I’m a really big fan of everything Dave Ramsey. Positive motivation, good values and smart ways to save money? Yes and yes, please. I’ve done his cash envelope budgeting system religiously in the past. And it’s one of the few ways I’ve actually been able to stick to a budget and save money.
But I’ve since switched to a cashless system. And it might be right for you too. That’s why I’ve created a free Cashless Budget Tracker that you can download and print for free.
What is the cash envelope system?
- When starting your budget for the week, 2 weeks, or month (depending on your pay schedule and how far out you like to budget), you first subtract all your bills and debt payments.
- Then you put the remaining money into expense categories such as groceries, gas, clothing, dining & entertainment, etc. And make an envelope for each one.
- You take cash out of the bank for each envelope and you can only spend that cash on those items and expenses.
Why the cash envelope method is great
- Tangible dollars are leaving your hand, which psychologically makes a bigger impact than swiping a card and spending invisible money. Therefore, you might spend less and smarter.
- It sets a hard and fast budget that you can’t fudge. You can only spend the cash in that envelope and when it’s gone, it’s gone.
- It segments your spending so you won’t go over in one area to the detriment of another.
Why the cash envelope system might not be for you
- You don’t live close to your bank or for whatever reason, it’s not convenient to regularly withdraw cash.
- Both you and your spouse spend money from the same account, and it’s not realistic to always shuffle the envelopes to whoever needs them at the time.
- Maybe you don’t like carrying a lot of cash.
Alternative to the cash envelope system
Some of those reasons are mine as well. That’s why I came up with a different way to keep the good aspects of the system while making it more realistic for my family.
I divide my money into expense categories on this Cashless Budget Tracker.
And my favorite part is the system to record expenses for each category and adjust the remaining budget for each expense.
And if there is any remaining money at the end of the pay period, that money goes into savings or rolls over into the next period’s entertainment fund.
Click here to download your free Cashless Budget Tracker. And I’d love to hear how it works for you! Feel free to leave a comment below.