These free printable cash envelopes can help you track your spending and stick to your budget so you can save more money!
Spending less money so we can save more sounds good in theory, right? But how do we actually put it into practice?
There are many different strategies we could use to start saving money, but one of the most simple and straightforward ways is with the cash envelope system for budgeting.
What is the cash envelope system?
Made popular by Dave Ramsey, the cash envelope system (also known as “cash stuffing”) involves setting a budget amount for each category of variable spending, putting that amount of cash into an envelope, and only using the money in the envelope to pay for items in that category. When the cash in the envelope runs out, there is no more spending in that category for the remainder of the month (or pay period).
The cash envelope system is helpful because it allows us to physically see how much money we have available to spend in any particular category. (Cash envelopes are generally used for variable expenses. Learn more about tracking recurring expenses here.)
If you’d like to try the cash envelope system for budgeting in your home, here are the steps you can follow to do so.
1. Create a budget.
Our free printable Budget Binder can help with this! We can look at past bank statements to figure out how much we’re spending in each category per month. Based on our past spending, we can set a goal amount for future spending by category.
What are common cash envelope categories?
Though our budget will also include amounts for recurring spending (like mortgage/rent, car payment, student loans, etc.), cash envelopes will only be used for variable spending.
Some common cash envelope categories are…
- Groceries
- Eating out
- Gas
- Household supplies
- Clothing
- Entertainment
- Gifts
- Personal care
- Hobbies/fun money
2. Prepare and fill the cash envelopes.
Once we’ve created a budget and know how much we’re allotting for each category, it’s time to put together our cash envelopes… And we just so happen to have a pretty printable for that!
Cash Envelope Supplies
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- Cash envelope printables (below)
- Scrapbook paper
- Scissors
- Tape or glue dots
Print the Cash Envelope Template
Our printable cash envelopes come in two parts: (1) an envelope template, and (2) a form for tracking spending right on the front of the envelope.
We think it’s kind of fun to print the envelope template on the back of a piece of pretty scrapbook paper to create beautiful cash envelopes that will get us excited about using them!
Once the cash envelope template has been printed, use scissors to cut along the solid lines around the outside…
And fold the template on the dotted lines to create the envelope shape.
Secure the envelope with some tape or glue dots to ensure that they stay together.
Finally, cut out the spending tracker cards and use tape or glue dots to attach them to the front of the envelope for easy tracking.
After the cash envelopes are complete, write the category and budgeted amount (starting balance) on the front of each one, and fill each envelope with the appropriate amount of cash.
(If you prefer to keep track of your spending on binder pages, snag our free printable check register here.)
3. Stick to the budgeted amounts in the cash envelopes!
Now it’s time to put our budget into action! Each time we make a purchase in a particular category– groceries, for example– we’ll be sure to pay with the cash that we’ve allotted in our cash envelope.
Once the purchase is complete, we can document it on the card on the front of the envelope so we always have an accurate total of how much we have left to spend.
Remember: The amount of cash in each envelope is the only money we have to spend in that category for that designated period of time, so it’s important to track accurately and plan our spending appropriately.
What if I run out of money in my cash envelope before the end of the month?
If the cash in a particular category is depleted before the month ends, we should try our hardest not to spend any more money in that category until our cash envelopes are refilled.
If our grocery envelope runs out, we can get creative by challenging ourselves to make meals using only items we have in the pantry or freezer. Or if the clothing envelope is empty, we can hold off on new clothing purchases until the following month.
It will be tempting to borrow money from other envelopes, but resist this as much as possible! The cash envelope system is so beneficial because it helps control our spending, so simply adding more funds from somewhere else when we run out defeats the entire purpose.
What if I have extra money in my envelopes at the end of the month?
Yippee! If we don’t spend all of the money allotted in a certain category for the month, this is a great opportunity to put some extra cash toward a debt we’re trying to pay off or a savings goal we’re trying to reach.
4. Tweak your cash envelope system as necessary.
If we realize that the amount we’ve budgeted in a certain category is unrealistic (either too much or too little), we can certainly tweak the amount for the following month.
While it’s important to be diligent and careful about our spending when we’re trying to pay down debt or build up our savings, we also need to be realistic about what’s actually attainable from a spending standpoint so our budget can be as accurate as possible.
There’s more where that came from!
The cash envelopes are part of our free printable Budget Binder! See all the printables in the Budget Binder and snag your copy in this post!
The Cash Envelope System: Final Thoughts
We hope these cash envelopes will be helpful for you as you work to meet your financial goals! (And dare we say… even make budgeting a little bit fun?!)
We are so proud of you for being intentional about your spending so you can make smart financial decisions and set yourself up for success in the future. You’ve got this!
