{budget}fab*

review of cash envelope system

Posted on 26. Aug, 2009 by racine in penny pinchin'

Recently I wrote about the cash envelope system as a great way to budget your money.  I tried it for myself and here are my thoughts.

Using the cash envelope system makes me feel like I have total control over my money .  I am no longer a slave to swiping my debit card like I usually am.  Instead, I take out the appropriate amount of cash for the necessary areas of my life and spend accordingly. In fact, the only time I use my debit card is to make online payments. 

One critique I do have of the cash envelope system is figuring out what to do with all those envelopes!  Do I take them with me?  Do I stash them in a hidden drawer somewhere?  Do I only take the envelopes that I think I will need during the day?  I have to admit, it was a tad cumbersome going through my purse, trying to read the labels on my envelopes discretely and then paying cash for whatever I was purchasing.  I soon gave up and simply combined  all the cash into one large lump sum and spent it on the categories it was allotted for.  Once it’s gone, it’s gone. 

This is working well so far.  I am managing my cash well and not spending as frivolously as I normally would.  Every dollar is accounted for.  Has the cash envelope system worked for you? Let us know in the comments below!

Tags: budgeting money, cash envelope system, ways to save