The Cash Envelope Budget System

I can’t remember a time when I wasn’t savvy about saving money, I’m always trying to stretch our budget that little bit farther. In an effort to take better control of our finances I have decided to give the cash envelope budget system a try.

I’m always inspirational and frugal blogs about how to save money and become debt-free and kept coming across articles about using cash instead of debit cards for your weekly or monthly budget. The idea is that your money is stored in different envelopes depending on your budget, for example, you could have one for groceries, one for petrol and one for fun expenses.

I started using the envelope system at the beginning of January and so far it’s working really well for us, when you physically hand money over it makes you more careful about spending it. If we find we have money leftover we have been putting it into an envelope and using it to make an extra payment towards our credit cards or for a family day out. As much as we want to pay our debts down quickly we also need to be able to have a treat or life would be very dull and we would quickly lose motivation.

Cash Envelope System Categories

  • Groceries
  • Childcare
  • Fuel
  • Entertainment
  • Car Maintenance
  • Pets
  • Toiletries
  • Hair Cuts
  • School Expenses
  • Pocket Money

I’ve found that using the budget envelope system is helping me avoid overspending, I can see exactly how much money I have left and there’s no temptation to swipe my debit or credit card.

Another great side effect of using the envelopes is that our ‘loose change’ sealed money box is filling up nicely. Any leftover pennies have been going straight into the money box which we will add up at Christmas and spend it on a nice treat for the whole family.

Using a cash envelope system also helps to keep your budget balanced because you will need to regularly keep track of your spending. Budgeting this way really helps you to develop a healthy attitude to your finances too.

I’m so glad we have given the envelope system a go, I feel like we are telling our money where to go instead of it disappearing in dribs and drabs from the bank. It’s helping me budget better for our groceries, meal plan and avoids food waste at the same time.

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