How To Use Money Envelopes in 2023 [Free Printable Included]


Money envelopes can actually change the best way you work together together with your cash and funds. It’s no shock that the money envelope system has modified my husband and I’s funds in so some ways. It truly is a game-changing expertise!

However how on earth does it work? Can money envelopes actually aid you with impulse spending and your funds? And the way do you purchase one thing on-line if you’re utilizing money?!

I’ve had these very same questions (plus some!). That’s why I’ve created this whole information on how the money envelope system works. Plus you’ll get free printable envelopes so you may get began in the present day.

What Is The Money Envelope System?

The money envelope system is a manner so that you can take again management and monitor how a lot cash you’re spending on sure classes in your funds. As a substitute of utilizing a debit card or bank card, you’ll use money for areas in your funds the place you are likely to overspend.

For those who wrestle with grabbing takeout or quick meals too usually, then you’ll be able to have a money envelope particularly for eating places. Use the cash you’ve put aside for eating places any time you exit to eat. 

When you’ve used up your budgeted quantity, you received’t have any money left in your envelope! This helps maintain you on funds and never overspend every month.

Free Money Envelopes

To get your FREE money envelopes despatched straight to your inbox, join my Money Envelope Information. Then, merely print your freebies at residence on card inventory and begin utilizing them in the present day!

Not solely will you obtain printable money envelopes, however you’ll get entry to my Free Useful resource Library the place you’ll discover different budgeting and finance printables.

How Money Envelopes Work: 4 Easy Steps

As a result of I’m a Sort-An individual and completely love step-by-steps, I’m breaking this down for you in simple to comply with steps!

1. Know which classes you need in money.

I like to recommend going again by means of your spending and determining the place you are likely to overspend. Additionally, resolve in the event you’d like to make use of money envelopes for saving cash for future bills (learn extra about saving cash with sinking funds).

2. Go to the financial institution and pull out cash.

Restaurants and groceries envelopes

When you’ve made your funds, resolve which denominations (a whole lot, twenties, tens, fives, ones) you need in your envelopes. Make a tally sheet so you know the way a lot of every invoice you wish to take out.

3. Set up your cash into money envelopes.

After you’ve pulled money out from the financial institution, place your payments into your envelopes. As an illustration, in the event you plan to spend $600 this month on groceries, then plan on pulling out 6 100 greenback payments and place them in your envelope labeled “groceries.”

4. Use your money envelopes if you want them.

Take the envelopes with you if you want them. As soon as the cash is gone, it’s GONE. This forces you to watch out together with your spending and can aid you to remain inside your funds.

four cash envelopes

How Usually You Ought to Withdraw Money

How usually you might be paid will aid you decide how usually you need to withdraw cash on your money envelopes.  As an illustration, if you’re paid as soon as a month, then you definitely’ll wish to withdraw your money envelopes month-to-month.

In case you are paid biweekly, you may need to take money out of the financial institution each different week. 

The extra your cash and your funds, the simpler it will likely be to find out when to get your money out. For those who’re budgeting per paycheck, then it’s most likely finest to drag out money each paycheck. 

Our household is paid two occasions every month, however we pull all our money out firstly of the month. Because of the financial savings that we’ve got robotically taken out of our account, it’s simpler for us to withdraw all our cash directly.

money for cash envelopes

The best technique to decide that is to know find out how to write a funds. I personally use a funds calendar to assist me know which paycheck will cowl which bills. You possibly can study extra about writing a funds right here.

Why Money Envelopes Assist Individuals Spend Much less

Money envelopes should not new. They’ve been utilized by folks for years, and there’s a cause why increasingly more individuals are utilizing money envelopes every day. 

Analysis exhibits that folks overspend by $7,400 every year. Clearly, folks are likely to spend with out considering (I do know I do!). It’s a lot simpler to spend cash if you’re utilizing a debit card or bank card. 

Handing over money is more durable. Individuals have an emotional connection to bodily cash. It’s harder to half with a $20 invoice than it’s to spend $20 on a debit card.

The primary cause why money envelopes work is that they aid you keep on monitor together with your funds. Money envelopes prepare you to take again management of your funds and cease spending if you run out of cash.

clothing cash envelope free printable

It’s fairly easy. When you’ve got $50 to spend on garments, and you find yourself on the register with $57 price of clothes, one thing needs to be put again. Utilizing money helps you develop higher boundaries together with your cash.

For those who keep dedicated to solely utilizing the cash that you simply budgeted for every money envelope, then you’ll, certainly, keep on monitor every month financially. 

