Quote Originally Posted by Patrick
Yup, we use the envelope system, but it's all run behind a budget as well. Obviously, there are some things you can't use an envelope system for, like most utility bills, but they go into the budget. We mostly use the envelope system for Gasoline, Groceries, Date Night, Blow Fund, Out to Eat Fund, Clothing Fund, Tithe, etc.
Describe the envelope system. I'm getting the image of stuffing a bunch of cash into various envelopes and waiting for bills to come. This can't be right.

Also, we have an emergency fund....right now we have it in savings, but I'm going to open up a money market account soon, as Dave suggests. They draw more interest. Only drawback is there's a 48 hour waiting period to get your money out. But, that's where I have a credit card. If an emergency comes up, I'll use the card, then pay it back when I get the money out of the account.
Good plan, but credit cards aren't bad at all if used responsibly. First, they build credit. Having many credit cards and a lot of unused available balance can really help your credit score. Your credit score will help you obtain better rates on mortgages, car loans, etc. as well as allowing you to qualify for other money-saving special financing plans at various retail, furniture, etc. type stores. Second, look for a credit card with a decent rewards program. If you fly a lot, get one that gives you frequent flyer miles (they also provide some great lost luggage insurance and other types of benefits). Personally, I have a card through Chase which pays back 1%-5% on everything I buy. I've *made* $150+ this year in cashback just for using my credit card. The key is to pay it 100% off every month and not to buy anything you can't afford. If you do that, there are plenty of security and financial incentives to use the plastic.

Also, there's nothing wrong with having a home mortgage. You basically have to have one in today's society. We'll have one, but we'll probably go with a 15 year note, instead of the 30 year......less interest....and of course we'll attempt to pay it off early.
Mortgages are great. As far as working hard to pay it off though, I'll have to differ with you there. Think about it.. your average home loan right now is in the 5.8%-6.0% range. Your average decent mutual fund does about 8% a year. Take that extra cash and invest it in an interest/revenue bearing account which grows faster than your mortgage does and you'll be money ahead.

Debt isn't a bad thing, and in that sense, debt can make you money. It's not uncommon for an investor to take out a loan at a good interest rate, invest the money in a relatively safe investment and end up money ahead.