Cash Envelope System, Love it or Hate it?






Therefore, 2012 has brought about some challenges for my family and me, both my husband and I are in school full time and both have full time jobs. Our time we spend together is minimal and the time we get to spend together as a family is even less than that….sad to say L


I needed a way to budget our money so that they kids understood once it was gone it was gone and that if they wanted extra cash or computer time that they would have to start pitching in and helping around the house. That mommy and daddy could no longer do it alone.


I searched the internet high and wide to find something that worked, we already had a “budget” that we set up with Quicken about 9 years ago and has worked well so far. However, I will have to come clean if I see we have money in the bank I want to spend it. I can remember when I was little everyone always saying you can’t take it with you, well no you can’t but you do have to be able to take it to the store or to pay bills. When we got our taxes back this year we paid off some small debt that had been lingering for far too long and purchased airline tickets to see family out in California in May. Once again, we were back to just above paycheck to paycheck. If you ask my husband another fault I have is that I am a BIG time giver, I love to give to people, family, friends, our kids, my co-workers I love that look on people’s faces when they get something and it makes me feel good. Even though this may, sound like a great problem to have it is not budget friendly. An example would have been Christmas time at work, since I work in a school there were only 12 working days in December so it only seemed logical to do a countdown of the 12 working days of December my boss gave to me and then I would hand them each a small token of my appreciation for all their hard work all year long. All the items came from the dollar store and I have 10 employees I wound up spending $120 in the dollar store in less than a month…..who does that? I would have come out better getting them each a $10 gift card to a restaurant but when I was spending a little here and a little there it snuck up on me big time.


So to help me I want to start fresh in April on the cash system…..My categories are clothing, groceries, entertainment, allowance (I will go into why on this one), dining out

As I went through my data on Quicken, I realized we spend a lot of money between eating out and buying groceries. So I decided to set a budget of $550 groceries and $100 dining out which is $300 less than our average monthly spending.

Clothing is set at $75 a month that will roll over every month, some months we might not spend anything and some months like before school, winter, summer the spending will be more. This may not seem like much for three kids, two of which will be in middle school and one in high school. They do not expect the best and love to shop goodwill!

Entertainment is set at $100 a month, which is about $50 more than normal, but it is our goal as parents to spend what time we have left with our kids doing things they will enjoy, making memories. Therefore, this includes buying board games, going to the movies going bowling, chuck e cheese half would come out of dining out and half out of entertainment. You get the picture!

Dining out is $100 that is it, I am in a push for us to stop eating, sodium laced, overly processed food, that are high in empty calories and offer no nutritional value. Therefore, as you can tell with a family of five it will not take long to blow through this. We love going out for self-serve frozen yogurt, pizza, and the ever-popular McDonald’s

Allowance, why is this a cash category you may ask? Well as I said before I want my children to understand the concept of money. You work you are paid, you do not work you get nothing, your sibling does the job you were supposed to do, then they are paid not you. I have set aside $150 ($50 each) for the kids I am getting it back in all ones and I am sure the people at the bank are going to think we are headed to the club but I want to have a big wad of cash for them to see and each task can be paid for on the spot. Then they are responsible for extras they want phone case, nail polish, toys, video games, anything beyond normal that they want from school like on Chick-fil-a biscuit day, or snacks from the vending machine. In addition, there is the mandatory $5.00 they give back to us to put in savings.


So I would love your thoughts and suggestions if you are using this system, what works for you and what doesn’t???





2 responses »

  1. I completely love this system. The first time I saw it used was when I was snooping (don’t tell) in a lady’s purse at church. Well, it was just open, I didn’t actually put my hands in it. Any way, this woman was known for running a strict budget. Once, when her husband got a speeding ticket, they covered it by cancelling the news paper for a couple of months. But, these people also paid off their mortgage in about 15 years. Any way, her budget envelopes were laying there, so organized and pretty. The top envelope said “girls panties, Sears, $1.63. I knew for a fact that there was a dollar sixty three in it. Even as a child I appreciated the discipline of that!

    We do a modified version of it, not that exact. But, I do write on my envelopes where the money is going, and how much. I rarely deviate from it. It isn’t hard, it isn’t bothersome, and the best bonus is when I am asked if we can buy something, I can say check the envelope, and see if we can afford it. No more arguments! Children, and husbands, well anyone, can have a hard time understanding why we can’t afford a $10 thing when there is hundreds of dollars in the checking account. Well… there is the mortgage, the utilities, groceries, and on and on. With the envelopes, I don’t have to justify my decision!

    In addition to the types of envelopes you have, we like to keep one just for hospitality. This can include taking friends out, or giving homeless people some cash. We do not keep track of how this is spent. This is a gift back to God. btw, do I care if a street beggar spends it on anything but food? No, I do not. I am giving the money to honor God.

    • Thank you so much!! You are right I do need a hospitality envelope, most of my “gift giving” is done to people in different so I always found it easier to use a “virutal” envelope if you will. I keep track of how many birthdays I have in a month and then it goes from there, friends get $10 or less and family (according to which ones) get $25 and up to $40. Except for my mother and my mother in law I do tend to splurge alittle on them! We rarely ever take our friends out and have been saying we needed to take out our daughter’s boyfriends parents. They have been so wonderful about taking her to church and other functions.

      I am so glad to hear it is working for you and I hope I am able to report the same in a few months. I know I probably shot a little high on how much I would be spending so I might get to drop it back if after 3 months I see I am using no where near that much for certain things. Then that money can just go into savings or can pay off somemore of our debt. I would love to be completely debt free (except for my house) in 4 years and then I can start knocking that off my list as well!!

      Thank you so much for your suggestions and I look forward to hearing from you again

      Heather 🙂

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