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A Realistic Way To Using Cash Envelope System

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Alright, everyone, it is that time to talk about The Cash Envelope System and if it does work.

Let’s begin, shall we?

It’s not a secret that we love to save money, and we avoid getting into debt around here. The reality is that we are not perfect, we are human with impulses, and we love to spend money; maybe too much!

To avoid overspending, and save our money, we follow a budget. When we mean business, we use the cash budgeting system in this house. We save money using the cash envelope system.

What is the cash budgeting system, or the envelope budget system?

How I learned about the cash budgeting system was when I read The Total Money Makeover: Classic Edition.

Though I enjoyed reading his book, I don’t agree with 100% of his techniques. That doesn’t mean it didn’t help me; I am pretty happy to have found this book and learned from it.

I also recommend this book for those who want to get serious about their finances.

OK, back to the cash envelope system.

What is this cash envelope system I am talking about?

This is a quick summary of how this cash envelope system works:

  • You budget your paycheck.
  • You create categories for your budget.
  • Write the categories on blank envelopes.
  • Fill the envelopes with cash selected for each category on your budget.
  • When the money is gone, it’s gone. You can’t refill your envelope just because you spent the money. You can’t go back to your bank account and withdraw money from your account to stuff your envelopes.

As I have mentioned before, this method must be done the way it works for you. If you do a bi-weekly budget, weekly, or monthly budget, you have to follow the rules above. This method must be done according to your pay periods.

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Is The Cash Envelope System For You?

When I first tried the cash envelope system, I hated it!

I will be honest and tell you that I completely dislike it. I feel uncomfortable carrying a certain amount of money with me and writing it down.

It seemed to be too much stuff for me to handle. The purse will get heavy with change, and sometimes I will forget to write down the transaction, etc., etc.

I know what you are asking, and I got the answer for you.

As much as I dislike the cash envelope system, it works.

It helps us save money, believe it or not.

Another important reason it works for us: Commitment

If you are dead serious about saving money and controlling your finances you will stop the excuses. The system works!

We can come up with excuses as much as we want, but the reality is that it helps us save money.

We were committed to getting our finances under control and we kept at it.

Know Yourself

I know how I am and I know what I spend. Overspending my money is the reason why we got into this mess in the first place

If I know that I have my debit card, I know that I have more money to spend, I sometimes give in and I overspend.

When I commit to the envelop system, I have no credit cards, I have no debit card, and I have no checkbook. I only have the cash I brought with me to the store.

Why not use my checkbook?

No, I don’t bring a checkbook with me because I know I can overspend. I see a checkbook as a debit card/credit card that I will use it and spend it.

If you are saying it is not, I’m not sure if you have noticed how personal checks are being endorsed when you shop; they are processed as fast as a card.

Again, I am telling you why I do this and the reason why is because I know myself and how I am.

I know that if I have this backup money, I will overspend.

Do we practice the cash envelope all the time?

To answer your question, the answer is no.

The cash envelope system is done when we want to save as much money as possible.

When we decide that what we have set is not working or we need to save for a major event, we used the cash system.

Now let’s talk about the annoying part of using the cash method.

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What happens if I forget my envelopes?

I mentioned earlier that I hate using cash because I will forget the envelope. As much as a pain in the ass as this was, guess what I did?

I went back and I got it!

I have heard this so much, it becomes annoying.

Seriously, if you fear that you are going to go out and forget your cash, it’s the same thing as forgetting your wallet.

This method takes time, but if you are seriously trying to attack your debt and get your finances under control, you need to do this method.

Why it helps me save money?

When I use the cash envelope method, I saved a lot of money and if you have read the above you will know that this method helps to:

  • Be aware of your money
  • Control your spending

It helps me save money because it makes me challenge. I want to be able to have some money leftover in my envelopes. I become more aware of how much I have and I become more creative in my saving ways.

One thing I do is I tend to gather all my loose change and place it into a jar. I am more self-conscious about how much money I have left in my envelopes.

Again, most importantly, psychologically it helps me stay focused on my spending. It’s because I love to have money inside my envelopes at the end of the month, I tend to do much better.

Free Cash Envelope Templates

Ready to start your cash budgeting journey?

Fill out the form and download these 3 cash envelope templates at no cost to you.


The cash envelope system taught me self-control. Though, I am honest when I say is not my favorite method, but it works when we implement it.

Until you reach your goal and you get to know yourself and get your self-control, then the cash envelope method is for you. Maybe after a while, you will get to enjoy it. Many people do and have done great with it.

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