Have A Funds In Place

For money envelopes to work successfully, it’s vital that you’ve got a funds in place. It is best to solely be pulling cash out of the financial institution on your envelopes AFTER you’ve written your funds!

Need assistance on find out how to write a funds? Don’t fear! I’ve bought you coated. Head on over to The Best Manner To Write A Funds to discover ways to write a funds that truly is sensible!

budget calendar and bill payment log

Frequent Money Envelope Classes

I don’t suggest pulling money out to pay your lease or electrical energy invoice. These are each bills the place you aren’t prone to overspend every month.

As a substitute, pull money out for areas in your funds the place you are likely to spend an excessive amount of cash. 

Undecided the place you might be spending an excessive amount of cash? That’s okay! I like to recommend printing off your financial institution statements from final month. Undergo every transaction and categorize it. 

Spotlight all of the transactions the place you went out to eat in a single shade. Then use a unique shade highlighter for all of the occasions you ran to the grocery retailer.

When you’ve categorized your transactions, add up how a lot you’re spending in every space. For those who’re spending greater than you had budgeted, then chances are high you want a money envelope for that class!

Under are widespread money envelope classes:

  • Meals: Groceries
  • Meals: Eating places
  • Haircuts
  • Enjoyable Cash
  • Leisure
  • Clothes
  • Automotive Upkeep (sinking fund)
  • House Repairs (sinking fund)
  • Christmas (sinking fund)

In the end, discover what works for you in the case of utilizing money envelopes. 

And my largest tip: don’t begin off with 8 completely different envelopes. You’ll get overwhelmed straight away. As a substitute, select 1 or 2 classes in your funds the place you know you are likely to overspend. Attempt utilizing money envelopes for just a few months in these classes.

Cash Envelope Examples

What To Do When You Pay Payments On-line

“However I pay my payments on-line. Do I must take money out for these payments?”

The brief reply: No.

The lengthy reply: Completely not!

You shouldn’t take out money for payments. The aim of the money envelope system is that will help you develop higher habits and cease overspending. I’m guessing you aren’t paying additional on your web invoice every month.

Proceed paying your payments like regular. Take money out for areas in your funds which are variable bills reminiscent of meals, gasoline, or spending cash.

What To Do When You Purchase One thing On-line

Simply since you store on-line doesn’t imply you’ll be able to’t use the money envelope system! While you purchase one thing on-line, merely make a visit to the financial institution and deposit the cash you spent out of your money envelopes.

Every so often I order my groceries on-line as an alternative of going to the shop myself. They cost my debit card and I instantly run by the financial institution to deposit my money into my account after I seize my groceries.

Though this does take an additional 5 minutes, I nonetheless use money envelopes as a result of they’ve helped me keep on with my funds! I’d a lot fairly spend just a few additional minutes working by the financial institution than really feel like I’ve no management over my cash.

What To Do With Your Cash

Some of the widespread questions folks ask in regards to the money envelope system is what they need to do with the change they obtain. I personally don’t like placing cash in my money envelopes. The additional weight causes my envelopes to turn into heavy and it looks like cash are at all times spilling out into the underside of my purse.

wallet with cash and coins

As a substitute, I’ve discovered that 3 choices for coping with change and money envelopes:

  • Choice 1: Maintain the additional change in your pockets. Likelihood is you have got a zippered part in your pockets particularly made for cash. Merely put your change in your pockets and subsequent time you pay with money, attempt to make precise change.  As an illustration, if the full is $20.07, then seek for 7 cents in your pockets. This manner you’re utilizing your cash as you want them.
  • Choice 2: Acquire your change in a jar at residence. I really like amassing additional change in a jar we maintain in our home. As soon as the jar is full, I deliver it by my financial institution and deposit all of the cash into our trip financial savings account. It is a wonderful means to economize for one thing particular!
  • Choice 3: My husband personally retains additional change and cash in his automobile. He has a particular spot in his console the place he stashes this cash. If he’s driving and desires to purchase himself a coke, he stops and makes use of his additional cash to purchase his caffeine.

How To Deal with Leftover Cash

When you’ve got extra cash leftover on the finish of the month, then let me be the primary one to congratulate you!

Congrats GIF

Give your self a pat on the again and do a celebration dance. Clearly, you’re doing one thing proper!

However what must you do with that additional money?

Fortunately, you have got just a few choices on find out how to deal with leftover cash.

