Jun 4, 2014

Why we use cash envelopes...

Good morning! 
Today I am excited to share with you the reason why we use cash envelopes for our budget. I will not be able to break down our entire budget today but I will be posting that in the next couple of weeks. 
Stay tuned! 

{Image Bliss and Blunders}

Since we are newlyweds and both have pretty regular full time jobs, it is very important that we have a strict budget AND stick to it. (that is the hardest part sometimes.) We want to be able to tell our money where to go and not get to the end of the month and wonder where it went! 

In September last year we took Dave Ramsey's Financial Peace University class. I am sure most of you have heard of it and if you haven't then you should DEFINITELY look into it! This is an amazing class and we learned SO much from it! 

One of the major takeaways for us was that it was very hard to stick to a budget using our debit cards. They were so easy to swipe any time we needed to. We had no emotional attachment to our money because we couldn't see it leaving our wallets. Since that time we have started using the envelope system and LOVED it! We have been able to see where our money is going and able to control how we spend it! 

Here are some steps to create your very own envelope system for your budget! 

1. Sit down and talk about what you would like to use cash for and create categories.
Some examples of the categories we use are: 

-Care Repairs
-Spending money: LP
-Spending money: JP
- Entertainment

Your envelopes are not limited to these categories. Some people use the envelopes for gas. That doesn't really work for us but you can definitely add it if it makes sense for your family! 

2. Talk about how much you need each month for each category
Remember, this is to save you money so try to be as frugal as possible when deciding how much to put in your envelopes. BUT also be realistic. If you have a family of four and you think you are going to be able to spend just $100 a month on groceries you are either amazing at couponing or you are not being realistic. 

3. Cash your money and gather envelopes. 
You can either use regular, white mailing envelopes or you can buy a coupon container like this and separate your cash into categories in that. We used to use the white, mailing envelopes but they kept ripping and we were tired of going through so many. Since then we have used the plastic coupon case and it has worked great! You can get these coupon cases pretty much anywhere. I got mine at Walmart but I am sure Target has some pretty cute ones! 

4. Only use what is in your envelope! 
This may the most important advice I give you today. When it comes time to spend money from one of the categories, use only the money from the envelope, and keep your receipts! Every week I go through my envelopes and check to make sure we are using the right amount of money for my categories. If it looks like I spent a lot of money on groceries one week then I will make it my goal to spend less the next week so I have enough. Because the rule of the envelope system is when the money is gone, you are done spending! 

5. Any money leftover in your envelope at the end of the month carry over.
 This is one of the fun parts! If you have leftover grocery money at the end of the month, use it for the next month. That way you wont have to take out as much cash the next month. You will actually be able to see the savings! I love that!

6. Give yourself some grace. 
Now, remember that we are rarely perfect at something the first time we try it. The first couple of months that we used this system we messed up more than once. Just learn from your mistakes and strive to do better the next month! 

It amazing to see how much this help you keep track of your money and stay on budget! Some people use the envelope system without the envelopes and just keep track of what they are spending with their debit cards. If that works better for you then that is great but it does NOT work for us. We need to see the cash leaving our envelope to be able to understand how much we have left to spend. 

Hope this helps you save some money and improve on your budget! It has sure helped ours! 

Have a great day! 


  1. I love that you posted about this! My husband and I took the Financial Peace course last fall, and loved it. We NEED to try this method for our money though. We've gotten bad about using cash, but we make our budget every two weeks, and I love knowing where our money is going! This will help us with our spending money though. Thanks for the reminder to stay the course! :)

  2. My hubby and I took the Dave Ramsey class, but haven't done the envelopes... We should consider it though - it's terrible, I go to the store and don't even hear the total... I just swipe my card because I know I have the money. I need to be much more intentional about prices of things and saving.

  3. my husband and i are putting this into full gear next week! we actually tried it a couple of weeks ago and failed but we aren't done trying. thanks for this post, it's helpful!

  4. We love the envelope system… but we do it even simpler ( I think it is because we just don't spend much)… groceries and eating out, unless the month calls for one of the other expenses!