How to make a money envelope system to save money

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When it comes to saving money, sometimes you have to get a little creative.

Saving money is all about finding a cash flow system that works for you and you alone. However, seeking advice and looking for ideas that have worked for other people can give you great insight and maybe even inspire you to take a different path forward.

It’s a very useful and quite fun way manage your money using printable money envelopes.

Bear with me, it’s a great system, but you have to learn to see the benefits!

What is the money envelope system?

We’ll talk more about how to do this, but to keep it simple here and now, a cash envelope system is a way to manage your money and have cash in front of you, rather than using your card for everything.

You’ll use printable cash envelopes to store your cash, but separate your money into cash envelope categories to keep it organized and separate.

Basically, you’re running more of a cash system keeping your money in your bank and use your card.

When you do this, you can easily lose track of how much you’re spending because you can’t actually see or feel it; almost no and you are wasting air!

This is a dangerous way to think about and see money, so having a cash system is a good starting point for anyone who really wants to take control of their money.

Once you know the basics, learning how to set up a cash envelope system isn’t difficult, and that’s something we’ll cover a little more in this article.

The basics of this type of system are:

• Pay your bills using online banking as you normally do
• The rest of the moneyi.e. food, social life, gasoline, etc is withdrawn from the bank and organized in adverbs
• You have several categories of cash envelopes and you do your best to stick to the budget you create before you start

You might think that having cash at home is a matter of security, and it’s certainly safer to keep it in your bank. Yes, you can argue this point, but you need to find a safe and secure place to store your wallets and the matter should be resolved.

When you have cash in the bank, it’s very easy to lose track of your spending and end up overdrawing; Being in the red is never a good thing, regardless of whether an overdraft is arranged or not.

Why does the cash envelope system work?

You can learn how to make a cash envelope system, try it out for a while, and then decide it’s not for you.

This is good; Not every idea will work for everyone, but you should at least try it out for a few months before making your decision.

Don’t just throw in the towel after a week because you can’t get used to it!

In general, the cash envelope system works for the following reasons:

• You can actually see the money and feel it with your hands.
  Psychologically, this means you have more control than something floating in the ether!
  You’re less likely to overspend because you’ll see your cash dwindle, which won’t feel good.
• It’s easier to see how much is left because it’s right in front of you.
  You don’t have to think about contactless payments you’ve made on your card that don’t show up in your pending transactions, and you don’t have to think about direct debits that haven’t gone out yet.
  All this is taken into account with your already paid bills.
  What you have in your cash envelopes is to last you through the month, and it’s easier to budget that way.

Being able to see money means you connect with it on a deeper level and feel bad if you overspend.
It puts you in control because it’s literally in your hands.

How to make a cash envelope system

Before you start using the cash envelope system, you need to set it up, and the more attention you pay at this point, the smoother your system will run.

As with anything, you need to get the basics right to make things work. If you see any minor glitches in your system, just make a few changes and try again.

First things first, you need to make a budget so you know how much cash you have and how many envelopes you need. This will tell you how many envelopes you need to print.

Now, you might think that budgeting is boring, but it’s quite the opposite.

When you have a budget, you’ll feel completely in control, and it will instantly relieve money stress. As a result, you will gain confidence and it will be much easier to handle everything when it comes to cash flow.

In the next section, I’ll briefly explain how to create a budget, but if you’re really into it, I’ve written several articles that expand on this topic.

So how do you start budgeting?

To access your online banking, sit down with a calculator, pen, paper, whatever bills you have handy, and your phone.

• Calculate how much cash you have coming in each month.

It’s best not to include overtime and just stick to your basic monthly salary. If you get any extras, that’s a bonus.

• Write down everything that comes out of your bank account each month,

For example, bills you pay, debts you pay and how much, any subscriptions and contracts you have.

• Take a closer look to see if you can get away with any of these exits,

e.g Do you have a magazine subscription that you really don’t use? Do you have an expired gym membership and can you cancel it? Can you downgrade your phone contract to a cheaper price?

How about contacting your utility providers and threatening to go to one of their competitors? It may not sound ethical, but he is trying to lower your monthly payments because they want to keep you on their books, not someone else’s!

After you have done all this, write down your adjusted numbers so that you have total outputs.

• Subtract your outgoings from the incoming amount.
• The remaining amount is the amount you will withdraw from your bank account and use in your money envelope system.

You should do this before you start calculating the amounts you will put into each cash envelope category spend a few weeks with some tracking.

This means you need to exercise how much do you spend each week on certain things, such as groceries, gas for the car, public transport, clothing, social outings, etc.

You can’t create your cash envelopes without knowing how much to put into them, but you should also check if you’re overspending anywhere.

Spend a few weeks tracking and then sit down and watch carefully to see if you can cut the excess amount. A good way to track your spending is to write down everything you spend, then you can look for patterns.

Once you have this information, you can create your money envelopes. Look at your expense tracker and work out your main categories. A few suggestions include:

• Food shopping
• Gasoline or transport
• Health and beauty products
• Animal care
• Entertainment
• Children
• Cleaning products/household
• Various items

These are just a few suggestions to give you an idea of ​​the types of things you should be looking at. If you don’t have kids or pets, you won’t need this special envelope.

However, you may have a large garden to look after and in that case you will need to create an envelope for gardening, or maybe you love crafts and it is your personal hobby, so you will need an envelope for that.

You’ll be able to find out how much you realistically spend for each category from your tracker, but the number one rule here is to be completely realistic.

Next, you need to go to the cash register to withdraw the cash you need for the month. Obviously, be sure to follow safety rules when taking cash out of the machine and driving home with it, but we’re sure you don’t need to be reminded of that!

Now comes the fun part!

Take your printable envelopes and stack them by taping down the edges. Once you have all your envelopes ready, write the category on the front and divide your money into envelopes according to the plan you have already created.

Your next question is, of course, where to store your money envelopes.

It should be in a safe place. It’s not a good idea to carry around your envelopes in bulk, so invest in a mini safe or lockable cash box.

To prevent overspending and keep your envelopes safe, you should only withdraw the money needed for that item and return the change in the envelope.

Avoid taking money from other envelopes

We understand, sometimes things happen, maybe an unexpected situation arises and you need to take some cash from another envelope.

While you should avoid doing this as much as possible, as long as you can “fix” the problem quickly, there should be no harm. However, you should try to avoid it if possible.

The reason is that if you take cash out of another envelope, you’re basically “robbing Peter to pay Paul” and that will affect the rest of the month. As a result, you’re not as stress-free as you’re meant to be, you’re constantly chasing your tail, and that’s something we try to avoid!

If this is something you find yourself doing a lot of, you need to sit down with your budget again and see if you budget a little less and see if your follow through is realistic.

It’s good to go back and adjust everything this way; it’s better to do this than to constantly try to transfer money and confuse yourself further.

What to do with money envelopes at the end of the month

If you have money left in any of your envelopes at the end of the month, you have reason to pat yourself on the back!

What you do with that cash is up to you, but it’s best to either treat yourself to a job of the month, or put it in a savings account and watch it grow.

For a good middle ground piece why not treat yourself put something small and the other half of the extra money into a savings account; everyone wins this way.

Learning how to manage your money can be a trial-and-error deal at first, and it’s important to give your new system time before deciding whether it works. If you have a problem, look at why it’s happening before giving up on the idea altogether.

Having a cash system instead of carrying your debit card all the time definitely gives you more control and allows you to see what you actually have. For many, this is a great way to take control and build confidence in money management.