Cash Envelope System

Fusspot

Does anyone use the envelope system for budgeting? I have started using my debit card for most things, even cups of coffee, and I find that I have lost track of where my money goes. I do look on my bank statement but its not the same as using cash.

I used to just draw out cash for the month after being paid and leave money in my account for direct debits and I would leave cash at home and take some out every day and that seemed to work for a while but then I started forgetting to take money out with me and ended up paying on my debit card anyway.

I've been reading online about the envelope system and putting cash into different envelopes for different things. However, does this mean taking all the envelopes out with you every day? Also what if you go to a shop and buy groceries, plus toiletries and other things that are in a different category, do you have to pay separately from each envelope?

Also how do you use the envelope system when you purchase certain items online, such a supermarket grocery orders and things on Ebay/Amazon etc?

Some things I do need cash for anyway, like going out for a meal with friends and family, we put into the kitty with cash to pay the bill but I never know how much cash I need to draw out for the month.

I feel that just swiping my debit card all the time is not feeling like I'm spending real money. Any views?

karenccs67

Yes I do, all bills and petrol are paid by DD or debit card but groceries and our buffer are in cash. It certainly makes you think when you only have a set amount in your wallet or purse. I follow the Dave Ramsey baby steps, currently on bs4. I draw cash out weekly.

Fusspot

karenccs67 wrote: »

Yes I do, all bills and petrol are paid by DD or debit card but groceries and our buffer are in cash. It certainly makes you think when you only have a set amount in your wallet or purse. I follow the Dave Ramsey baby steps, currently on bs4. I draw cash out weekly.

Thanks for your reply. I am confused about how to pay for several things in the same shop. Also I do my main grocery shopping online but also buy fresh groceries weekly in the shop so its hard to manage this via cash envelopes.

freyasmum

I don't use cash, in fact I very rarely have cash on me at all.

What we do is write down everything we spend (we use a spreadsheet on Google docs so we both have access), that way we can see exactly where our money's going/gone.

shirlgirl2004

I have tried it for the weekly food shop. As you say if I buy an extra non food item at the supermarket then I just add £x to the envelope. If it's Dave Ramsey you've been reading then he would say if you don't have the envelope with you then you don't spend from it.

On the other hand using apps like Yolt can categorise all your spending from your bank and let you know if you go over your entertainment budget for example. Different things work for different people.

Mistral001

I use cash for everything I can. I have not heard of the envelope system. A seems like a very complicated way of doing something simple.

I once used a simple leger system. It was in an old exercise book in which I wrote down what I spent. I noted only the totals. For instance if I did the weekly grocery shop, I wrte down the total. If there was a non-grocery item, I just deducted that from the total and put that in a separate column.

flea72

I have a monzo bank a/c and use their 'pots' system for budgeting. It has totally changed my spending habits and i can keep track of everything

karenccs67

flea72 wrote: »

I have a monzo bank a/c and use their 'pots' system for budgeting. It has totally changed my spending habits and i can keep track of everything

Is Monzo a budgeting app, an app linked to your bank account or is it a bank account?

maman

I think it's a matter of discipline whichever method you use.:(


There is a theory that if you use a card then you only spend the exact price of the coffee (or whatever) whereas with cash you might have a £5 note and be unsure where the change goes.


I think what's more important is to keep a check of exactly what you're spending and on what. So a spending diary, keeping all receipts and maintaining a running total of all expenditure. I've often found that just keeping the diary can act as a deterrent to spending in itself as I'm reluctant to have to account for something I only want rather than need. You can then review the diary to see where you might cut back.


There's an elderly lady that posts on here that has a cash purse for all food shopping (but that wouldn't work for an online shop). She's very frugal and saves as much as possible to treat her family on holiday. Trying to have something left in the budget and an aim of what to spend it on is a good incentive.


Thinking that a card isn't real money is a state of mind. Seeing the accounts written down and where it's gone should help to develop good mse habits. :money:

RG2015

karenccs67 wrote: »

Is Monzo a budgeting app, an app linked to your bank account or is it a bank account?

https://monzo.com/