Today's Money: Budgeting with Cash Envelopes

The economic climate has sparked a new interest in budgeting.  It may be out of necessity, or it may be in response to the media attention this topic has received.  Either way, there is something to be said for living within or below your means.

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There are many budgeting tools out there to manage bills and your checking account register.  What we cover today is a much more basic approach to managing expenses.  It will not be used for everything, but will help to manage day to day expenses.

This will require a little work up front in terms of budgeting, making the envelopes, and getting the cash.  However, the satisfaction of taking control of your finances and spending is well worth the effort.  You could use pre-made envelopes if you wish.  We have included an easy to use template to make the process easier for you.

savour… cold hard cash

Cash Envelopes

The cash envelope allows you to specify how much you are going to spend in a given period of time.  Fill the envelopes for the week or weekend and when it’s gone… it’s gone.  This will be quite an adjustment for some in the beginning, but in time it may help to illustrate how you are spending money.  For many, it is a huge eye-opener.

The attached cash envelope template allows you to print, cut, and fold your own envelopes.  They are just big enough for some cash and we even made a little pocket for receipts.  We made sure to include a register, of sorts, on the front so you can log your spending if you wish. Just click the template image below and print from your browser.

Things to consider:

Be sure to budget wisely.  The idea is to have some limits, but if you are too ambitious you may have to go without or go get more money which could leave you feeling defeated.

Understand that there will be exceptions.  This does not always keep you from spending money, but it does raise the level of awareness.

If you go a week without using your debit card, take that time to really balance your checkbook register.  The absence of $3.00 coffee purchases will make it easier to tackle.

This method and template could easily be adopted to dole out allowance or holiday shopping money.  It is a great way to show kids how to manage their own money.

If you are thrifty enough to actually have money left over at the end of the period, reward yourself by adding it to the next period's pot or, better yet, tuck it away in savings.