs, and I just had this realisation that I wanted to be a photographer.

I’m just so glad in hindsight that I changed my mind and didn’t go off and continue with a course in something that I would have never wanted to pursue for the rest of my life.

I will say though, it really wasn’t until my 20’s when I had very little money that I really started to struggle with money. At the end of 2015 I decided to go full time with photography, and in that time I just didn’t have much financially and started to accrue a small amount of debt.

And it really wasn’t until this year, I was sat down with my husband going through our statements and I had this realisation that I’m not in that place where I’m struggling anymore; we actually have money, and yet we’re giving it all to the supermarket! I just knew then and there that I had to get a handle on it.

Did you feel guilty for spending?

Honestly, as dramatic as it sounds, I felt disgusted with myself. I’d been in this place of not having much and learning to deal with that, and as much as I was never bothered by other people having money, I was bothered by the limitations it out on me. Then when the business became successful and I did have the financial resources, I felt acutely that I now had the resources I had wanted but was frittering it away in Tesco! And it was purely through lack of organisation.

Two things you’ve said there really resonate with me; the first being organisation and the second being intentional about money. I think there can be a lot of fear around something like looking at your bank statements intentionally

Absolutely. And I also think that women in general are not groomed for success or to make money as business owners or entrepreneurs. So often when women are entrepreneurs or do have success with money, there can still be a fear connected to money. Women constantly seem to feel as though they’re not doing enough, can be apologetic about their own success, and are scared to make money. Which, when you think about, is crazy really! Making money and living intentionally in the way that you want to with money is what allows us to be comfortable and have the opportunities that come along with that.

It’s that imposter syndrome thing again, isn’t it?

Totally. I think it’s so funny that we can go to these really dark places about our fears with money.

So I’d been struggling financially for a while before deciding to go full time with the business. And actually after making the jump in late 2015 it wasn’t long until I was earning enough to feel comfortable for the first time in a long time. But as I said, I continued in that way, sort of wasting money, for quite a long time. And then recently I came across a lady called Jordan Page on Youtube. I was searching for something like ‘how to save money’, and was faced with all these videos about investing large sums of money which I found ridiculous.

Jordan Page talks about and is an expert in lifestyle spending, so I instantly found her videos relatable, and she has this envelope system. I’d heard about it in a way, and I know that it’s something that previous generations like my grandparents would have probably used. I was aware of this idea that you could have several envelopes, each for a specific area of spending such as mortgage, groceries, and household bills. But the particular video of Jordan’s that I watched talked about just the one envelope.

I decided that anything was worth a try, so I got my envelope and wrote the month at the top. And then the idea is that you divide it down the middle; one side is for food and the other is for miscellaneous. Miscellaneous would include things like going for a coffee with a friend, or buying a new top for example. You then draw lines across, creating a table of sorts, and divide it into weeks of the month. Then for each week, you set an amount that you’d like to stick to. Every time you spend a part of the budget, you write it down on the envelope and keep the receipt in the envelope too.

It completely transformed the way that I saw money, and it also changed the way that I shop. So I try to shop around for the best prices, go to the market and the butcher and so on. I definitely recommend taking physical cash with you when you first start doing this; it’s so powerful to see the physical cash as you’re spending and to see the process in action. Once you feel totally comfortable with it, then switch back to using your debit card. The process has allowed me to save so much money.

I love this. It’s so intentional. I think it’s also so important for the budgeting to be personal to you and your needs and wants.

Absolutely. For us as foodies food is so important to us, but we just weren’t shopping in a way that made any sense, either realistically in terms of cooking actual meals, or financially in terms of how much we were spending. Now I spend around half what I used to on food, but the cupboards are always stocked, and stocked with items that actually go together to make a meal!

Envelope budgeting goes so well alongside meal planning, which is something I was very resistant to doing. But realistically, in general people have like twenty meals in their repertoire, so as long as you have the ingredients to make 7 of them in the house at any one time, it really doesn’t have to be restrictive. I was amazed at how quickly I was able to see the difference.

We actually talked about meal planning recently with Faith Archer, you’re absolutely right. Did you make any other changes alongside the envelope system?

The envelope system was the first thing, and then I soon realised that meal planning was going to be really important and that the two things ‘feed’ each other. So literally I just have a note on my phone with Monday through Sunday, and notes about what we’re going to eat and then shop according to that.

The third thing I did was to open multiple bank accounts. People quite often think of this is quite confusing and scary, but honestly I don’t know how I ever managed with just one bank account now.

How many accounts do you have?

I have six now, and I’m looking to open more. I actually opened a Starling bank account on your recommendation, which is the account I use for birthday and Christmas saving. Every now and then I’ll pop some money in that account, and then when something comes up or Christmas arrives I know that I have it covered.

I love the concept of having multiple accounts, and actually the beauty of an account like Starling bank is that you can have little pots within one account rather than having several accounts. Do you have any other key tips, Roxanne?

I would say just get started, give the envelope system a try. It’s worth giving it a try, even just for a few weeks to see the difference it can make. I’d start by adding up all the expenses from your most recent bank statement and then once you’ve implemented the envelope system for a month keep back the difference, or even just half of it, and save it.

It’s really amazing that once you start getting organised with one area of your finances, how everything else financially starts to fall into place. Seeing the results in one area makes you really want to get a handle on all of the other financial areas of your life.


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