How We: Cash Envelope System

If you are finding this post, most likely you have heard of Dave Ramsey's cash envelope system. If you haven't, go check it out here. Basically you are committing to spending the majority of your finances in cash in order to prevent overspending. Today I am going to show you how we use the cash envelope system and how it works for us!

First: Figure out which categories you are going to convert to cash. Some categories like Gas and Mortgage are obviously hard to pay in cash, so those are examples of ones we pay with our debit cards. The cash envelope categories we decided on were:

-Groceries

-Formula

-Tithe

-Kids

-Date Nights

-Family Outings

-Dog food

Second: Figure out your budget. Go through and determine what your budget is for each of your cash envelope categories. Make sure you stick to the budget you set! For example, if you decide you want to spend $400 each month on groceries, every week you will take out $100 and put it in your grocery envelope. Then once it is gone, it's gone. You don't use your debit card at all for groceries. If you have any left over, you can either move that into a savings envelope or you can keep it in case you need the extra for next week. I always like to move it to a savings envelope because it's nice to have some cash in an extra envelope if we ever need it!

Third: Create/Buy your envelopes. So there are a TON of great options when it comes to cash envelope organizers! Here are a few examples;



Now, you don't need anything fancy to start budgeting this way! You can use paperclips, regular envelopes, or anything that can keep each category separate! I didn't want to spend the money so I just created my own