What to Do with Extra Cash at the End of the MonthĪt the end of each month, you might have extra cash kicking around in your envelopes. There are many different cool ways you can set up your envelope system. With the hard part all figured out, now you can get your cool envelope system going! You can just use regular envelopes or you can buy a cash envelope wallet or neat-looking envelopes. Now that you have a better idea about what the cash envelope method is and why it's great, let's get down to the nitty-gritty of actually implementing this budget into real life. But then you won't have that money for gas or rent.ĭo you see now how an envelope system makes your budget more real and tangible? Instead of being an abstract idea, you calculate with numbers on a spreadsheet, your budget comes alive in your hands with the cash you actually spend. For example, if you want to spend money on some clothes, but you don’t have any money left to spend on your clothing budget, you'd have to steal from another envelope. The biggest perk to envelope budgeting is that it makes self-discipline when it comes to your spending habits a lot easier. Now you don't have to calculate how much you spent and subtract it from your income to know where you stand in your budget. With an envelope budget, you get rid of a lot of the work that comes with a traditional budget. One of the biggest things that makes budgeting hard is that you have to have complete accountability, monetary discipline, and keep track of your own spending. If you have trouble going over budget then you might benefit from a more straightforward and literal budget. Just carry around a cash envelope of the set amount you want to spend on eating out each month and you'll never be able to overspend on fast food again! Why the Cash Envelope System Works You can also use an app to digitally recreate the envelope budget system or you can use a cash envelope system just for the parts of your budget where you tend to overspend.įor example, maybe you just have a tough time each month spending too much on eating out, but all other aspects of your budget are easy to control. That way, you don't have to use paper envelopes. These cash envelope system wallets have card slots where you can insert tabs that tell you what slot is for which cash fund. You can also find notebooks and wallets that are designed for a cash envelope system. This way you can still benefit from the visual ease of the envelope system while still being able to use your debit cards. There are many ways you can create your own envelope system for budgeting, but the most common envelope budget is when you put cash in envelopes that are labeled for each section of your budget.īut you can also put fake cash into envelopes and take "money" out of your envelopes as you continue to use cards instead of taking out cash. Then you divide all your cash into envelopes that are marked for each budget category. With a cash envelope system, you stop using checks, credit cards, and debit cards and instead use cash for all your spending. So instead of creating charts and spreadsheets, you literally create your budget categories with a designated envelope for each budget category and then place the money allotted to each category into each envelope. A cash envelope system is when you use cash and envelopes to organize your budget.
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