Why Cash Envelopes Are My Secret to Staying on Budget


My envelopes are well worn and probably ready for replacement. They embarrass the living heck out of my husband when I pull them out at the store or restaurant. But these right here, these are my biggest secret. They are the number one thing I tell clients that will lead them to success on their debt free journey.  

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It doesn’t matter if it’s clips or envelopes, cash hurts to spend. You think twice and you spend differently.  You make it impossible to “blow” your budget. If there’s not enough money in the envelope, the item can’t be purchased.  You have to get good at planning with this system, but I guarantee it will help you decrease your spending.  I’ve been at the grocery store and have had to ask the cashier to put some things back a time or two. Eventually I became pretty impressive at totaling as I went.  And if you really want to be a nerd, you can buy a hand tally counter for around $10 or less. 

Setting up your cash envelopes

Common categories for cash envelopes are groceries, travel, dining out, kids needs, blow money (aka “allowance”), clothes, toiletries and entertainment.  Everyone’s going to have different envelopes depending on what you shop for and spend in person the most and label them differently depending on how you budget.  I combine toiletries and groceries to one category.  A lot of people don’t.   As long as you’re not severely overfunding an envelope, rolling what you don’t spend from one month to the next can be a fun motivator for things like clothes to save up for a fun spending day. 

When we spend with a credit card or even debit card, it doesn’t activate our pain points the same as cash.  We get that card back and don’t physically have to let go of anything, so it doesn’t register the same.  Research has shown that people are willing to spend up to 83% more for an item when they pay with a credit card.  On average, they actually spend approximately 12-18% more when paying with a card. 

Just say no to plastic

Credit card use is on the rise every year.  Think about it. When’s the last time you even saw a vending machine that didn’t accept credit cards?  Businesses make it so convenient and easy to do a magical swipe of the card, why wouldn’t you “add fries to that”?  It wasn’t so long ago that credit cards weren’t even commonly accepted at fast food chains for fear of slowing down the service.  McDonalds was one of the first to change that in 2003, and by doing so, their average ticket increased over 50% when consumers pay with a card. 

Have I got you thinking about converting to the cash envelope system?  I love the simplicity of my banking envelopes, but anyone who knows me will tell you I’m not the most stylish person you’ll meet.  Check out these fabulous hand-made cash envelope wallets! Happy shopping!


What Do Fitness and Finances Have in Common?


Most women, and some men, have at some point in their life counted calories, points on weight watchers or counted macros.  What the heck does this have to do with money?  They’re the exact same thing as a budget.  Seriously.  Think about it.   

With calorie counting, you have to budget your food.  You get a certain number of calories (higher if you workout) and you have to make it last all day.  You don’t have to eat only healthy, but the healthier you eat, the more “bang for your buck” you get.  When you eat nutritiously dense, you’re satisfied longer and on less. 

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With a budget, or spending plan as I like to call it, you get a certain amount of money (more if you work harder or extra jobs) and you have to make it last all month.  You don’t have to be super frugal and not go out for coffee.  But the more lattes you make at home, the more money you have for clothes.  Or bills.  Or retirement.  If you make wise, pre-calculated choices, your money will go further.  Impulse spending only leaves you with the same feeling of regret as impulse eating a whole bag of Oreos.  Been there and done both. 

What about the quick fix??  The latest fad diet.  Have you heard of the raw food diet?  5 bite diet?  Cabbage soup diet?  Master cleanse diet?  Grapefruit diet? The list goes on, but there are TONS of fad diets out there.  They’re pretty extreme and sure, they’ll get you results quick.  But will they last? NO.  And neither will you on the diet.  The best way to lose weight is through healthy exercise and a balanced diet of food in moderation with reasonable portions and control.  It’s about changing your behavior for long term success. Money is the same thing.  You can do all the balance transfers you want.  But at the end of the day the debt is still there.  You can wipe out your retirement to clear your debt.  But if you don’t change your behavior, it won’t last.  You’ll be back in debt in no time.  Got those t-shirts also. 

So money and fitness, health and wealth.  They go together like peanut butter and jelly. It’s no big secret that once you get one area of your life in check, the other seems to magically fall into place for a lot of people.  It’s about learning balance, patience and how to focus on a goal.  Remember, a season of discipline doesn’t mean you’ll never enjoy your favorite things again.  As Dave Ramsey says, “Live like no one else, so that later you can live and give like no one else.”