envelope pink with ribbon

Throwback Money Tracker: Cash Envelope System

Aww, the good ol’ fashioned days of a cash envelope system. My first paychecks started rolling in at about age 12. Hello babysitting money. I didn’t do much of anything with the money besides putting it in a savings account in the bank.

My parents emphasized savings. A lot. They paid for all of my basic childhood needs. School clothes, endless shoes and equipment for sports, haircuts, etc. But something happened at about age 15 when I started receiving full-time employment paychecks around my Freshman year of high school. Anything I purchased, I wanted it to be MINE. Not something someone else bought me and I may have to share with my sister.

The year was 1999 and minimum wage was $5.15. The first full-time paycheck I received was a little over $200. My eyes lit up like a kid on Christmas. There were THREE digits in this paycheck. What’s the first thing I did? Of course, drive to the bank and cashed it out. What’s the next thing I did? Drive to Walmart and purchase a 5 CD disk changer.

My life was complete. I could play CDs in my room for hours on end without changing the CD every 12 songs. Oh, and it came with a remote. Did my parent’s critique my purchase? I think they simply said, “Nice. I know you’ve been wanting one for a long time. Just make sure you save enough to pay for your own taxes at the end of the year, your student loans and enough to live off of when you graduate high school.”

Wait. What? Taxes? And I have to pay for my own crap at college? OK. Adulthood sucks. The first paycheck splurge was over. I dug through our house to find ugly mailing envelopes and markers. It was time to get organized and disciplined about savings.

Are you ready to do the same?


​How To Implement A Budget System In Your Home

Before implementing a cash envelope system in your home, you may want to first develop a money tracker, or a budget system. This helps identify all your fixed costs; expenses that you MUST pay every month such as food, rent, insurance, daycare, etc. If you are just starting out getting organized, Excel is a nice budgeting tool, as well as good old fashioned notebook, pencil and calculator.

A cash envelope system works great for pre-teens to get a basic understanding of money. As well as for any jobs where you earn cash, such as tips, or if you need to create self-discipline with your spending. In my opinion, it’s 20x more difficult to hand over beautiful, crisp cash than a plastic card you can swipe.

You also may want to try and identify your annual or unknown expenses. As a teen, my parent’s initially freaked me out about taxes. I had no idea what they were. But they sounded scary. So I took out $20 each paycheck in an envelope and hoped I had enough for when I had to file taxes at the end of the year. If I would have paid closer attention to all the deduction lines on my paycheck, they were already being withheld and I actually got a small tax return after filing. Small windfall!

As an adult, this mindset has shifted to budgeting for emergency funds because there are so many! The microwave and fridge that unexpectedly decided to die at the same time. A flooded home that insurance does not pay for. And the list goes on of horrific events that could happen and could cost you money. Eventually, I also grasped the concept of ‘make your money work for you’ through investing and compound interest which is a great way to grow your savings.

From Check, to Wallet, to DIY Printable Envelopes in a Binder: Create Categories To Track Your Cash!

I realize most businesses today auto-deposit paychecks into your bank account. I’m all for an organized, electronic system! But, it doesn’t create the discipline that a cash envelope system does if you need it. For starters, if you have an auto-paycheck deposit, you can leave the amounts for all your fixed expenditures in your account to pay these bills. Then, cash out the rest of the spending categories.

What are your other spending categories? After fixed spending categories (rent, insurance, groceries, utilities, daycare, etc.), comes the fluctuating categories. For example, this can be fast food, birthday gifts for the month to buy, co-pays for appointments, entertainment (don’t forget the neighbor kids that stop over to sell fundraiser tickets) and the list goes on.

Next, create envelopes for each fluctuating spending category. You can use simple mailing envelopes and markers like I did when I was a teen, or you would like to take organization to a whole new level, use construction paper to create your own colored envelopes. Then, label the envelopes and place them in a binder inside of page protectors or a zip pocket.

