Cash Envelope System
Over draft fees of $35.00 may not seem like a lot of money but let's compare that to what we can buy with $35.00. For us that would be 7 lbs of ground beef, 3/4 tank of gas or a family date night.
When Kevin and I first lost our jobs within a month of each other in March of 2020 we start incurring overdraft fees monthly because we had all of our bills automatically debited from our account, but were obviously making less money. That is when we started unsubscribing, cutting costs, and using cash.
Since then we figured out that paying cash for bills and anything we could was the best way to keep our spending on track and hold us accountable.
Spending cash was new to us and we had no idea how to organize ourselves. So I got online and started looking up cash systems and the Cash Envelope System kept coming up. Dave Ramsey has his famous system but I was overwhelmed already and reading the in depth system made me feel even worse. I needed the easiest step by step system available. After a few hours on Pintrest I said okay, I have regular envelopes and I am going to get organized... TODAY!
So what is the cash envelope system?
Easily put, its an organized envelope system with allotted amounts of money placed in categories to help you stay on track with your spending.
When I first started, I made a monthly budget of ALL bills and costs which included food, fun spending, gas.... everything!
Then I grabbed envelopes and started titling them. (There are a ton of super cool envelopes and binders available out there but early on I did not want to spend a lot of money on cool organization.) Click here for our affiliate link to 2 budget wallets and binders I ended up buying later on. I love the wallet!
When we first started I kept major bills on auto debit and budgeted cash for everything else. So our system was uniquely for us. It was a half debit and half cash system. It's good to identify the areas that you easily overspend on and lead with those categories for cash envelopes. For us that was Food/Groceries, Household items, Gas, & Fun. I keep the Food/Groceries, Household, and Gas envelopes with me in my wallet so that I have them when needed. The fun envelope is kept at home because we plan fun ahead of time.
Everyone's budget will be different. I add a weekly deposit of a budgeted amount into each envelope but when I plan shopping trips I purposely try to stay as far below that budget as I can so that I accumulate a small fund and there is always money in our envelopes.
One envelope I've added recently is the "build your pantry fund". I add $10.00 a month to it. The purpose of this envelope is to spend $10.00 a month on sale items specifically for our pantry. I usually end up stocking up on pastas, canned goods, jams, peanut butter, and nuts when I find them on sale. If I don't buy anything this month with it I roll it over to the next month. I'm always scanning the stores for a good sale while shopping and I only buy items I know our family will be needing and using. With this fund I've also stocked up on things like toilet paper, waters and cleaning supplies that I keep in our pantry as well.
Check out our website for very and effective plastic cash envelopes. We include 1 budget sheet in each envelope!