Chances are, by now, you have heard about the Cash Envelope System. Especially if you have ever heard of Dave Ramsey.
I have been using cash envelopes now for several years, and to be honest, I cannot remember when I started. I know I began budgeting when I was 10 years old. Yes, you read that right! I only wish I had the concept of cash envelopes then. When I did start using a cash envelope system later in my adult years, it really made my life much easier.
Just in case you haven’t heard about the cash envelope system, it is really simple. From each paycheck, the amount of money budgeted for expenses that can be paid for in cash is put into an envelope. Examples of these categories can include, but are not limited to: groceries, clothing, meals out, pet food and vet visits. Then, instead of using a debit or credit card to pay for these items, you simply use the cash previously placed in the envelopes.
Here is how it works for me:
Each paycheck, I get my grocery, gas, vet and pet food money and place it in the appropriately labeled envelope. Using my grocery budget as an example, I divide the cash allotted into Week One and Week Two (as I get paid twice a month). I then use the appropriate envelope when I go grocery shopping for the week noted of the pay period. If I have any left over from Week One, I put it in the Week Two envelope, should I have anything left over from Week Two, I put it back into the Week One envelope to go with the money budgeted in the next pay period.
This works the same for my gasoline. I happen to have a gas station near my house that allows customers to select to “Pay Inside”. I select the “Pay Inside” option, fill up my tank, take my pretty gasoline cash envelope in and pay in cash. This has been working wonderfully for years.
If you have noticed the cash envelopes that I have pictured above, they are custom made by… myself! I created a template years ago and started making them. They are laminated and last a LONG TIME! Plus, you can make them out of any pretty paper you want!
Next month I will be writing a post on how to make them and offering our readers a free downloadable template to use. So stay tuned and you too can make your own cash envelopes that will make it fun to use the cash envelope system!