Free Printable Cash Envelopes: Frequently Asked Questions
Some spending is unpredictable and just can’t be helped. If we have an emergency and absolutely need to spend more cash than we’ve budgeted, we should sit down (with our significant other, if applicable) and decide the best way to proceed in order to cause the least negative impact on our finances.
Sometimes this may mean pulling from additional cash envelopes or dipping into our emergency fund. In these cases, it will be especially important to be diligent about sticking to our budget in the remaining categories if at all possible so we don’t dig ourselves into a hole of debt.
Cash envelopes are great because they help us to…
- Stick to a set budget
- Be intentional about our spending
- Have a tangible way to see how much money we have available
- Separate spending by category
- Hold ourselves accountable
Look at past bank statements to get a ballpark figure for how much you typically spend in each category.
If you don’t want to do that or your bank statements aren’t available, simply track your spending for the first month to see where you land. Then use those numbers to set budget amounts for the following months.
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Happy organizing!
Introducing the Cash Envelope System for Budgeting
As an expert in personal finance and budgeting, I can provide you with valuable insights and practical advice on various budgeting strategies. The cash envelope system is one such strategy that has gained popularity, especially after being popularized by financial expert Dave Ramsey. The system involves setting a budget for different categories of variable expenses, putting the allocated amount of cash into separate envelopes, and using only the money in each envelope to pay for expenses within that category.
The cash envelope system offers several benefits. It provides a tangible way to visualize and track your available funds for each category, allowing you to have better control over your spending. It also encourages accountability and helps you prioritize your expenses. By using cash envelopes, you can clearly see how much money you have left in each category, and once the cash runs out, you know you've reached your spending limit for that category.
In the following article, we will explore the key concepts and steps involved in implementing the cash envelope system.
What is the cash envelope system?
The cash envelope system is a budgeting method that involves allocating a specific amount of cash for each category of variable spending. This method helps you track your expenses and ensures that you only spend what you have allocated for each category.
1. Create a budget
To implement the cash envelope system, the first step is to create a budget. This involves reviewing your past bank statements to understand your spending patterns and determining how much you typically spend in each category per month. Based on this information, you can set realistic goals for future spending in each category.
What are common cash envelope categories?
Cash envelopes are typically used for variable expenses, while recurring expenses like rent, mortgage, and loan payments are not included. Common cash envelope categories include groceries, eating out, gas, household supplies, clothing, entertainment, gifts, personal care, and hobbies/fun money.
2. Prepare and fill the cash envelopes
Once you have established your budget and allocated amounts for each category, it's time to prepare the cash envelopes. You can use printable cash envelope templates, which are available for free online. Print these templates on scrapbook paper to create visually appealing envelopes.
After printing and cutting the templates, fold them along the dotted lines to create the envelope shape. Use tape or glue dots to secure the envelopes. Next, attach spending tracker cards to the front of each envelope to easily track your expenses.
Now, write the category and budgeted amount on the front of each envelope, indicating the starting balance. Finally, fill each envelope with the appropriate amount of cash according to your budget allocations.
3. Stick to the budgeted amounts in the cash envelopes
The key to the cash envelope system is to strictly adhere to the budgeted amounts in each envelope. When making a purchase within a specific category, such as groceries, use the cash from the corresponding envelope. After each purchase, update the spending tracker card on the envelope to keep track of the remaining balance.
It's important to remember that the cash in each envelope is the only money you have available to spend in that category for the designated period. Therefore, accurate tracking and careful planning of your spending are crucial.
What if I run out of money in my cash envelope before the end of the month?
If you deplete the cash in a particular envelope before the month ends, it's important to resist the temptation to spend more in that category. Instead, try to find creative solutions. For example, if your grocery envelope runs out, challenge yourself to create meals using items you already have in your pantry or freezer. Avoid borrowing money from other envelopes, as it defeats the purpose of the cash envelope system.
What if I have extra money in my envelopes at the end of the month?
If you have leftover money in a particular envelope at the end of the month, consider putting it towards paying off debts or saving for future goals. This allows you to make progress towards your financial objectives and reinforces the habit of smart spending.
4. Tweak your cash envelope system as necessary
As you implement the cash envelope system, you may find that certain budgeted amounts are unrealistic or need adjustment. It's essential to review your spending and make necessary tweaks for the following month. Striking a balance between being diligent about your spending and setting achievable goals is key to maintaining an accurate and effective budget.
Conclusion
The cash envelope system is a simple yet powerful budgeting method that can help you track your spending, stay within your budget, and save money. By using physical cash and separate envelopes for each category, you gain a clear understanding of your available funds and make more intentional spending decisions. Remember to stick to your budgeted amounts, find creative solutions when envelopes run out, and adjust your budget as needed. With the cash envelope system, you can take control of your finances and work towards your financial goals.
