“When is a good time to call? On the weekends or anytime after 9:00 during the week, that is when my free minutes start.” In the current days when virtually all cell phone plans have unlimited talk and text anytime, this opening conversation has gone extinct, along with the phone plans that went along with it. Before unlimited talk and text began there was a beautiful concept called the “rollover” plan. A great feature of this plan involved rollover minutes, where any minutes that you didn’t use during a particular month rolled over to be used the following month. This process would continue until you changed plans or updated phones. I remember how freeing it felt if my family didn’t use all of our minutes, to have them added to the next month. If you experienced these same feelings of excitement and relief for rollover minutes, I have great news for you! You can apply the same principal of “rollover” to your budget! Here’s how!
First, if you are not currently on a budget, it is always a great time to start tracking all of your income and all of your expenses. The goal is to have them equal zero at the end of the month. For more information on how to start a budget, please refer to my post on how to get started. Once you have your budget set up, a next great step is to create a system where you can take advantage of rollover money. The rollover system my wife and I started a couple years ago involves paying for certain expenses every month using cash and an envelope system. It has been proven that people spend less money when purchasing items with cash than when using a card. You can choose whichever expenses you want to cover using cash, but for my family, we buy all of our gas, groceries, and miscellaneous household items using cash only. At the start of the month we take out all of the money we have budgeted in each of these categories and put them in an envelope storage system like the one pictured here. We created a tab for each expense: food, gas, household, and we each had a personal fund each month (more on personal fund later). Additionally, we made a tab for rollover in each category and we were set to go.
Putting it into Action
Throughout the month, spend your money according to your planned budget, using cash to cover the designated expenses. It is crucial that you do not overspend on items, or your budget and rollover will not be effective. Once the month is over and you have paid all of your expenses, the rollover fun begins! If you have extra cash left over at the end of the month in any of your cash categories, it simply gets moved from its original tab to the rollover tab. For example, if you had $10 remaining in your food budget, place that $10 in the “food rollover” tab. The same goes for gas and household cash.
At first, this may not seem very exciting or even beneficial. You may be thinking, “I could have gone out to eat with that money,” and you’re right, you could have. But the magic of the rollover does not happen with just one month, it is when you add extra money to it repeatedly over many months that the rollover fun builds into something usable. As your rollover funds build, you can spend it however you’d like such as paying down debt in loans, car payments, or turning it into savings. The way my wife and I use our rollover funds is to reinvest in the category it came from. Our food rollover money gets reinvested in food. It helps us stock up on frequently used items like chicken, oatmeal, almonds, rice, pancake mix, baking supplies, frozen vegetables, peanut butter, or any other foods we need. The gas rollover money is reinvested into needs for our two vehicles, making it extremely versatile. In the past year we have replaced a full set of four tires for one of our cars, got the same car deep cleaned inside and out, and paid for new vehicle tabs. It made these extra expenses very low stress because we didn’t have to take money from a different area of the budget, or deprive ourselves in any way. Instead, the money was sitting in a convenient fund ready to be used thanks to our rollover.
Go Do Great Things
Budgeting can be stressful, but it doesn’t have to be. One way to alleviate stress in finances is to start paying cash and create a rollover fund. When unexpected expenses come up or you need to make updates in your house, freezer, or vehicle, having a rollover fund can be a life saver. Leave a comment if you have any questions, and let me know how your rollover is going!