  • Choice 1: Go away the additional cash in your envelope. When you’ve got any extra cash in your restaurant envelope, one choice is to go away it in your envelope and have ever extra cash to spend the following month. 
  • Choice 2: Go away the additional cash in your envelope, however funds much less the following month. Let’s say you have got $50 left in your restaurant envelope. For those who usually funds $200 every month for consuming out, this month you solely should funds $150 as a result of you have already got $50 in your money envelope. 
  • Choice 3: Ship the additional cash to financial savings. For those who’re making an attempt to save lots of up for an enormous buy or trip, then think about sending any leftover cash out of your money envelopes to that financial savings account. It is a nice technique to keep motivated to spend even lower than you’ll have deliberate!
  • Choice 4: Ship the additional cash to debt. For those who’re in your debt free journey, then think about taking any leftover money and making an additional debt fee! It will aid you make extra progress in your debt journey.

What To Do If You Run Out Of Cash

However what in the event you run out of cash earlier than payday? 

I want I might say this has by no means occurred to me, however that might be a lie. There have been a number of occasions when our money envelope was empty earlier than the following payday. And THIS is when money envelopes train you a lesson. For those who run out of cash, it’s easy. You CAN’T spend any cash.

In contrast to utilizing a bank card, you actually can’t purchase something in case your money envelope is empty. That is your funds’s manner of telling you that you simply’re lower off. 

When you’ve got $100 in your Grocery envelope, you actually can’t spend greater than $100. In case your grocery invoice is over $100 then you definitely’ll be compelled to place one thing again.

Utilizing money envelopes helps maintain you accountable to the funds you set.  So long as you keep on with utilizing your money envelopes, you WILL keep on funds. 

For those who proceed to expire of cash month after month, then it could be time to check out your funds. Decide in the event you’re actually budgeting sufficient for that class in your funds. It is a signal it could be time to extend your funds!

groceries cash envelope

Making Money Envelopes Work With A Partner

When you’ve got a partner or accomplice, you could be frightened that the money envelope system received’t work for your loved ones. This isn’t true!

My husband and I’ve been utilizing money envelopes because the first yr we have been married, they usually have helped us take again management of our cash. Under are just a few tricks to make money envelopes work for 2 or extra folks:

1. All the time have a plan in place.

So usually, folks say that their partner forgot to seize the envelope earlier than work after which ran by the shop on the best way residence that afternoon. What are they purported to do? One of many best advantages of money envelopes is that they pressure you to be ready and suppose upfront.

Earlier than you ever depart your home, suppose by means of your day. Will you must run any errands throughout your lunch break? Did you intend on choosing up dinner on the best way residence from work? In that case, remember to seize the envelopes that you’ll want!

2. Permit every individual to have their very own envelope.

As a substitute of sharing one “Enjoyable Cash” or “Miscellaneous” envelope, permit every partner to have their very own envelope. My husband and I each have our personal “allowance.” We take $50 out in money every month. Each of us are allowed to spend this cash on no matter we wish. We every maintain our envelope with us always. 

That is good for my husband who has an extended commute. If he desires to cease and decide one thing up on the best way residence, he can! He has his personal money envelope with cash inside. When he runs out, he’s out! He must wait till the following time we refill the envelopes to spend cash on one thing he desires only for enjoyable.

cash envelopes for couples

3. Test-in every week.

For those who’re sharing money envelopes with a partner, then set a time every week to examine in with one another in your funds and money envelopes. I prefer to name this a Household Enterprise Assembly. My husband and I sit down each Sunday night to debate our funds, just a few targets for the week, in addition to our meal plan. That is the good time to go over how we’re doing with our spending and depend how a lot cash is left in our money envelopes. 

The important thing to utilizing money envelopes efficiently with a partner comes all the way down to communication. The extra you talk about spending, the higher off you’ll be!

The place To Maintain Your Money Envelopes

After I first began utilizing money envelopes, the thought of carrying my money round terrified me! I used to stroll round with ALL my money envelopes tucked into my purse. After I walked out my door, I instantly felt like everybody knew I had a whole lot of {dollars} with me.

Carrying round my money envelopes abruptly was a HUGE mistake that I made! Fortunately, nobody ever stole my cash, however I’ve realized that money envelopes are supposed to be left at residence.

Don’t (I repeat) DO NOT maintain all of your money envelopes with you always! It’s not smart to hold such a lot of cash with you in all places you go. 

As a substitute, retailer your money envelopes at residence in a really protected spot. You possibly can disguise your envelopes someplace in your house or maintain them locked up in a protected. 

Merely seize the envelopes you want earlier than you permit the home. Simply keep in mind to place them again if you get residence!

