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Envelopes – Not Just for Mail Anymore

on May 29, 2013

(If you like this post, be sure to check out my Budgeting Series)

Envelope System
photo courtesy of https:\\

As of yesterday, my husband and I are officially graduates of Dave Ramsey’s 9-week Financial Peace University! (To see if any Financial Peace classes are offered in your area, click here) If you don’t know what Financial Peace University is, it is a class that goes through seven baby steps toward achieving peace with your finances. Dave encourages a monthly zero-based budget, which basically means that each month, all of your income, minus your expenses, should equal zero. Whatever is left after your bills are paid should go towards paying off debt or building up savings. For example, if you make $1000 a month (theoretical example, obviously, cuz who can live on only $1000 a month, am I right!? If you find them, let me know so I can copy what they’re doing!) and your expenses are $900 a month, the extra $100 should go towards your debt, such as vehicle loan or credit cards, or if you have no debt, it goes towards savings, whether for a new car, house, retirement, or whatever!

Envelope System ID-100106853photos courtesy of https:\\

Anyway, as part of the Financial Peace course, Dave encourages using the envelope system. That basically means that, for certain categories in your budget, you should use cash instead of your debit card. The idea is that you ‘feel’ it leave your hands better when it is in cash form and therefore, you will be more intentional about spending that money. Last month, my husband and I started using the envelope system for a few of our budgeted categories. The ones we chose to do this way are: Grocery, Restaurant, Car Repair, Gift, and Entertainment. The idea is that, at the beginning of the month, you withdraw all the cash that you have budgeted for each of these categories and place it into the corresponding envelopes. Then you use the cash within these envelopes for purchases that fall within these categories. The envelope system sold by Dave’s website includes envelopes that are covered in a register-type log. That way, you can keep track of what goes in and out of the envelope and ensure that the right amount of money in there. Even if you don’t use the envelope system from Dave’s site, I think it is a good idea to keep a log of the money in the envelope, just like it is a check register for a mini checking account.

For us, the envelope system has been a bit of trial and error. Our grocery and restaurant envelopes are having a bit of trouble keeping themselves to their limit. But we are slowly getting the hang of it and getting the right amount of money budgeted in there.

If you want to try the envelope system for yourself, there are a few options. You can buy them from Dave Ramsey’s official website by clicking here. Also, you can check Etsy or Ebay for unique envelope systems made by crafters out there. Some of them are pretty cute! Amazon also sells Dave Ramsey’s official envelope system. Or for a super cheap option, you can make your own out of paper (pattern courtesy of or fabric, via some great tutorials, here or here (these are not the only tutorials out there, scour the web to find one that works for you!)

Tell your money where to go

Tell your money where to go

photo courtesy of https:\\

Have you tried the envelope system? How did it work for you? Any money-saving tips or tricks for the rest of us?

P.S. If you are interested in learning more about Dave Ramsey, you can start by reading one of his many books, such as The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness


2 responses to “Envelopes – Not Just for Mail Anymore

  1. Ricki says:

    Oh how I love Dave Ramsey’s baby steps. Congratulations on completing his classes, there are not any classes in my area so I’m stuck with his books instead. I am a big believer in the envelop system, and it really does work for me. But I also struggle with my grocery budget…however most of the time I just take the extra funds from a different envelope (like my pet envelope or my gas envelope) as the they tend to have extra in them.

    • becbier says:

      I tend to do that too! It gets hard if you’re on a tight budget and food seems to be getting more and more expensive! Since you seem to go over on your grocery budget, maybe budget the extra money into that category and away from the other categories. I know it seems like all of our categories need all the money that we put towards them, but when it gets down to it, the necessities like food are the most important. Hopefully a class will open up in your area soon! Although, having read some of the books before doing the class, the class seems like a lot of repetition from the books, so I don’t think you’re missing out on too much.

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