Do you remember when I featured my guide to being on a budget? One of the things I explained was how to create an envelope system for your different spending categories so you can use cash only and track where every dollar goes. I've been using that system for years now and it has been working like a charm! I find that every time I open my cash envelope system at a store, the cashier always tells me what a great idea it is and asks me how I did it. Thanks to all those compliments and questions, I decided to put together a post showing off how I made my envelope system. Enjoy!
There are plastic coupon organizers that you can use as your wallet, but I, being the Filofax addict that I am, decided to purchase a personal size Filofax. I chose the Ikat Temperly. I love the color and I figure the more beautiful my wallet is, the more likely I am to use it and stick to my envelope system. If you can't get a Filofax you can just use the plastic coupon organizers/Mini Expanding files from Target, Walmart, etc. You can find a Filofax Temperly You can find cheaper small expanding organizers You can find zip envelopes
The next thing I did was purchase clear zipper pouches from Day Runner (here). Any brand or type will work as long as they aren't too bulky. I like these because the zipper is simple and flat like on a ziploc bag.
I used a label maker to put a simple label on each envelope. My envelope categories are: Groceries
Dogs
Fun
Restaurant
Misc
Car
Medical
Clothing
Vet
You can get creative and use washi tape too!
In the back of my Filofax I keep a little note that has the amounts I should take out with each paycheck, and which envelope to put them in.
Then I keep my little keychain rewards cards in a little plastic envelope that has a slot for each one. You can find something like this on ebay or Amazon.
There are 2 card pockets in the front of my Filofax and a change pouch. I keep my gift cards, regular size store reward cards, and my keychain ones in these pockets. Also in the second opening I keep my coupons so that they are all there together for whenever I'm at the grocery store.
There's one more pocket right before you get to the envelopes and it's where I keep my cash register cards to track where my money goes. I made some in Word and Excel which is what you can do simply by copying my layout but you can also search the internet for them on other blogs like this one.
I keep my debit card in my other Filofax along with my Drivers License. That Filofax is my main one that I keep my calendar, to do lists, and other info in. Q: What do you do with any cash that's left in a category at the end of the month? Others will take the extra and distribute it into other categories. And other people use what's left in a specific category to act as the next deposit. That way you take out less cash on your next payday. Q: What if you are short in a category and need the money for an emergency? Option 1 is to use that $50 and then take another $50 from your emergency savings fund (see Option 2 is to use what's left in another category (like the Car fund) to pay the difference and then they make sure that from their next paycheck they put the money back. Q: What happens if my envelopes get too full? Well, I hope this post was helpful and if you have any questions let me know! Pssttt.... did you know I published a book all about this stuff? Check it out on Amazon for just $11.99!
A: It's all up to you. Some people roll it over into the next month (I do this so it acts as a mini savings fund for each category).
A: I'll use the example of the Vet fund. Say that one of my chihuahuas gets sick and needs an emergency vet check up. The bill ends up being $100 but I only have $50 in my Vet fund. There are 2 options.
A: Just take the cash out and put them into paper envelopes that go in a safe in your home. This way you don't have to worry if your purse gets stolen and you won't have such a stuffed envelope system.
Be sure to join my Facebook group, Fixing Your Finances, to help you with your finance journey along the way.
