Budgeting is an essential part of everyday life.
Learning How to Budget Using Envelopes and Cash is a great way to really get control of your personal finances once and for all.
How to Budget Using an Envelope System
Budgeting allows you to allocate your money where it needs to go, so that you are able to keep up with bills, while still being able to put food on your table, and a roof over your head.
But sometimes sticking to your budget can be tricky.
The envelope system is a nearly foolproof way to stick to your budget because you can physically see exactly how much money you have at any given time.
You can buy a complete Cash Envelope System off Amazon or grab the free printable cash Envelope system I made for you here.
Cash Envelope System
Below you’ll find all of the basics of using envelopes and cash to budget your money.
Create Your Money Envelopes
First things first, you need to have an envelope for each category in your budget.
Remember, you can buy a complete Cash Envelope System off Amazon or grab the free printable cash Envelope system I made for you here.
Cash Envelope Categories
- Groceries
- Gifts/donations
- Utilities
- Gas
- Car repairs
- Mortgage/Rent
Do not limit it to just those six categories, through. Each category gets its own cash envelope, each labeled on the outside, with the category.
Have one envelope for everything in your budget!
Don’t forget to include your Emergency Fund Savings envelope.
You can use any envelopes you have available for this budgeting system.
I love how happy these colorful envelopes are, or feel free to use these ones that I have made for you.
Cash That Paycheck
Once your lovely paycheck hits the bank, be sure to head to the bank and retrieve your cash, so that you can allocate it to the proper envelope.
You may find it easier to ditch the direct deposit completely, so that you can’t use laziness as an excuse not to go.
When you leave your money in the bank and use a debit card to spend your money, it can be too easy to spend more than you had budgeted.
It’s far too easy to put off going to the bank, unless you have a check that you have to cash.
Once you have your money in hand, sit down with your budget and decide how much of your paycheck each week will go to each category.
Be sure not to cut yourself short.
If you need the money for groceries right away, put what you need in the grocery category, and then divvy the rest up among the other envelopes.
Use Your Cash Envelopes
When it comes time to pay your bills or buy groceries, it’s important that you only use the money from the proper envelope.
So, if you only have thirty dollars in your fuel envelope, you can only buy up to thirty dollars worth of gas. If that’s not enough, get creative, and consider other options.
Carpool with a friend. Put off your errands until next week, when you have more money for more gas.
In order for the envelope system work, it absolutely unacceptable to dig into other envelopes!
Save Extra Money
If you find yourself with extra money after shopping at the grocery store, it does not mean that you have to go back in and buy more food.
Put your extra cash back into the envelope, when you get home, and save it for the next trip.
If at the end of the month you still have extra, pat yourself on the back!
Do not hesitate to treat yourself and buy something small with your leftover money on occasion, and then put the rest into your “rainy day” envelope.
Or keep it in the grocery envelope to use when you find an amazing stock up price on meats or other more costly items.
READ MORE: How to Save Money on Groceries
Budgeting using envelopes and cash can be tricky, but once you get used to it, you’ll be glad for this new way of doing things.
Do you budget using envelopes and cash? I’d love to hear your tips!
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- How to Save up an Emergency Fund – How to Save Up an Emergency Fund as fast as possible, so you can deal with any unforeseen expenses that might come up and try to derail your budget.
- How to Fix Your Credit Score Yourself – Your credit report is yours, it presents a picture of who you are to a creditor. Make sure they see the real you and make sure you take care of your credit so that you don’t have issues arise in the future.
- Simple Steps to Tackle Debt – These are the same steps we took to get out of debt years ago.
- Printable Debt Snowball Worksheets – These printable Debt Snowball Worksheets are super helpful when following this method to get rid of debt.
- Printable Budget Planner – Use this free printable budget planner to help you take control of your finances once and for all.
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