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Maybe you’ve read about the envelope system and you think it’s a great idea. You’ve talked to your spouse and they want to get on board. Let’s face it- there is a big difference between dropping a envelope system in your purse and getting one to fit in the back pocket of your trousers. Here are some tips for making the envelope system work for couples. I’ve also included my short Youtube video showing you step by step how I quickly and easily start an envelope based budget tweaking as needed for your own unique situation. Here’s how to get started with the cash envelope system for couples.
Build Your Budget Together
Envelope systems are an easy way to keep spending under control, but the first step is deciding how much money belongs in each envelope. To decide this, you have to see how much cash is coming in verses how much cash is going out.
Here a is free printable budgeting sheet. There are two different forms. One is for people who get paid weekly, the other is for people who get paid twice a month.
If you have an irregular income I highly recommend that you read Kalyn Brookes post from Creative Savings Blog titled How to Budget on Irregular Income.
Sit down and divide your income up between all the categories that apply to you. There are blanks for things that are specific to your household that you can add. Then decide which of these categories needs to be an envelope. For example, around our house we made envelopes for:
- Groceries
- Allowance
- Cleaning Supplies/Hygiene
- Baby Supplies
- Pet Supplies
- Eating Out
We would budget for utilities but we wouldn’t need a cash envelope for that because those are auto-paid each month from our checking or debit card. The envelopes should be created for things that you can easily overspend on from month to month.
Create Your Envelopes
Here is the video that shows you how I make, divide and load my own envelope system. You can use an accordion file like the one in the video or even paper envelopes. Mine costs around $1 to make.
Dave Ramsey also has one you can purchase if you wanna be fancy (Amazon Affiliate-).Deluxe Executive Envelope System (Dave Ramsey’s Financial Peace University)
SpendVelope Envelope Budget System(Amazon Affiliate)
Accept Your Wallet Space
Let’s face it, unless your husband carries a backpack or murse, he’s gonna have a hard time with 9 compartment envelope system. Our system was fairly easy because I do most of the shopping and spending and the only real categories my husband needed on a daily basis were allowance, gas and/or eating out money. His wallet has two divisions already in it. Therefore, we just limited his categories to those. For convenience he used his debit card for gas.
Create A Safe Place For Shared Envelopes
There may be categories in your cash budget that you just don’t want or need to carry around all the time. In those situations, consider investing in a fire proof safe for your home and keep your envelopes stashed. That way you both have access to the stash when home improvement or car repair projects arise. Just remember to re-fill your envelopes in these places every time you need to.
Gather Your Envelopes For Budget Night
On budget night, grab all your envelopes and go through and see where each one is at. Figure out if there is currently enough budget in that budgeted category based on what you have left at the end of the month in your envelope.
If your envelope is empty or you “borrowed” from another category, consider increasing the budget for that envelope and decreasing what you budget for in another area to be sure you can cover your expenses. Plan out your new budgets, fill your envelopes and go through another month, tweaking as you go until you have a solid system down.
This system actually helped me and my husband pay off $93,000 in debt in just under 2 years. If you are serious about bossing your money around this is a great place to start. After a year of doing this system we moved onto an electronic app based system. Everyone has to start somewhere and this might be the right system for you and your spouse.
What’s the toughest part of budgeting for your family?
Kim Anderson is the organized chaos loving author behind the Thrifty Little Mom Blog. She helps other people who thrive in organized chaos to stress less, remember more and feel in control of their time, money, and home. Kim is the author of: Live, Save, Spend, Repeat: The Life You Want with the Money You Have. She’s been featured on Time.com, Money.com, Good Housekeeping, Women’s Day, and more!
FAQs
You begin with multiple envelopes, each of which represents a budget category. You then assign a certain amount of cash to each one, based on how much you anticipate spending in that category for the month. Once an envelope is empty, you can't spend any more money in that category until your new budget period begins.
What is the downside to cash envelope system? ›
Cons
- It may be time-consuming. If you decide to use cash and envelopes instead of digital tools, you'll need to cash your paychecks and divide up the money every pay period. ...
- Cash is vulnerable to theft and loss. ...
- You miss out on credit card benefits.
