On Using The Envelope System

Food Envelope

Two months ago, Jared and I started using the envelope system to monitor our monthly spending.

Well, actually, two months ago I accidentally locked all of my money into a safe.

But as soon as Jared came home with the spare key, we started using the envelope system.  Basically, I sit down at the beginning of each month look at how much money we have and where it will get spent.  While most of our bills are paid online from our checking account, we have switched over to using cash for everything else.  Groceries, gas, doctor’s visits and other daily spending comes out of little white envelopes with handwritten labels.

It’s been just two months, but already our family habits have changed dramatically.

For one thing, Jared seems to have learned that gas station food is not free.  Items that cost under $5 are not basically the same as nothing. That realization alone is probably saving us a few hundred dollars every month.

Jared has also started playing a little game called “Let’s See How Little We Can Spend On Groceries”.  As a naturally cheap person, I am a big fan of this game and I think it’s sexy when a man uses coupons.  I also think it’s sexy when he carries in the groceries that he spent an hour shopping for and announces “HA HA! Guess who just got a week’s worth of groceries for $93!?”

I am not, however, a fan of Jared’s version of Indian food.  While I appreciate that legumes are both inexpensive and nutritious, I do not appreciate the massive amounts of chili powder and cumin that are being fed to me in the name of saving a buck.

Jared isn’t the only one, of course, who has been affected by the envelope the system.  The kids now get a weekly allowance – a practice we have always meant to do but usually forget to keep up with.  The beauty of an allowance is that I no longer have to explain why they cannot have the $18 inflatable whale from SeaWorld.  They cannot have the $18 inflatable whale from SeaWorld not because I am an evil mom, but because they already spent their last dollar on face painting, despite the fact that I warned them they were spending money on facepaint that would be sweated off within the hour.  And that is not my problem. Allowances are awesome.

Also awesome?  The fact that my son seems to have inherited my cheap gene.  While his sister was busy getting her face painted again, Devin was figuring out how much money he could save by his 18th birthday if he didn’t spend any of his allowance.  Ever.  At this rate, I won’t have to spend a dime helping him through college.

And then there is me.  I have, unfortunately, mostly lost the mindless bliss that comes from swiping a magic card in exchange for a beautiful new pair of boots.  Even though my official shopping ban has ended, I still haven’t bought much of anything in the last two months.  While that might be wise from a financial stand point, I’d be lying if I said I didn’t have dreams about those perfect gray ankle boots I put back at Target 22 days ago.  They were so perfect. But I just couldn’t justify spending $30 from the Britt’s Spending Money envelope when my closet is already overflowing with shoes.

On the plus side?  I came home from Las Vegas with over $200 left in my envelope.

I’m still trying to find the balance between saving money and enjoying life.  My goal, after all, is not to never spend money.  I just want to avoid mindless spending.  I want to make conscious decisions about the things I’m exchanging my time for – because in the end, that’s what spending money comes down to.  I want to be able to say with confidence that, yes, this day at EPCOT was worth the 4 hours of work I had to do to earn the money to pay for it.  Or, no, this t-shirt that will shrink the first time I wash it is not worth giving up 30 minutes of my life.

While I’m still adjusting to life as a conscientious spender, so far the envelope system has been a success.

Now I just need to track down a few vegetarian recipes that don’t call for chili powder.

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  1. ItsToni says:

    Squeeee!! This makes me so happy!!! You won’t believe how much “frugal living” will enrich your life. I know it sounds silly…but it does. :)

  2. Lisa says:

    I have been wanting to try this system but I’m lazy. I think the fact that Jared has discovered that gas station food isn’t free just pushed me over the edge. My husband is the same way and it drives me crazy. If he could see what he’s spending it would be a big help.

    • Miss Britt says:

      a) Thanks for tolerating disqus. :-)

      b) Yeah, I absolutely pushed this because of Jared’s wasteful habits. I am
      kind of embarrassed at how much I’ve ended up saving.

  3. That is kinda an awesome thing, and I might have to get details on particulars when I move just so I can start to implement it!

  4. JustMalia says:

    I was going to try and direct you to a few bean recipes that don’t have chili powder or cumin in them but then I realized that all the recipes I use have one or both. Never really thought about it that way. Now I need to find some that don’t because that may explain why I’m really tired of all my bean recipes. Maybe something that uses coriander? