Using the Envelope System

Over the past couple months, Josh and I have been using the envelope system in order to make sure we are sticking to our budget. The envelope system is when you take your budget and instead of using your debit or credit card to pay for everything, you withdraw cash and categorize it into envelopes according to your budget. For example, we take out cash for groceries/eating out, dates, Mackenzie fun, medical expenses, and babysitting. Once the money in the envelope is gone, we can’t spend any more money in that category. We first learned about the envelope system from Dave Ramsey in his Financial Peace University classes. Check him out!

I’m sharing this with you because it has worked for our family! It is so easy for me to use my debit card to constantly buy food. I love to eat good things, like Chickfila! By knowing that my cash is limited and I can see it going away, I choose to eat out less frequently. Also, I have given myself motivation to spend money less frequently. I don’t have a computer and I would LOVE to invest in a really nice one. All the cash that I didn’t spend goes to Kari’s computer fund. I know that instead of going out to eat, I can be that much closer to my new computer.

The envelope system has also helped me be more aware of coupons and good deals! Who would have thought using coupons and seeing how much you saved on your receipt could be that much fun?!

What are some methods you have used to save money?


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