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The cash envelope system is a potent budgeting tool. Even if you feel like you are a budgeting aficionado the cash envelope system will teach you a thing or two about your spending habits.

I have been taking budgeting seriously for the last five years, but it wasn’t until recently that I decided to give cash envelopes a try.

Upon implementing them into my budgeting arsenal, I learned that I was likely overspending in many areas without even knowing it. 

The cash-only spending makes your spending habits scarily transparent.

You will need to be willing to face the music and accept some painful truths. However, the rewards you reap as a result are second to none.

Hopefully, I haven’t scared you away from this fantastic budgeting tool. I don’t know about you, but I feel a little cheated when someone tries to sell me on an idea with only the roses and forget to tell me about the thorns that come along with them. 

What is the Cash Envelope System?

In case you aren’t familiar with the cash envelope system, I will share with you a little bit about how it works.

Each month you will have a set amount of money put aside for each spending category in your budget.

You will put money into corresponding envelopes and only spend it on paying a bill or purchasing items in that budget category.


Ultimate Money Saving Guide

Are you sick of living paycheck to paycheck? In the Ultimate Money Saving Guide, you will be able to find ways to cut back without giving up your Starbucks. You owe it to yourself to gain control of your financial situation. The only thing you have to lose is the added stress that comes with having too much month at the end of the money.

How to Get Started With the Cash Envelope System

First, you will need to have your budget figured out. If you need help completing that task check out the Ultimate Budget Guide to get you started. You will learn how to set category percentages and the importance of tracking your spending.

Now that you have your budget categories determined, you will be able to start implementing the cash envelope system.

For each spending category you have in your budget you will need an envelope. Label each envelope and just put enough cash in each to cover the monthly expenses for that budget category.

You will easily be able to see how much money is left in each budget category at any given time just by counting the remaining cash in the envelope.

This system is an excellent tool if you are notorious for overspending in a specific category. The cash envelope system will keep you on track.


Spend Only What You Have in Each Cash Envelope

To be successful with the cash envelope system you need to respect the amounts you put into each envelope.

If you set a $500 a month budget on buying food you need to stick to it.

Let’s say the $500 is gone and you have a week left in your budget month and you are seriously craving some Ben & Jerry’s. The ice cream will have to wait a week. 

You will learn to exercise discipline which will pay off significantly down the road.

Putting the Cash Envelope System to Work

At this point, you know what a cash envelope system is. 

You also know what your budget looks like and how much money you will need for each spending category.

Now it’s time to put all the pieces together.

Below you will find fun and creative ways you can make your cash envelope system today.

Create your envelopes and fill them with the required amount of cash.

Cash Envelope Systems

Veronica over at True Bliss Designs has created these lovely printable cash envelopes. There are five designs to choose from so you are sure to find one you like. 

The envelopes come with space to record your spending on both sides. This feature will save you time and money by not having to print more out repeatedly.

Maybe some of you are like me and never carry cash. Well, you can still use the cash envelope system. It’s just like the ‘old fashioned’ ledger used when you’d write out checks.

I found this system easier when I shop at stores in which my budget categories overlap. For example, when I shop at Costco, I not only buy food but sometimes clothing and household items. Instead of juggling cash between envelopes or different transactions, I can subtract the appropriate amount per category by referring to the receipt.

Kumiko from The Budget Mom shows you how to create a stunning cashless envelope system that follows the same premise of the original system.

If you are hands-on and like to get crafty, these next envelopes are just for you. 

With a short list of craft supplies, Jennie from Jennie Moraitis will show you how to put together a cash envelope system that shows off your creative flair and keeps your budget on track.

When supplies are limited, and you want to get started with your cash envelope system, there are a few things you can use around the house.

Chances are you have a drawer with a stash of standard mailing envelopes. Grab a few of those and some markers or colored pens and label your budget categories.

Liv from Funding Cloud Nine also demonstrates how you can use a simple paperclip or binder clips to create an alternative system. 


  • Step 1 – Create your monthly budget
  • Step 2 – Categorize your expenses
  • Step 3 – Pull out cash and fill your envelopes
  • Step 4 – Only use the cash for in each envelope for that category of spending


It is vital to start with your budget before you try to implement the cash envelope system. If you don’t set up a budget first, it’s like trying to understand what’s going on in a chapter book when starting at chapter 3. You’ll be missing the details that allow the rest of the system to make sense and work.