Can I “Steal” From Different Money Envelopes

Plenty of readers will ask me if it’s okay to “steal” from different envelopes. Normally, they wish to exit to eat, however they don’t have any cash left of their restaurant envelope. As a substitute, they are going to take cash out of their grocery envelope and head to a restaurant.

Though you’re technically not “stealing” cash, you take cash from one class to pay for an additional class in your funds. I personally attempt to restrict how usually this occurs. Every so often I’ll take cash from one class for an additional, but it surely’s very uncommon.

For those who’re “stealing” cash usually out of your money envelopes, then chances are high you must return and check out your funds. It could be time to extend the quantity you’re sending to that class in your funds. Make sure that you have got an inexpensive quantity set for every class in your funds. The extra affordable your funds, the extra possible you might be to stay to it!

Restaurants Cash Envelope

Ideas On Getting Began

Able to get began with money envelopes? Under you’ll discover my favourite tips about find out how to begin the money envelope system and see outcomes!

Tip #1: Give your self an allowance.

Allowances aren’t only for children! Giving your self (or different members in your loved ones) an allowance means that you can have private spending cash that nobody else can contact.

It should train you find out how to be affected person with cash, save up for objects you need, and suppose earlier than spending. 

Tip #2: Maintain monitor of what you’re spending.

While you’re first beginning out with money envelopes, it’s useful to maintain monitor of precisely what you’re spending your money on. You are able to do this by writing down your transactions on the again of your envelope.

For those who’d fairly not write in your envelope, think about itemizing out your transactions on a plain notecard. Slip the notecard inside your envelope for safekeeping.

Tip #3: Lower your expenses on ink by shopping for coloured card inventory on your envelopes.

I really like printing my money envelopes on coloured card inventory. Not solely do I get monetary savings on ink for my pc, however my envelopes are stronger when they’re printed on card inventory. Use packing tape to safe them and also you’re all set!

cardstock, scissors, tape, and envelope

Tip #4: Begin with simply 2 money envelopes.

The concept of utilizing money envelopes might be anxious. To maintain it simple, begin by selecting 2 money envelope classes. Use these money envelopes for just a few months. If you find yourself liking the money envelope system, slowly add to your money envelope classes!

Tip #5: Discover a good friend or accountability accomplice to make use of money envelopes with.

Every part appears to be simpler (and extra enjoyable!) with a good friend. For those who’re simply beginning on this journey, ask a good friend to hitch you. Supply encouragement to 1 one other and think about checking in on one another together with your spending.

You don’t should share your complete funds with this individual. However generally having just a little additional accountability will aid you achieve success!

Tip #6: Don’t surrender (strive money envelopes for at the least 3 months).

Have you ever ever heard that 21 days kind a behavior? I actually suppose it’s longer! Decide to making an attempt money envelopes for 3 months. This will provide you with time to discover ways to use them effectively, and monitor your spending. You’ll be capable of see in the event you’ve spent much less and in case your cash habits have improved!

My Private Expertise With Money Envelopes

Money envelopes helped train me find out how to not purchase all of the issues and develop this pretty behavior I prefer to name “persistence.” Let’s again up first although. To grasp the total story, you’ll should know that my husband and I paid off over $111,000 of debt on 2 instructor salaries (you’ll be able to learn extra about that HERE and HERE).

debt free thermometer

However to say that I jumped on the money envelope system straight away could be a flat out LIE.

In late 2011 our household hit all-time low. We have been younger, married, newly pregnant, and had no earthly thought what we have been doing. However we knew one factor for positive…we have been spending manner an excessive amount of cash every month.

As in, we didn’t come up with the money for left over to cowl daycare prices when our bundle of pleasure arrived. To assist retrain how we spent cash, we realized find out how to write a funds and use the money envelope system.

Quick ahead 8+ years and this little system of ours has little question saved us THOUSANDS over time. Now we have completely modified the best way that we spend and get monetary savings.

However I do know what you’re considering proper now. You’re considering “However Allison, I’m completely different. I don’t suppose that would work for me.” And to that I’d say “Yeah, it is completely different. However don’t knock it till you strive it.” And that’s what I need you to do. Simply strive it. You by no means know the way it can change your life!

Want extra assist?

For those who’re uninterested in dwelling paycheck to paycheck cycle and wish to discover ways to funds so you may get out of debt for good, I’ve bought a free useful resource only for you. You possibly can seize the Budgeting and Debt Payoff Cheat Sheet to get easy and actionable tricks to take management of your cash in the present day.


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