Does Anyone Do the Envelope System?

Updated on August 02, 2011
S.J. asks from Cherryville, MO
20 answers

For purchases that are not "have to's", such as groceries, clothing, fun money etc, do any of you do the envelope system where you will take a certain amount out of your bank account for the designated item, in cash, and once that is gone, it is gone? Did it work for you?

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So What Happened?

Thesesa! Lol. OK, yes, you must eat and cannot be naked in public (not always). I should change it to eating OUT. Now that, according to my husband, is a HUGE no no!! =)

Jennifer T - You are amazing! I bet your husband is just head over heels for the way you take care of the family.

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answers from Albany on

Wait, groceries and clothing are not 'have to's'? Yikes, sounds like you've been talking to my ex!!


11 moms found this helpful


answers from Lynchburg on

I can't afford the envelopes!!!

"Too many envelopes...not enough cash!!!"


9 moms found this helpful

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answers from Youngstown on

We use an electronic envelope system for our budget. It is called Budget. You can search for it online. It has helped tremendously for our bills and such.

7 moms found this helpful


answers from Chicago on

My ex-father in law did this religiously and swore by it. I (being at know-it-all 21 year old at the time) thought it was a bunch of phoey!!!!!!!

Now I'm a not-so-know-it-all-almost-40-year-old who just graduated with a master's degree that should have made me rich and instead has stuck me with a $50,000 student loan bill and no job prospects since I career changed and now have "no experience" - gave the background info to let you know my money is so tight it squeaks.

I have started using the envelope system and I LOVE IT. It has also done wonders to help my 10 year old learn how to budget. She could understand budgeting before, but there is something very sobering about looking in the "fun" evelope and only seeing $3.50 on the 16th of the month!!!!!! So instead of "creativlely" "moving" money around (that was invisible because it was all via the debit card and then usually resulted in something being floated to next payday). Now we realize and LIVE that we only have $3.50 for fun for the rest of the month!!!!!

The BEST thing for me was no longer carrying my debit card with me to work - because it was really really really easy for me to be too busy in the morning to pack my lunch and say "oh I'll just buy it at work" but now since I don't carry my debit card if I don't pack my lunch I don't eat!!!!!!

7 moms found this helpful


answers from Dallas on

yeah, with the exception of the bills that i have to pay online or send off(mortgage, electricity, tv/internet/phone, gas, water, vehicle insurance, etc.) - i have a business envelope sized "binder"(it's enclosed on all sides so nothing can fall out) that i keep several envelopes in:

my money(gas and fun money)
dh's money(gas and fun money)
kids allowance(they each get $1 per week per year of age)
household expenses
dog expenses
eating out/entertainment
dh's bday
my bday
kid #1 bday
kid #2 bday
kid #3 bday
friend's bdays

i'm sure i left a few out, but you get the drift. i get money out on each payday(15th and last day of the month) and have a designated amount for each category. in general, we stay within the realm of the budget. it does feel good to not feel the xmas/bday pinch(all three kids are within a few weeks of xmas, as am i!).

edited to add: i also do this for vacation! we went to CA last week, and i took all my usual envelopes out of my binder and put them and their contents in our safe, and made a whole new stack of envelopes, i didn't want to go over what i had budgeted for spending while on the trip, so i had envelopes such as:

dog sitter
airport snacks/drinks on way to CA
parking(airport, disneyland, legoland, 1st hotel, 2nd hotel)
resort fees(1st hotel, 2nd hotel)
kids souvenirs
me and dh souvenirs
food - saturday
food - sunday
food - monday
food - tuesday
food - wednesday
food - thursday
food - friday
airport snacks/drinks on way to TX

we ended up coming home with $300 :)

edited again: thanks S., i'm sure he appreciates never having to deal with the money, just as i appreciate him working hard so i can stay home with our children :)

5 moms found this helpful


answers from New York on

Alot of older people use this becuase they came up in a cash economy. They also are used to not being in debt - so when the envelope is empty there's no more money left. It works.

Dave Ramsey recommends using it and I have to say I've been thinking about doing it - I can't believe you asked about it. People who study this stuff KNOW that when you use a debit card and have to spend $100 it's much easier to do. But if you have to shell out five 20 dollar bills you think twice about that purchase. Dinner out is a perfect example. My husband complains about how much I spend at the grocery store but he won't think twice of whipping out the debit card and spend $100 on dinner. Makes me crazy!

I think I may begin doing this for August and see how it works!

3 moms found this helpful


answers from Washington DC on

at one point I did - when i was living worked for a while. it was easier because I was dealing with USD and DM - before they went to the Euro....

But now? I believe I've stated before, we are a cash only family so I clip coupons and shop on a budget of $200 for 2 weeks...we do buy our meat in bulk - like from Colorado Prime - chicken, fish, hamburger, etc...

3 moms found this helpful


answers from Pittsburgh on

This is common for lots of DR fans. And we are. But I've gotta say I've never used the physical envelopes.
Mental envelopes and a budget? Yes.
Are you using it now? Good for you!

