How to Get Out of Debt, Save money

Cash envelope system – How to Use

Save money with the cash envelope system

What is the cash envelope system?

Save money with the cash envelope system

Save money with the cash envelope system

Dave Ramsey is well documented as promoting this approach. Basically it’s all about taking budgeting back to pure cash. It helps you save money by having the money physically in front of you as you pay for items. The theory is that you will be more likely not to overspend, because you are handing over real cash and not just tapping a card reader.

You have different amounts of cash stored in different envelopes. The budget is determined by what you can afford.

If you’re anything like me, I tend to overspend if money if it’s not in my hand and physical.

My card was becoming overheated with spending recently! Seriously, I am far from perfect and I’m always trying new things to keep me in order and able to explain to myself my spending every month!

 

So from this month on I am going to try this system for my spending.  It doesn’t involve already setup direct debits. I will try it, one envelope at a time.

How does the envelope system work?

The envelope system, in my humble opinion, is best used for ongoing expenses such as groceries, children’s activities, coffee, going out, eating out and fuel.

So here’s the plan: 

I am going to build up every month and control each of these areas of my budget with the envelopes. I figure I spend too much on coffee, so this will be my first envelope to control.

Cash budget with hearts cash envelope

Cash budget with hearts cash envelope

Cash budget with hearts cash envelope

Cash budget with hearts cash envelope

It works on the principle that you have to watch the money and plan throughout the month to make it last.

When it is gone, that’s it – it is gone.

Scary right?

At the end of the month I will check my spending and if there is any money in the envelope, I will put this towards another kind of treat for myself. Woop!

Record your actual spend

Also, I will record on my monthly budget sheet what I actually spent, and record this to inform my next payday’s budget.

Are you thinking of starting a budget and reducing your spending? Try my free monthly budget planner to organise your personal finance. UK and US version available. Space to customise and use with cash envelope system.

New Free Budget Planner UK version

Grab my free budget sheet here – yas for FREE!  UK

Are you thinking of starting a budget and reducing your spending? Try my free monthly budget planner to organise your personal finance. UK and US version available. Space to customise and use with cash envelope system.

New Free Budget Planner US version

Grab my free budget sheet here – yas for FREE!  US

Guess what guys – I have a whole range of these envelopes in my shop – you’ll love them!

They are fully:

  • downloadable – this will not expire!
  • printable – in every series there is a white envelope, so you can customise your envelopes with funky or coloured paper.
Are you searching for easy ways to get out of debt, save money or reduce your monthly spending? Do you want to achieve financial freedom? Then a budget is essential. Read how I use my budget binder to produce a budget for my monthly spend, and tell my money where to go. #budgetbinder #budgeting #savemoney

Flowers cute red

 

 

 

 

 

 

 

 

Take me to look at the pretty flower range envelopes! 

Do want to try a cash budget? Are you following Dave Ramsey's baby steps plan? These cash envelopes are an unlimited download and make budgeting fun!

Get these cute animal cash envelopes for only £3.99!

 

 

 

 

 

 

 

 

Take me over to see more of the cute animals range! 

Are you searching for easy ways to get out of debt, save money or reduce your monthly spending? Do you want to achieve financial freedom? Then a budget is essential. Read how I use my budget binder to produce a budget for my monthly spend, and tell my money where to go. #budgetbinder #budgeting #savemoney

Walt Disney Inspiring Cash Envelope

 

I want to explore the inspirational quotes series cash envelopes! 

   Pin me for later!

Dave Ramsey's Cash Envelope System - How I'm Using it

Dave Ramsey’s Cash Envelope System – How I’m Using it

Baby Steps

By taking baby steps, I will be more successful first time and I can assess whether the cash method works alongside my other strategies. (I pay for most things via my Virgin card, as it earns airmiles. If we already enough for a return trip to America via Virgin’s sale, I will revert to spending in cash, using more envelopes quicker).

Rules for the Envelope System

Rule 1

Don’t withdraw your whole budget for the month for the larger spends. For example, if your grocery budget is £300, withdraw £150 for the first 2 weeks. Then 2 weeks later, withdraw the final £150 and put that into the envelope. This is your budget for the month. By withdrawing the second £150 at this point, you are forcing yourself to live on exactly half of your shopping budget, for two weeks. It prevents an early overspend.

Rule 2

Money from one envelope must never be transferred to another. If you are in the grocery store and as you are shopping, you figure you are about to overspend by £10, put that amount back and keep the essentials. It is strictly about keeping within the budget in each budget area. Challenge yourself to use food from the cupboard, or bulk freeze meals, to cut costs of grocery shopping further.

 

Remember to treat yourself if you stay within budget.

I mentioned before that I plan to treat myself, if I stay within budget. This is crucial to me and has always been an important feature of my budgeting. This way I stay motivated to achieve my goals. I always think of ways to look after and value myself, so I suggest you do this also, and you will become more excited and positive as time goes on, as you reach your end goals! It might be that you have £15 left over in your beauty budget and you decide to roll it over to the next month. Maybe you love a glass of wine in a great wine bar in town, or meeting up with a friend for a fancy coffee. It’s all up to you!

Try not to cheat the system

This is the most important point to remember: you cannot swap money from one envelope to another. This method is purely designed so you keep within a strict budget and control your spending.

If you run out of money for eating out, cook at home cheaply, using your grocery budget. If you run out of kids’ activity money, take them and the dog out to the local park for free, or go for a walk on the beach. Get to know your pet’s quirks, to save money within your vet budget envelope. There are many ways to save further money, by being creative!

 

Related Resources

Guys, also you might love this – my 2019 Budget Binder. It goes sooo well with the cash envelopes.  I love having everything in a cute folder too! 

 

Read my post on how I developed and use my budget binder. 

 

See my related posts:


As always leave your comments and replies – we are all together in this and you could have an inspirational idea for other people to try out!

If you have any questions about how I am using the cash envelopes, please feel free to ask.

 

 

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