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Implement A Cash Envelope System For Sanity

How To Do Cash Enevelope System With A Family - This Mum AT Home Blog #nospendweek #mealplanning #thismumathome #blog #mblogger #money #save #money

What Is A Cash Envelope System? Remember back in the old days (before ATM cards) when your grandparents would simply just pick up a cash payment from work, then smartly divide it up weekly for bills, groceries etc? Well its basically that! These days its so easy to pick up your card and pay bills/purchase things whilst also losing track of what you are spending. Things can get stressful at times if you do not have what you need because there has been no budget in place or you have simply just lost track. >>> Check out an updated post on How I've Created A Digital Cash Envelope System Since COVID. 

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I first herd of of this system mentioned from fellow You Tubers that follow Dave Ramsey. I then looked him up and took advice from him on setting up envelopes and how to use. He along with others sell fancy envelope systems, but for me personally I just made my own that works for me (I've even inspired other friends to start when they have seen me using my envelopes!)


How To Start

The most important thing is to firstly have a budget in place for your pay check period. This budget should tell you what money you have coming in and what bills and other expenses you have going out. From here you need to decide what bills and expenses you will pay digitally and what others you will use your cash envelope system for.

My two tips on this is to:

Tip #1  - Have all your digital bills/expenses set on automatic payments (or what ever your pay check period is) from your bank account so you do not forget or spend money you shouldn't. You do this by simply working out what each bill/expense is costing you weekly and have it go over atomaticly by setting up ongoing payments/transfers through your banks online banking system.

Tip #2  - Have as much as you can set up as a cash envelope system. You will be less likely to spend money where you shouldn't if you have it separated into different envelopes and you can see the actual cash.


When You Have Your Budget Set

When you have your budget set and know how much money you require for each bill/expense weekly then set up your digital automatic payments and start your physical envelope system.

Each envelope should have written on it what bill/expense it is eg groceries and then also the $ amount so its quick and easy for you to use. Some people use a standard envelope and have them stored in a pocket of some sort. I personally like to use a small zip up pouch as its less wear and tear. I keep my pouches safe in a small filing system that's easy for me to get to and take with me if i wish.


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Cash Envelopes I Have Set Up

These are not for everyone but are what we need personally for our family. We do not spend the money on other things if we can help it. We simply take the cash out of each envelope for each expense as needed. If we do not have the money then we DO NOT spend the money - unless it is an emergency eg ran out of food, milk nappies etc. In that case we need to pull the money from another envelope and either pay it back into that envelope or simply miss out!

* Groceries

* Clothes

* Vacations

* Petrol

* Gifts - Birthdays & Christmas for friends and family

* Car repairs, service & rego

* Fun Money (this is our weekly family fun money to spend on family activities and other luxeries)

*** What about medical & dental ?- I dont have this as our Dr is free as he 'bulk bills' and we just go to the public hospital for any treatments we have had to do that includes having a baby, xrays, men/women checkups as adults, blood tests, c-section. Dental is not covered though and I do need to start an envelope for that. 


How Cash Envelopes Will Make Your Life More Simple

Such a simple thing to implement into your home to make life less stressful and simplified. Once you implement this system, spend a few weeks getting your bearings and working your budget to work for your family. You will never look back! This is an 'old way' that is truely better than the modern day digital when you can use it. It will make budgeting less stressful, especially for families that now have young children and less income coming in. Being able to physically see cash will restrain you from overspending and encourage you to save save save for the things you really wish for! Cash envelopes help you keep up with bills and even get ahead in your day to day expenses. It has especially helped me prepare for my Meal Planning and a 'No Spend Week' that I do a few times a year. Such a simple task has certainly simplified my life into a less stressful one!