Benefits Of A Binder And Envelopes For Tracking Your Cash

By keeping your envelopes in a binder, reduces the risk of losing random envelops around your home, as well as you can tuck away the binder away in a safe or locked drawer in your home. Binders also usually come with pockets in which you can print and store your budget to keep track of what should be the amount in each envelope and the monthly expenditures coming out of it.

One year, my mother-in-law gave me my first planner as a Christmas present. I kind of scoffed at the idea, but when work, kids and life became a little stressful and chaotic, I turned to it. Now, I use it daily and request one every year for Christmas!

There are many great budgeting and expenditure tracking planners for purchase online. This planner from amazon.com is similar to my personal planner and is focused on financial budgeting with a cash envelop system:

Bill Organizer Budget Planner Book With Pockets

​Bill Organizer Budget Planner Book, image via amazon.com

Step By Step Guide: How To Create A Cash Envelope System

  1. Identify your total, expected monthly income.
  2. Subtract your total fixed expenses (rent, loans, utilities, daycare, groceries, etc.). Put the cash in each of their own envelopes.
  3. Subtract expenditures that could fluctuate each month (fast food, birthday gifts, entertainment, etc.). Put the cash in each of their own envelopes.
  4. Subtract an amount to put in emergency funds envelope.
  5. Subtract an amount to put into savings or investing envelope.
  6. If there is anything left in each envelope after each month, distribute it to the next month’s envelope first priorities (fixed costs). Put the cash into savings or investing accounts if those envelopes are already filled.

Resources To Kick Start Your Budget, Start Savings and Create A Rich Mindset

I remember back in the day I only memorized enough to pass the test. Then, would forget about it. However, over the years I have come to respect and understand the importance of education and awareness when it comes to strategic money decisions. And money is a topic that I constantly have to keep reading about in order for it to stay a priority in our family and keep us on the right financial path. If I don’t stay on top of it, it’s kind of like my history class. I don’t remember the details and why things are important!

Below are some of our favorite resources and tools we use to stay savvy with our financial game and motivated to keep learning. If you have any feedback or recommendations, I would love to hear from you too!

Also – if you haven’t downloaded the FREE Kindle app, you should! It can work on your PC, Mac or Phone!

​Happiness A Guide To Developing Life's Most Important Skill, image via amazon.com

Wait, what? ​"Happiness A Guide To Developing Life's Most Important Skill" isn't a finance book! No, not directly. But I believe indirectly. Happiness comes from within, not from the world. The author takes a scientific approach in explaining how unconditional happiness (peace) works. In my opinion, this helps lay the foundation for a stable mindset, one that can help you lead to stability also with your finances.

​The Next Millionaire Next Door, image via amazon.com

This is a great, modern, follow-up book to the +20 year, The Millionaire Next Door. Wealth building takes discipline and time. You can learn a lot from those who made small decisions, over and over again, to build there wealth and essentially, become a stealth millionaire next door.

How Rich People Think

​How Rich People Think, image via amazon.com

This is a very bold book with many interviews and how they think when it comes to money. It even goes as far as touching base on the mindset of middle vs. other classes of living. This is not a book that will teach you the fundamentals of how to get rich with your finances, but it will open your eyes to the thought processes of how others view money and what really sets people a part from those who succeed with their finances and those who don’t. Quite an interesting and motivational read!

​​Money Tracker Final Thoughts

​The goal of a cash envelope system is to implement disciplined spending, get ahead for the next month and keep getting ahead financially!

I know it may be hard to initially start this, “How do I put money into envelopes when I’m currently waiting for my paycheck to pay bills already stacking up?!”

But try to fill the envelopes in the fixed expenditures categories. Once it’s filled, work on filling the second set of envelopes, costs that can fluctuate. And if anything is left over, try and start filling those savings & investing envelopes!


Hi! I'm An. My husband J & I love family and friend get-togethers filled with food and fun, while saving money! We want to inspire folks to make simple lifestyle choices when it comes to holidays and events, while not missing out!


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