Cash Envelope Systems???

Thursday, July 01, 2010 Aimee Larsen 10 Comments

Recently during my marriage study, I was convicted to help my husband with our finances, but I am doing so blindly and probably not very well.  I have heard of two different programs that involve the cash envelope system and a friend of mine has done one successfully.  She fell out of it but is  going get started again.  I absolutely love this budgeting methodology but I don't understand it, in other words, I love the idea.   I feel like the first thing I need to do is run out and buy the book my friend recommended by Dave Ramsey.   The second thing I feel motivated to do is to create a system and I found some really good looking ones that I can make on my own, that will appeal to my crafty side (even thought I'm sure I can just use simple envelopes I already have).  The image above is one from Kelly Ratzlaff with a free template and tutorial HERE.  Don't you just think it's adorable?  I also found tutorials here, here, and here.

Do any of my readers out there use this system?  If so, does it work?  If not, have you considered it?  It sounds to good to be true.  Please tell me it is good!


  1. I just recently finished both of Dave Ramsey's books. My husband and I have decided to give it a try. So far, it's working really well (only been using this system for a couple of weeks). There are a few times where we've used the debit card instead of cash, but we switch out how much we would have used when we get home. I have found it helps to have a set amount to spend and then not go over that.
    A lot of it is, I think, the mindset you put yourself in. If you see it as a chore, you won't want to do it. If you do it with the motivation of helping your family and trying to make your money go farther for you, it won't be a big deal.

  2. Last year my husband and I were in a very deep hole with our money. We both had an income but at the same time we never had any money. We were overdrawn on the checking account every week. We would go to the ATM and take out up to $300 that way we would only have one overdraft fee and then the following week, the checks would already be spent. It was never ending. Our counselor told us about the envelope system and Dave Ramsey. I started researching it and when we got our tax refund we got all the bills straightened out and began the envelope system. I have since created my own variation of it. Like, instead of doing it weekly for each bill, I take $250 each week for the rent and it goes in the envelope. Then each week I will pay the electric bill and the water bill. Following week it will be rent and cell phone bill. 3rd week will be rent and auto insurance. Final week it will be rent, satellite and internet. It has helped us tremendously! Now we have extra money and our bills are paid on time every month. I dont really budget groceries because it varies. I know what we have each week and buy accordingly.

  3. When I got married in 1985, my grandfather gave me a little book of envelopes. That was my introduction to the cash envelope system. He explained to me how it worked and I used it for years. Not too long ago I came across that book and thought about implementing it again and sharing the systems with my boys. Especially my oldest and his wife as they are not financially disciplined. It really taught me how to budget and not to spend money I did not have. I am not familiar with any of the more current systems but they seem to be the same as what Grandpapa gave me so many years ago.

    When I bought my current home, I set up a separate bank account strictly for my home. Each paycheck I have a certain amount direct deposited into that account and it goes toward my mortgage, taxes and insurance. I never have to worry about paying my mortgage or having the money to pay my annual homeowner taxes. It is always there. I never touch that account and NEVER "borrow" from it. Even in hard times, I can be assured that my mortgage will always be paid.

    ~ Tracy

  4. my husband and i are planning to start using Dave Ramsey's system. i know it will be hard at first but I want to make it work tohelp out our family. hubby is pretty good with finances but i am not.

    we have had several friends that have used either a general envelope system or specifically Dave Ramsey's and most have said it is tough but so worth it!

    we have a friends that have been married a little over two years and this spring they celebrated paying off all their debt! simply by following Dave Ramsey. so I know it can work

  5. we have been using Dave Ramsey's Financial Peace University concepts for a few years now.

    It's easy to work it all out on paper. Putting it in to play is another story.

    We've been successful in changing our "money spending" thinking.

    I don't use an envelope system, per se. I pull out my grocery, gas, and blow budget and then go straight to the grocery store and gas pump. I know that what I have left over is mine to "blow". However, this doesn't mean it's mine always....I use it for happy meals and drive-thru shakes for the kids. (us mommies have very little blow money for ourselves...)

    Overall, I love the envelope system. It has helped me in discipline. It's helped our marriage cause there's never a question as to where the money went. It has helped us save.

  6. This is an issue that I am passionate about. One of my best friends uses this system of Dave Ramseys. Like others have said though in order for it to make a bit of difference you have to stick to it. For example I am terrible about spending all my out to eat money that I have pulled out and than something comes up and we need to go out for some reason and I dont have any in the envelope I am bad about dipping into other money to "borrow" from myself. That wont work....if you do that it doesnt acutally help you you have to stop spending when the money is gone. Simple yet hard I know...b/c it takes saying no to things. I mean when someone invites you to something you werent planning and dont have the money budgeted and people alot of times dont understand why you say no to things. My friend says that people will think you are odd if you are managing your money right b/c you are going against the grain. There is so much in the Bible about money and money management. This subject is always so interesting to me. I say go for it. I use the system in away. I pull out cash for out to eat dining and groceries. Everything else I pay out of our bank account I just no which bills get paid with which check and stuff. So, I need to tweak it. I need to use less money on out to eat that is my weakness it just seems too easy to go by a fast food or whatever and my family is forever asking us to come eat here and come eat there with anyway this is something that needs to be cut back, and I need to funnel more into savings for sure. So, there is still room for improvement but be careful you can become obsessive with this if you focus too much on it, keep a balance and dont drive yourself crazy just do what you can and build on that :)

  7. I agree with Brandie~ it's so hard not to 'borrow out of the other envelopes! We did the Dave Ramsey thing several years ago (and still do to a point), and the biggest challenge and game-changer for us was that if one envelope was empty we just couldn't spend. We had several weeks where the food budget was blown, and we ate pasta and other stuff from the back of our pantry for a day or two! But in the end that was really good for us, and now we are pretty great money managers! Once the cash system became a bit easier for us, we switched to using debit for convenience sake, but we still work it the same way. Good luck!

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  9. I think the envelopes system is great. I've never read any books on it but downloaded a free application for my Android phone (I'm sure you can get them for other types of phone too) and it works a treat. You don't have to withdraw cash all the time, you can make debit card payments and then instantly record the amount spent on your phone with a few easy taps. The app does all the maths for you and you can just press a button each month to reset the envelope amounts and take forward anything you might be lucky enough not to have spent last month!

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