Summer Saving: New Cash Envelope System

For my first post in this series I wanted to share my new cash envelope system. If you are on a budget, I highly recommend you adopt a cash envelope system. I was resistant to it for a long time for two reasons:

1. Our bank is out of town and it’s inconvenient to have to use the ATM every time we need cash.  Also, having to work it out so our cash is in multiples of 20s is kind of a pain.


2. I was certain I could demonstrate some amount of restraint with my debit card.

Which was untrue.

I believe we’ve already established that Mary and self-control generally don’t go in the same sentence (read my post about Walmart). Unless you’re saying Mary doesn’t have self-control.  Anyway, recently I have realized the errors of my ways and have fully embraced the cash envelope system.

This system will help you save money this summer for one main reason: if you don’t have the cash to pay for something, you can’t buy it. That simple.

I’ve mentioned before about attending Dave Ramsey’s Financial Peace University. During that class we learned about the importance of paying cash for everything you can. If you’d like to know more about this, click here.

I originally had a cash envelope system that was literally envelopes with cash in them. I was not a fan of this system because it felt disorganized just having a bunch of envelopes floating around.  Also, I’m a bit haphazard at times and I just knew at some point the envelopes would tear, or get lost, I’d lose track of things, and every thing would come crashing down. So yesterday I revamped my cash envelope system and I am already loving it!

mini-accordion file

I bought this mini-accordion file a couple of years ago for 98¢. I had my own business at the time and was using it to organize my business-related purchases.  Now I keep my driver’s license, check book, our A+ card, coupons, and gift cards in the front, and I labeled the each of tabs with a sharpie marker for each of the cash categories in our budget.

cash envelope system

These categories include:

giving– currently revamping, but as of right now, this is for spontaneous giving, as well as gift giving (birthdays, etc.).

grocery– self-explanatory.

gas– self-explanatory.

household– for items such as cleaning products, toilet paper, batteries, etc. Anything related to the household that is not edible.

pets– for food, occasional treats and toys.

entertainment– for family activities such as eating out, going to the zoo, etc.

miscellaneous– for those times when you just have to buy something that wasn’t in the budget.  AKA our cash version of the emergency fund. It’s only $20.


The last three are for purchases that we as individuals may need or want. For example, Josiah (our son) may need new socks.  Or I may just want to buy him books or a toy. These categories are our own spending money to use as we like.

In the past, when I’ve budgeted for these cash categories, I’ve used the debit card to pay for them.  Unfortunately, it is wayyyyy too easy to go over budget with a debit card.  “I know the money is there… I’m $2.50 over budget.  I’ll make up for it somewhere else.  No big deal.”

Dave Ramsey says, “While debit cards can’t get you directly into debt, if used carelessly, they can cause you to over-spend. There’s something psychological about spending cash that hurts more than swiping a piece of plastic. If spending cash whenever possible can become a habit, you’ll be less likely to over-spend or buy on impulse.”  Source:

If you’re not already using a cash envelope system, this may be your first step to saving this summer!!

6 thoughts on “Summer Saving: New Cash Envelope System

  1. You are so smart using an organizer! I use the envelopes too and it drives me nuts! So we went back to debit and always over spend- but I think Target has them in the $1 spot- so gonna get one and utilize it!

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