2 moms found this helpful


answers from Salt Lake City on

We are using that budget method right now. Works great for us. We actually use our envelopes for everything except bills. We have a envelope for food, gas, cloths, entertainment, car maintenance, personal spending. It makes balancing the checking account super easy. We're on a really tight budget since my husband is a student so this is a great way to know what you have and when it's gone it's gone.

To help make the food fund stretch throughout the month I've had to become really organized and have compiled a months of dinner recipes. I go shopping at the beginning of the month for all of the staples for what is either shelf stable or can be frozen. After I make my large purchase I divide up the money by for and go produce shopping every week with my weeks allotment. It's been really good to be more conscience about my grocery spending. Also planning a head I can make my meals more healthy.

For my family the envelope method is the best thing for us.

2 moms found this helpful


answers from Denver on

Yes, sort of.... we use a jar though. We just went to a cash only system, withdrawing out cash for the month to cover groceries, gas, eating out onand all extras. We have no debt and put a great deal of my husband's paycheck into investments, savings and college accounts each month. We switched over to the cash jar mehod just to help us stay within our budget a bit better.... I, particularly, was using the debit card a bit too frequently without really knowing how much money I was actually spending. This method has really helped..... Now instead of running into the store and
gettng a few extra thngs each time, I get just what we need. Wo far we have stayed within our budget since starting the new system. Honestly, kind of like the challenge.

2 moms found this helpful


answers from Tampa on

OH MY GOODNESS! I thought my dad was the only one do ever do something like this! :>) I know people have budgets but I never thought anyone used envelopes. I grew up with this method. My mom actually made cloth envelopes that were labeled and had a recording sheet inside for deposits and withdrawals. My dad even took his paycheck to the bank each payday and had it broken down into certain bills just for the envelopes. The bank tellers knew him my name.
They had an envelope for EVERYTHING and if there was not enough $ in the envelope, you either cut back on what you were getting or you didn't get it.
I believe it truly worked for them. Though my mom shopped sales, I don't think we ever did without. They have a very nice house and a good retirement that they are able to be comfortable on. My mom didn't even have to work all the time. She was able to stay home until my brother started school and then worked part time for a number of years. When she did work full time, she was able to retire early for health reasons. If you and your husband can be disciplined and both agree on it, I think you will be very successful. Best of Luck! Thanks for the "smile" I got in reading your post to know my dad was not too kooky :>)

2 moms found this helpful


answers from Denver on

I would love to do this but my husband thinks that having everything traceable via credit card is so much better for the bottom line. I would believe it if I saw for myself some restraint in getting stuff we don't need. We were in Saint Louis a few weeks back and at the zoo I wanted him to buy ONE sports/sipper bottle with a drink he and the kids could agree on and not THREE bottles that I would be stuck lugging around the rest of the day. Well of course since one was $8 and three was $20 he bought one of himself and one for each of the two kids. What a bargain? Yes, I had to lug the bottles around in my bag the rest of the day. No, none of them finished even one of the drinks. Yes, the bottles were so cheap when I left an empty one in the car one day it melted beyond being usable for anything. I do like the idea of the envelopes I just think my husband cannot say no to the kids for anything and I am an easy target to complain about the overspending issues. What is that about pointing a finger at someone leaves you pointing three fingers back at yourself?

2 moms found this helpful


answers from Jacksonville on

Yes. We started doing this a while back. It isn't perfect (neither are we, lol) but it HELPS a LOT. It is amazing how much more I spent when I just swiped the debit card for things. Now I only do that for gas in the car. Everything else is cash (or a mailed check on bills like mortgage, electric bill, etc).

I do frequently end up with nothing left in the eating out envelope, but we still aren't spending as much "over" in that department as we would be otherwise. It also helps me not give in to the 'grab a takeout meal, it's easier/faster' monster quite so often. :) And if there is only $40 left in that envelope, we don't go to the steakhouse for dinner, we get sub sandwiches instead.

Cash is harder to spend than swiping is to do. Really. You have to actually pay attention to how much you are handing over!
It took forever for my husband to "get" how the "blow money" category works though, lol. He'd ask me for a dollar for the coke machine at work and get angry when I said "I gave you $20 three days ago" He'd say "I'm not walking around with no $ in my wallet"... and I'd say, I know.. I gave you $20.... That is a "blow" item any way you look at it! NOW he finally "gets" it. ;)

oh.. and I don't do if for the entire month. I do ours per paycheck. So every two weeks, I sit down (well, sometimes hubby sits down with me- we set up the basics together so there isn't much for him to do unless there is a problem or something out of the ordinary) and write out how the money will be spent. Our grocery budget is around $450 every 2 weeks. So I withdraw funds for that and spend cash only for grocery purchases--this includes dog food, allergy meds, etc... that is what that dollar amount is based on when we set up the budget. When that envelope is down to $40 and it is Thursday night, and we have 4 more days to get through, I REALLY meal plan and we don't host barbeques. :)

2 moms found this helpful


answers from Houston on

I don't do the envelope system, but I do try and keep on a budget. Haven't been doing to well on that lately, but getting back on track.

