If I Have Cash, I’ll Spend It

When I talk to about the envelope system, most people argue that “If I have cash, I’ll spend it”. In reality, if you only have a certain amount of money in cash to spend over a specific time period, you’ll ration your money more. You have to have a plan in order for the envelope system to work.

Cash Envelope

How to use the envelope system:

  1. Use your budget to determine how much spending money you are able to give yourself per pay period.
  2. After you get paid, take out that allotted amount of money from the ATM.
  3. Put it in your envelope.
  4. Spend on whatever you want throughout the next two weeks (or until you get paid next)!

Benefits of using the envelope system:

  • It helps you prioritize. Spontaneous Chipotle visits seem less important when you only have $50 to spend for the week!
  • It allows you to spend money guilt-free on a variety of activities. I feel zero amount of stress paying for happy hour or a nice dinner knowing that I have money set aside for those occasions.
  • It keeps you from over-spending on restaurants and bars. Instead of opening a tab, mindlessly buying drinks all night, and waking up in regret, you (aka your envelope) decides how much you spend (and drink).

Cash EnvelopeFor more information on starting a personal budget, check out our Getting Started tab at the top of the page.

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