Friday, June 1, 2018

Pro's & Con's of Cash "Envelope" System

Today I thought I would share the pro's and con's I have experienced with the cash envelope system.


Having a set amount of money for certain categories has helped me be more aware of the money I can spend, and it helps me pay close attention to what is being spent.

It helps limits frivolous spending.

A cash envelope system helps save for items in advance. having a car category and pulling out money monthly helps save for oil changes or etc. besides a chunk coming out at once.

To add to the above using cash only also helps you learn to do more on your own such as changing your oil yourself to avoid spending so much money and being able to tuck away more in savings or build car cash fund so if there is a real emergency need you have a little cushion.

To wrap up the Pro's of cash envelope system is that it simply makes you more aware of the money you spend and teaches you to stretch, be frugal, and make better choices on purchases.


Dealing with envelopes can be a hassle. They rip and tear. They don't hold change well. This is why I went ahead a got a cash envelope system wallet for Christmas. Best investment!!! I do have envelopes put up at home that I don't use daily. But in my wallet I have gas, grocery, supplies, and personal.

Hassle of figuring all the cash that needs to come out every check and then dealing with the bank teller trying to get the right kind of types of change to put in envelope so it balances out can be tiresome.

This is a BIG ONE. Temptation to use money out of another category to cover an expense or make a purchase YOU REALLY don't need. Example...a sale or last minute eat out with friends and that category you have for those is empty so you decide to cover cost with grocery money or gas money. Not good! Done it and learned the hard way. That is why being aware is good.

To wrap up the Con's is that sometimes it just can be overwhelming dealing with that much cash and stuffing envelopes. You have to be very disciplined to not use money out of other categories.

Have you ever done the Cash Envelope System?  Share your thoughts, tips and ideas on how you made it work?



  1. Sometimes we use the cash envelopes and it does keep us on track.
    We started our June budget a few days ago and are not doing it this month as we plan to spend almost nothing on regular expenses
    But I expect we will be back to them in July.

    For gas, we buy a Walmart gift card monthly as it is the lowest price gas in our town and we prefer to pay at the pump.

  2. I have never done this, But I just pay all the bills and then try to spend very little on groceries.

  3. We keep change, along with some scrimped and saved cash, in a separate jar. If we need to, we can borrow from the jar for an unplanned opportunity or emergency. But the rule is that we must write down the amount, and then pay it back as soon as possible, along with a hefty amount of interest.... So we are being our own loan sharks, essentially.

  4. I've never tried the envelope system. I don't think I have the self control for it. I would be borrowing money from other envelops to buy books all the time!
    P.S. - Thanks for stopping by my blog.

  5. I don’t do this. My bank sends me a text with my remaining balance every time there’s a transaction or a direct deposit. If I text “bal”, then it will give me my balance. I just track the running total on that text thread.


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