2 moms found this helpful


answers from Seattle on

That's ESSENTIALLY how our budget works.

300 for groceries
100 for my personal money
100 for my husband's personal money
50 for kiddo's school expenses
This money gets "paid out" on payday. Then we pay our bills. The surplus sits in the account until the next payday (for gas, copays, kiddo's allowance, and "must talk to the other and agree before spending dime 1" money.). Whatever is left at the end of the pay cycle gets split 4 ways. 25% to me'self, himself, kiddo's school account, and the OSF fund. "Oh Sh*t Fund" - for car repairs, vet bills, etc. At the end of every quarter, we put half the OSF account into long term savings.

((All of this is every 2 weeks. We have friends who get by on half, and friends who each get $1500 a week. This is just *our* budget, as it currently stands))

Personal money covers ALL personal expenses. Lunches out. Clothes. Haircuts. Gym memberships. Concert tickets. Birthday presents. Whatever.

We switched to this system several years ago. First several paychecks were rough, since I was used to "stocking up" on a card, then paying it off, and now couldn't. I had to save. It was REALLY hard on my husband (who had been griping for YEARS about my spending). Well, he had his comeuppance. Yeah. $10 a day for lunch at work = $200 every 2 weeks aka TWICE his personal spending money. $50 a day at the bar = $500 every 2 weeks (and I'm not including all the "small" daily other purchases... like $60 videogame, $40 ball tickets, $20 cover, $50 shoes. Yeah, hon. I was spending $300 every 2 weeks "bankrupting" us groceries for all of us... but your own "pie hole" money was $700 every 2 weeks, and your "incidentals" brought it up to $1500. Yup. *I* am the one spending $600 a month, while you drop 3k. It's all me. I'm bleeding us dry. At the time when we instituted our flat budget I was getting an EXTRA hundred dollars every 2 weeks (I'd never had personal money before) and he was "losing" 600.

Windfall money gets split 4 ways, as well.

It's not perfect. And SOMEONE screwed us over royally by taking all available cash (without talking to me; OSF, long term savings, kiddo's school account... ALL available cash) to pay most of the deductible (8500, total, we had about 6k in savings) from kiddo's medical expenses in Febuary. Idgit. The hospital was MORE than happy to take payments!!! So when we didn't get paid for a month... well... our dog has a broken foot and there is no OSF money. $350 MINIMUM bill we can't pay, so the poor thing is just gimping around, I'm an inch away from buying some black market ketamine to test on myself and then give to him to help ease his pain (because no vet will do payment plans, and we don't get paid till friday this week, and he did it thursday last). My car flooded (rain) in May, and has been undriveable for months because we have to replace the interior. $500 insurance deductible we can't meet (and it's totally undriveable, mold issues and a child with respiratory problems do NOT mix). No money for swim lessons, or to buy enough food for me to cook 4 weeks in advance for my shoulder surgery.

I'm more than a LITTLE furious that he just wiped us out. But for the past several years... it's worked great. And it will work great again AS LONG AS NO ONE DRAINS the flippin accounts.

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answers from Beaumont on

Yes, I do it faithfully and love it! It takes a while to get it "right"...almost 9 months for us but it has turned our life around!

1 mom found this helpful


answers from Los Angeles on

S., not always naked in public?

You need to explain more ;~))

I don't use envelopes. I just shop carefully.

Good luck to you and yours.

1 mom found this helpful


answers from Kansas City on

I LOVE the envelope system! We started it when we started Dave Ramsey and with the help of a real budget and the envelopes, we paid off $38000 in debt (nothing left but the mortgage now) in 11 months.

Of course this wasn't just b/c of the envelopes - going to one car helped a lot - but they are great for letting us know what we have on hand for each pay period and to really think about every purchase before we hand over the cash. Cash hurts!

And once an envelope is empty, we can't purchase anything in that category until the next time we fund it. Ok, sometimes I just switch it out from another category if we really need something but then that other envelope is empty until the next time i get money for it (which may or may not be the next payday).

We pay the envelopes first each pay day!

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answers from Washington DC on

My mom does this. She especially did it when planning/paying for my wedding. Each vendor had an envelope and she'd mark payments, due dates on the outside.

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answers from New York on

You moms have inspired me to do this!! I like Kerry and a couple others mentioned, have used the debit card system and we track on a spreadsheet how much we spend on what but we really don't force ourselves to only spend x amount on groceries, clothes, fun etc. I got what ou meant about groceries and clothes being non-essentials - meaning your mortgage and gas and electric are x amount - you get the bill, you have to pay it. You can spend more or less on clothes and food. You may have to coupon clip and not get any frills items in the grocery store like prepackaged snacks and so forth or shop at a thrift store for kids clothes. Good topic, my money is also so tight it squeaks...

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