I’m curious if cash filling envelopes actually work because they seem to be very popular right now. Which would you rather use? Why not, and why not? Do you favor any other methods?
4 Likes
I don’t cash stuff envelopes since I don’t use currency at all. I did, however, create a budget on Google Sheets, which I have been devoted to and truly adhering to. I just started using it in March, changing it from “monthly” to “pay-period.” Almost every day, I review my expenditure categories, the primary ones being grocery, dining out, personal expenses, and petrol. This year, I set out to save more money, and so far, I’m succeeding.
1 Like
It depends on many factors. Some people spend cash faster if it’s available, while others are more careful.
Personally, I prefer using my card to keep a detailed record of my spending. However, I tend to spend a bit less when I use cash. The rewards points from my credit card likely make up the difference, so I find it worthwhile to stick with cards.
Try both methods for a month and see what works best for you. You might also consider a hybrid system: use cash for categories where you’re prone to overspend and a card for the rest. For example, I dislike using cash for gas because it’s inconvenient and not easy to overspend on, so using a card makes more sense.
Whichever method you choose, be sure to start with a detailed budget.
1 Like
I do something similar with my bank accounts by categorizing my expenses and assigning each category to a specific account. Here’s how I manage it:
-
Auto-Paid Bills Account: This account is for recurring bills that are automatically paid each month. I keep a set amount of $1,500 in this account, replenishing it with each paycheck, and never withdraw money from it.
-
Household Expenses Account: This account covers gas, groceries, and household goods like paper towels and soap. I allocate $700 per month to this account.
-
Fun Account: This account is for discretionary spending, such as dining out, nails, and beer. I budget $300 per month for this.
-
Savings Account: Any money that isn’t used to refill the other accounts goes into this savings account. It has a set maximum balance of $5,000. If the balance exceeds this amount, the excess is transferred to my emergency fund. I also use this account for irregular expenses like car repairs, rent deposits, and medical bills.
-
Emergency Fund: This account has a minimum balance of $10,000, which I only tap into if absolutely necessary, ensuring my long-term financial security.
I used to have these amounts automatically deposited from work, but I found I was more likely to spend the entire allocated amount. Now, by manually transferring the funds, I often end up spending less on fun or household expenses, which allows me to save more.
1 Like
Simple Envelope Budgeting on the iPhone and iPad lets you practice the envelope method of budgeting. Plus, it’s a one-time purchase of just 99 cents.
I prefer not to stuff physical envelopes with cash, as it can be risky to have that much money on hand. However, using this app helps me mentally allocate my funds, which is what matters most.
1 Like