- EveryDollar: Best for Dave Ramsey Followers. App Store: 4.7 stars. ...
- You Need a Budget: Best for an Ad-Free Experience. App Store: 4.8 stars. ...
- Goodbudget: Best if You Like the Envelope-Saving Method. App Store: 4.7 stars. ...
- HoneyDue: Best for Free Budgeting for Couples. App Store: 4.5 stars. ...
- Pocketguard: Best for Debt Payoff Plans.
What Is Dave Ramsey's Envelope System? The envelope system is a way to force yourself to accurately budget discretionary expenses every month. It demands honesty, discipline and commitment, but the reward is that you gain control of your finances.
What is the cash envelope budget method? ›
The concept is simple: Take a few envelopes, write a specific expense category on each one — like groceries, rent or student loans — and then put the money you plan to spend on those things into the envelopes. Traditionally, people have used the envelope system on a monthly basis, using actual cash and envelopes.
What is a downside of using a cash envelope budget? ›
Cash stuffing, like other budgeting methods, is a way to plan out your spending and keep track of expenses. While it can be helpful for curbing overspending and limiting credit card debt, the downside of budgeting with cash is that you're missing out on the protection and yields offered by bank accounts.
What is the 50 30 20 rule? ›
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
What is the best budget for a married couple? ›
80/20 Rule. This strategy might benefit you if you're new to budgeting as a couple. For your joint income, you can spend 80% on needs and wants and commit 20% to savings. This 20% could go toward emergency funds, college savings, retirement savings or debt reduction.
Why is Mint shutting down? ›
According to its parent company, Intuit, Mint wasn't making enough money, so Intuit began the app's closure in January.
Does Mint work for couples? ›
While Mint doesn't market itself as a couples budgeting app, you can use it to manage your finances with another person. You can import data from your financial accounts and add your personal and shared accounts to manage your finances through one shared Mint account.
While other budgeting methods merely track your spending, cash stuffing physically prevents you from going over budget. Once an envelope is empty, you can't spend any further. That makes it useful if you're an impulse shopper or find yourself coming up short every month.
Is cash stuffing a good idea? ›
The bottom line on the cash envelope method
Like any money-management tool, cash stuffing is only good if it actually improves your budgeting, spending, and saving habits. For some, the time involved and requirement to hold physical cash won't work.
What is the 100 envelope challenge? ›
The 100-envelope challenge is pretty straightforward: You take 100 envelopes, number each of them and then save the corresponding dollar amount in each envelope. For instance, you put $1 in “Envelope 1,” $2 in “Envelope 2,” and so on. By the end of 100 days, you'll have saved $5,050.
Does the cash envelope system work? ›
Every little bit helps! Cash envelopes are powerful weapons in the fight against overspending. They can help you manage your money better than you ever have—and help you reach your money goals faster. Put the cash envelope system to work and get intentional about how you're spending your money.
How to start the cash envelope system? ›
There are, however, some specific steps to follow for setting it up.
- Step 1: Add Up Your Monthly Income. Before you can begin using the envelope method to budget, you need to know your net monthly income. ...
- Step 2: Set Budget Categories. ...
- Step 3: Assign Budget Amounts to Each Envelope. ...
- Step 4: Spend the Cash in Each Envelope.
The idea is to divide your income into three categories, spending 50% on needs, 30% on wants, and 20% on savings. Learn more about the 50/30/20 budget rule and if it's right for you.
What are the disadvantages of cash payment method? ›
The disadvantages of cash:
- Hygiene concerns. Coins and banknotes exchange hands often. ...
- Risk of loss. Cash can be lost or stolen fairly easily. ...
- Less convenience. ...
- More complicated currency exchanges. ...
- Undeclared money and counterfeiting.
Building envelopes can fail when materials don't achieve the published performance levels, often as a result of errors in the manufacturing, storing, or handling of the materials or components within the product. Contractors must inspect all building products before using to prevent envelope failure.
What are the disadvantages of cash budget? ›
One of the main drawbacks of using a cash-only budgeting system is that it can be inconvenient and risky. You have to withdraw cash frequently, which may incur fees or limit your access to your money. You also have to carry cash around, which can make you vulnerable to theft or loss.
