The Envelope System Saves by She Makes Cents

You might notice the financial tips and posts lately. That’s because It’s a personal goal of mine this year to kick my financial situation up a notch. I spend way too much on food and….clothes. So I want to stick to a budget consistently and see how much of a difference it makes. Hopefully this article helps you, like it helped me 🙂


Get on a Simple System by She Makes Cents

Full article can be read on:

The key component to Dave Ramsey’s, “Total Money Makeover” is the envelope system. What is the envelope system, you ask? Well, according to Ramsey, its “way to handle money still works. People used to always use cash envelopes to control their monthly spending, but very few do in today’s card swiping culture”. I will say that it works and the comments to post prove it. Check out Ramsey’s simple basics for starting a cash envelope system.

  1. Budget each paycheck. Budget is a dirty word to most people, but you must budget down to the last dime if you’re going to successfully implement the envelope system. While I know plenty of people who budget a certain percentage of each check, I budget specific figures.
  2. Divide and conquer. Of course, there will be budget items that you cannot include in your envelope system, like bills paid by check or automatic withdraw. However, you can create categories like food, gas, clothing, and entertainment. I usually work off three main categories: groceries, restaurants/entertainment, personal maintenance (hair, nails, or anything that will help me feel “pretty”). I chose these categories for myself because these are the areas I could be tempted to overspend. I pay my bills off the top and then I budget each paycheck into these categories, which were listed in order of importance.

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3 thoughts on “The Envelope System Saves by She Makes Cents

  1. As a Financial Wellness Advocate, I appreciate this article. The envelope method is nice for a number reasons; first and foremost because it works. I’ve read studies that show that the actual handling of cash can act as a deterrent to spending because swiping a card doesn’t “feel” like spending. That’s one benefit of the envelope method: handling cash. Another benefit is that you set hard limits for yourself in regards to spending. Even if you don’t divvy up your cash for everything in your budget, just using the envelope method for “problem spending” categories can help to curb unnecessary expenditure and help ultimately keep your budget under control. If envelopes don’t do the trick for you, you could manage a technological version of the method by creating sub-accounts at your banking institution and populating them with funds the same way you would a physical envelope. Any move that you make to up your awareness in regards to spending is more than likely a positive one.

    • Thanks for the comment! I’m realizing taking it back to an older method is much better then swiping a card, it holds you more liable and makes you realize just how much you are really spending. I could do more of a modern approach and create sub-accounts but I feel like our society is so technology driven it’s fun to use paper again ;)!

      • There’s definitely nothing wrong with old school. When I’m counseling folks, I usually prescribe an old school method, myself– a paper budget and collecting and tracking receipts in a ledger. You can download my Financial Wellness Suite here: I always say that the best system is the system that works best, so if old school is your flavor, and it works for you, count me as a supporter. 😉

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