Envelope System

For a long time I have always wanted to do Dave Ramsey's Envelope System to budget my money.  In college, I was too reliant on my parents to really have much of my own money to budget, and now that I am 9 months into a real job, I think it's that time…  Part of the reason I am doing this is because summer is approaching-  I have debated whether or not to work over the summer, and I have decided to take it easy and just work at J.Crew part time and maybe a little babysitting here and there.  (I think a first year teacher deserves a little break, right?)  Well, I know myself and with all that free time on my hands, I will be tempted to spend money like crazy….  SOOO, as a preventative measure I am starting up my new envelope budget TODAY!  

Interested in trying this yourself?  Here are the steps I have taken to get the ball rolling…

• I made a budget in Excel (actually Rob did- the boy is an Excel genius) with all my expenses (rent, utilities, groceries, gas, shopping, entertainment/dining out, gym membership, savings, etc.)
• Then I reflected realistically how much I have spent on these things in the past and how much I would like to spend (making some major, yet feasible, cuts in some categories.)  Some things are set and I know how much they will be, so that part is easy, but things like entertainment/dining out, shopping, and groceries are trickier.  I figure I'll try out certain amounts this month and see if I need to adjust that budget slightly, but I'm hoping it will help me be more sensible with spending. (I obviously was subtracting these amounts from my income making sure my budget worked well with my earnings.)
• When I get paid each month, I plan on withdrawing the total amount I have set for the envelopes, and labeling each envelope with the category and dollar amount I have for the month. *The only thing I will use with a credit card is gas.  Then, I will do rent, savings, and other bills through my checking, but other than that I will do all envelopes.  My envelope categories are: groceries, entertainment/dining out, shopping, and miscellaneous (for gifts and anything random that pops up.)
• I haven't decided what I will do if I have extra money in my envelopes, I might let it roll over to the next month, still trying to decide on that one, but when I'm out, I'm out…

How do you budget?  Do you do the envelope system?  Any tips or ideas for making this system successful?