Cash envelope system free printable

The Ultimate Quick Start Cash Envelope System + Free Printable

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When I became a mom at 18, I quickly learned how important it was to manage my budget. It was then that I learned about Dave Ramsey – I bought everything he offered, and failed. Miserably.

I was still overdrafting my account every single paycheck – for years. I’m not talking just a little slip up here or there – I’m talking $600+ overdrawn every single time. My finances were a mess, and ironically, I went and got my securities licenses and became a financial advisor.

However, I was still broke. Still overdrawn. Worse yet, my house was a mess because I was buying lots of stuff I didn’t need. And when I couldn’t find the stuff I bought, I’d just buy a new one.

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This really messed with my mental health – I was miserable, depressed, anxious, and suicidal. Any time I got a windfall (a large, unexpected amount of money), it was spent as fast as it was received. I was drowning in debt, surrounded by mess, and literally dying on the inside.

I want to say that after my suicide attempt in 2011, things got better, but they didn’t. It wasn’t until just a couple of years ago that I really got things under control. Sure, I slipped up plenty of times, and still do sometimes, but my financial situation now is remarkably different today than it was over ten years ago.

So, what changed? Why is my financial situation now so much better?

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There are several reasons why my financial situation is much better than it used to be:

  • I make considerably more money than I used to
  • I budget for fun, travel, and luxury, rather than taking a peek at my account balance and spending what I had available
  • I track every single penny coming in and going out
  • I use budget envelopes — re-budgeting and filling these twice per month

I tried the cash envelope system many times before, but it took figuring out my entire budget to stick with it.

If you need help figuring out your budget, I suggest checking out YNAB, which is You Need a Budget. You can access it on the computer, and there’s also an app. You can get a free month here. Once you work out your budget, then you can tackle the budget envelope system to help you keep on track.

Don’t let analysis paralysis stop you, though! As a business coach, I see people wait years to do things they’ve been meaning to do…all because they don’t have all the answers right away. I don’t know about you, but I sure don’t have all the answers to anything.

Be honest with yourself – done is better than perfect.

This might mean you need to rip off that bandaid and get a real, hard, long look at your financial situation:

  • Open all your bills
  • Open all your collection letters
  • Check out your free credit report (one is fine – this way you can do it three times per year) and dispute anything that’s incorrect
  • Look at the last six months of statements to figure out where your money is going
  • Are you paying for things you’re not using? Cancel those!
  • Have your mini pity party for a few minutes, then put your game face on! Let’s tackle that debt and get in control of your spending!

Why use a cash envelope system?

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It’s easy to spend money when you can’t actually see it. When you have to touch each dollar as it is spent, you’re less likely to overspend. It took me about 90 days to actually get in the habit of using the envelopes instead of simply swiping my debit card.

A lot of people allow their fear to control them. They don’t face the reality of their situation, ignore the bills, and don’t even look at bank account transactions – save for checking to see how much they can spend based on what the “available balance” shows.

I know what it’s like to live in fear of swiping my debit card at the grocery store, even for something as little as a 1/2 gallon of milk. This takes the anxiety out of it: I know exactly how much money I have available to spend.

Quick Start Cash Envelope System, step-by-step:

1. Figure out your envelope categories

If you didn’t go through your last six months of statements to figure out where your money goes, do this now. This will tell you which categories to use. Here are some ideas:

  • groceries
  • miscellaneous
  • restaurants
  • pet
  • utilities
  • travel
  • child care
  • fun/entertainment
  • sinking funds (one for each planned expense)
  • gas
  • beauty
  • clothes

What’s a sinking fund?

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A sinking fund is not an “emergency” fund, but something I know is coming down the road that I need to budget for. Instead of all of a sudden needing to drop over $1,000 in a month when my property taxes come due, I can set aside $83.33 into my sinking fund each month.

I’ve got sinking funds for several things:

  • property taxes
  • mortgage insurance (we pay annually so that we can take advantage of a pay-in-full discount)
  • Christmas
  • home repairs (currently my biggest sinking fund – we flooded four times in September and need to fix a lot of things!)
  • birthdays
  • large family vacations (anything costing us more than $5,000 or so – I budget for monthly family travel in our regular budget)
  • new-to-us vehicle (we LOVE our Jeep, but it’s got 160,000 miles! We know it’ll need to be replaced in the near future)

I keep an envelope for each sinking fund so that I know exactly what to spend and for what. If I just put money into an account, or just one envelope, it’s easy to spend the money without intention.

2. Get cash

Some people go to the ATM to get cash for the envelopes, but I prefer to go to the bank. By going to the bank, I can tell them exactly what I need. Let’s say that I’ve got four envelopes I need to fill:

  • gas ($85)
  • groceries ($200)
  • miscellaneous ($50)
  • entertainment ($75)

For my gas category, I’m probably going to ask for a $50, a $20, a $10, and a $5. Groceries, I usually ask for it all in 20’s. For miscellaneous, I ask for ten $5’s since I don’t know what I’m spending it on! And for entertainment, three $20’s, a $10, and a $5.

A lot of banks and credit unions will have an actual withdrawal slip you can fill out. If you’re looking for a new bank, I suggest Capital One – here’s a link to get a $25 bonus for opening a checking or savings account with them.

So that I don’t have to remember what I need to ask for each time I fill out a withdrawal slip, I take a picture of it and save it as a favorite in my phone. This way I can just fill it out based on the photo of my past withdrawal slip.

What happens if I don’t spend all the money in an envelope for the month?

If I have anything left over in an envelope at the end of the month, I can choose to “roll it over” into the next month’s envelope. Otherwise, I can choose to put it into a “sinking funds” envelope.

I’ve run out of money in an envelope and still have a lot of time left before I can refill it! Help!

Changing our spending habits can take time, so don’t freak out. You can “borrow” from another envelope – like your miscellaneous one…otherwise, you can figure out a way to make money quickly so that you’re not borrowing from another envelope (such as by selling something on the Facebook marketplace).

See how simple this was? Don’t beat yourself up if you slip up. Have your mini pity party then get back up in the saddle.

And if you don’t have your own cash envelope system, you can download these envelopes I created just for you – FREE!

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