![]() If you are debt free, you can roll the money over into next month’s budget or use it to reward yourself.ĭepending on your finances, some families have what is referred to, as blow money. ![]() The envelope method is tailored to those in debt or who are simply having difficulty handling their monthly finances. My first recommendation is to pay off any outstanding debt, if you have money left over. Spending less than your anticipated budget is the ultimate goal of the envelope system. What do you do with the leftover money, if you ended the month with a surplus? Good job! The envelope system worked for you. You are not allowed to use a card for additional money. You cannot go over budget or borrow from another envelope. The envelope system only works, if you abide by the rules. Therefore, if your bill is 205 dollars, you must return an item to the shelve. If there is $200 dollars in your grocery envelope that is all you spend on groceries. If you always go over your budget with groceries, then that will be your area of focus. Give special detail to the area in which you struggle.īe mindful of your lack of discipline in any particular area. When you get paid, place the money in each envelope as budgeted. The key is to be exact as possible without becoming overwhelmed with envelopes. Some examples of monthly spending are groceries, dining out, entertainment, clothing and gas. To be precise, you should break monthly spending down into categories. You should have an envelope for bills, debt and monthly spending. Label an envelope for each expense and write the allotted amount on the envelope. Here is how to get started: Sit down and budget out your monthly spending. ![]() How to implement the Envelope cash system Yet, I will swipe my card to spend $20 dollars in a heartbeat.īefore going to the next section, check out our 12 toddler steps to financial freedom and Financial pyramid to put your financial life in order to get the basics. I will literally walk around a with $20 dollars in my purse for weeks and be very selective on what I would spend it on. Cash in your hand can be difficult to part with. The envelope system is a tried and true method because you can physically see the cash and determine your spending. In the voice of Dave Ramsey, “What’s in your wallet? Cash.” We are putting way too much faith in those plastic rectangles in our wallets. This was alluded to in the post about saving more and living better during holiday seasons.įor those who are not aware of the envelope system, ![]() I think we need to bring back the use of cash. Little did I know at the time that I was implementing a form of the envelope system. I never starved or called my parents at home for assistance. My budgetwas extremely tight, but using this method, I always made it to the next paycheck. I separated the money and jotted down how I would stretch every cent for the next two weeks. I would get back to my dorm room and quickly crunch the numbers. I remember going to the bank, cashing my check and the bank teller would hand me an envelope. I worked in an office as a student secretary and got a small bi-weekly paycheck. I wanted to be able to afford groceries and other basic necessities, without having to constantly rely on my family. When I was in college, I worked a part-time job to be semi-independent and support myself. The Envelope Cash System – Mrs Breathe Easy Finance
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