Envelope Budgeting . . . A Simple Way To Gain Control of Your Money

envelope budgeting

In today’s card-swiping culture it’s easy to lose track of where your hard-earned money is going! Believe me, I know! Budgeting and keeping track of money are NOT my strong suits! (I did recently start a deals page to help!)

You have probably heard of the envelope budgeting system. It was made famous most recently by money guru Dave Ramsey as part of his Total Money Makeover plan. But the concept has been around a long time! During the Great Depression, when people didn’t have much trust in banks, people would set aside money for specific purposes in envelopes as a way to keep track of what little money they had. With this simple budgeting system, people always knew exactly how much money they had spent and how much money they had left.

What a concept!! And guess what? It works just as well today! If you would like to take control of our money, instead of the other way around, you might want to give this a try.

Since Christmas is coming up (way too fast!) I thought I might try and do a version of this envelope budgeting to keep me on track with my Christmas spending. Hopefully from there I will move on to more envelopes and more control. But for now I figure it’s at least a start!

I started with the most IMPORTANT part…a cute envelope to put my money in! lol.  I’m kidding. It’s not THE most important part…but it’s always nice to have something aesthetically pleasing to look at when implementing an odious task. ;-)

I decided to draw up a simple cash envelope template based on those cool cash envelopes you get from the bank. Then I added some lines to record expenditures on. All you have to do to make your own envelopes is:

  • download the template here
  • print out on whatever kind of paper you like
  • cut out envelope along solid lines
  • fold on the dotted lines
  • add a couple of pieces of tape to secure

envelope budgeting

envelope budgeting

Of course you could just use some regular envelopes you already have lying around the house, but what I like most about these is they fit nicely inside your standard wallet.

envelope budgeting


Now you are ready to set up your own cash envelope system! Here are a few simple basics for starting (adapted from Dave Ramsey):

  • Set up a BUDGET

I know…it’s a “dirty word” to me too! ugh. I really despise that word. BUT, I know from experience, life is MUCH easier when you have one and it’s essential if you’re going to successfully implement the envelope system. I found a VERY SIMPLE method for determining your Income and Expenses at Budget101.com.

  • Create Your Categories/Envelopes

Start with the basics like food, gas, clothing and entertainment.

  • Fund Your Envelopes

After you’ve categorized your cash expenses, fill each envelope with the money allotted for it in your budget. For example, if you allow $100 for clothing, put $100 in cash in your clothing envelope for the month.

  • Go Forth And Spend (Within Your Budget)

Once you’ve spent all the money in a given envelope, you’re done spending for that category. No visits to the ATM to withdraw more money!

  • Cash Is King

For some reason spending CASH is more “painful” than swiping your debit or credit card. Using cash whenever possible is a good habit to get into to help avoid over-spending and impulse spending.

  • Don’t Expect Perfection Overnight

It will take a few months to perfect your system. Don’t give up! You’ll eventually get the hang of it and it will be SO worth it!

envelope budgeting


A few extra tips:

  • Plan your budget and fund your envelopes based on your pay periods.
  • Spend each month’s income and each individual paycheck on paper before it comes in.
  • Have some fun! All budgeting and no “fun money” makes Jillee a dull girl!  :-)
  • Start now!


Do you have a budgeting system set up in your household?


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  1. Sue Coates says

    I used to “forum” button on top of this page and that one worked……earlier I was talking about the link on the bottom of this page – where it says “one good thing by jillee forum” …..

  2. Iryna Miller says

    I had this system for several years ago. And it was really working! Now I am using paper strips to divide my money in the home-budget purse:) And every strip has it’s aim name :) That’s simple and working for me too!:)

  3. says

    I’ve been using a system simular to this….I set up FREE checking accounts at my bank for things like property taxes, insurance, Christmas, etc., each month I transfer a set amount to each of the accounts. When I need the money again I transfer the amount needed to my checking account and write a check. I like this system because I don’t have cash sitting in the house.

    • Tracy says

      I do this with free accounts also, but I use cash envelopes for the everyday stuff like groceries and eating out.

  4. says

    I saw a link on pinterest to a smart phone app which utilizes this method, but can be shared with your spouse. That way when both of you are trying to stick to the allotted budget and you’re not together there won’t be overspending.


    I’ve been meaning to try this method myself. Cash works for me, but I’m definitely guilty of hitting up the ATM when I run out.

    • Julie says

      Thanks so much for sharing this app, some friends of mine were having trouble with the cash envelope idea & were trying to do the Dave Ramsey thing, so they were really excited when I shared this with them. I sadly, don’t have an android or I-phone, so the hubs & I have to stick to the cash…

  5. Carole says

    A VERY good idea! We all need this reminder especially in tough times such as theses. (and it could get tougher.) Gets us back to the basics. Thanks.

  6. Aimee says

    Hi! Love your site! I personally don’t believe budgeting is very helpful in saving money and curbing spending. I think what works best for us is actually tracking expenses by category so that over the course of, say, a month, you can see your spending habits and just HOW MUCH you do spend on eating out vs. groceries, shopping, entertainment, etc. Then that can help you, if you do want to save “X amount” or percent on your monthly income, you know what categories to tackle and to try to spend less on (like, making notes to eat out only once a weekend, choosing to watch one movie theatre movie a month, etc.). I feel the same about budgets of companies and governments… so much money goes to waste when people are allowed to “spend all of an X amount of money” on something and people are likely to waste money in order to use it all up so that their budgets are not cut back for the following year. For the personal expense tracking, I’ve been using The Birdy [https://thebirdy.com/] for the past almost year and LOVE it (and the fact that it’s free)! It’s so helpful that you can create and organize your own categories, see your spending in easy graphs, and daily just email your expenses to a certain email address and they are inputted directly into your account for that day.

    • Stephanie says

      That’s how we budget. You constantly have to have a plan for your money. I think of a budget as a guideline so we spend our money with a purpose rather than just because we have it. But you have to constantly be analyzing your budget and spending so that you can see where to make improvements. Cash is helpful if you tend to over spend easily. For example going $5 over at 2-3 different grocery stores can have you spending $10-15 extra every time you shop. If that is every week you spent an additional $40-60 that month. Having cash can limit that extra spending.

  7. Karen says

    Jillee, thank you so much for posting this! Budgeting is not rocket science! As Dave Ramsey says, the hardest part is learning to control the person in the mirror. :) And it’s true, for me anyway! Cash is the way to go, you feel the pain as you hand over the $$. Thank you for the template, I’m off to find my scrapbook paper to print these!