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7 Budget-Saving Cash Envelope Hacks

Whether you're new to cash envelopes or a cash envelope veteran, these 7 hacks are genius!

Guest post from Lauren of Determined Dollar:

Whether you’re just learning how to budget or you’re a seasoned pro, incorporating cash envelopes into your budgeting system will undoubtedly save you money.

It’s often easier to overspend with a credit card, while cash helps us to be more conscientious about our purchases… but let’s face it, cards sure are convenient!

However, if you’re willing to give it a try, a cash envelope system will help you save money and stick to your budget every single time. Here are seven tips to help you make the switch.

1. Start with just three categories.

There’s no rule that says you have to commit to all cash, all the time.

Instead, try easing into a cash envelope system by picking three categories. My top recommendations are groceries, restaurants, and entertainment.

You’ll immediately notice how you feel differently about spending cash versus swiping a card and how easy it is to keep track of your budget.

2. Budget your cash categories in $20 increments.

It’s one thing to make a quick trip to the ATM, but it’s a dreaded chore to have to stand in line at the bank during business hours.

If you budget your cash categories in $20 increments, you can simply grab your cash at the ATM and fill your envelopes in no time.

3. Schedule your ATM runs.

As with any system, you have to follow it in order to be successful… so write down “ATM at 4:00 pm” on the calendar like you would a doctor’s appointment. It’s shockingly easy to forget about this little mini-errand until it feels like part of your normal routine.

4. Make a “no borrowing” rule.

If you leave your money at home, it can be tempting to bring out the debit card “just this once,” promising yourself that you’ll reimburse the account.

One purchase leads to another, and before you know it, everything is out of whack.

When you commit to the “no borrowing” rule, you ensure success with your budget.

5. Divide up the grocery envelope.

Using a grocery envelope is all well and good until you realize in the middle of cooking enchiladas that you’re out of cheese. When this happens to me, I call my husband and ask him to pick up said missing ingredient on his way home from work.

In keeping with the “no borrowing” rule, give your spouse a portion of the grocery money so either of you can make that quick trip when needed.

6. Don’t use envelopes.

There’s nothing magic about the actual envelope. Lots of people prefer not using envelopes simply because they don’t fit conveniently into their wallet. And that’s a valid consideration!

The good news is you have lots of great options, such as color-coded mini binder clips and store-bought file folders that you can cut out to custom-fit your wallet. If you want to invest a little money, you can even buy a wallet designed specifically to organize your cash by category.

7. Buy gift cards for online shopping.

In an increasingly online-oriented world, it’s almost impossible to avoid online shopping. I shop on Amazon for essentials like diapers and I’m so thankful for it!

But since you can’t use cash for online orders, here is a workaround: use cash to buy a gift card.

Almost every grocery store sells gift cards you can use online, so add it to your shopping list, pay for it with cash, and then enter the gift card code to the store’s online site.

This also provides a safeguard from online impulse shopping. If it’s worth buying, it’s worth taking the time to buy a gift card first.

Be patient with yourself as you get acclimated to a new way of spending money. New habits — especially good ones — take time to get used to, but you can be confident that incorporating cash into your budgeting system is worth it!

Hi, I’m Lauren! I share practical solutions to conquer financial stress at Determined Dollar. I’m a wife and mom, a follower of Jesus, an aspiring morning person, and a trained financial coach. I’m excited to show you how to take solid financial principles and apply them to real life!

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13 Comments

  • Amy says:

    What great ideas! I love it! I have always wanted to try this system but it seemed like a real chore to have to get it all set up. Also, I like to buy gift cards at Fred Meyer (Kroger) because if I use my loyalty card, it’s a good way to rack up extra gas savings with their loyalty program! Thanks for the tips, I am excited!

    • Lauren says:

      Amy, that’s awesome and thanks so much for reading! I’m excited for you! I hadn’t even thought about how buying gift cards will rack up store loyalty card points. 🙂 Hope you let me know how your cash envelope system goes and if you run into any challenges I’m more than happy to brainstorm with you!

    • Barbara says:

      We do the same thing at Kroger!

  • Ashley says:

    These are wonderful tips !! Thank you !

  • Jenn says:

    I’m taking this as a nudge of the Spirit!! Thank you for sharing this great information — it’s a fantastic reminder of what I should have done (and why!) a long time ago!!

  • Lea says:

    Great tips Lauren! We use cash in envelopes but take the cash out of the envelope and carry it in a wallet when we actually spend it. We only shop once a week for anything do to our schedules so we may take a portion of the grocery money and a portion of the miscellaneous money and put thenm in the wallet before we leave the house. Does that make sense?
    Thanks for sharing,
    Lea

  • technicals says:

    Great tips Lauren! We use cash in envelopes but take the cash out of the envelope and carry it in a wallet when we actually spend it. We only shop once a week for anything do to our schedules so we may take a portion of the grocery money and a portion of the miscellaneous money and put thenm in the wallet before we leave the house. Does that make sense?
    Thanks for sharing,

  • That’s awesome, Jenn! I love how God gives us nudges of encouragement.

  • guang says:

    My uncle actually told me to have 3 savings account, and on every income, divide among the 3 equally. Then I can only spend from one of the accounts. He meant saving 67% and just live on the 33%.

  • Jenna says:

    I’d love to see a visual of the system you made to organize money in a wallet without envelopes? Or just a detailed description?

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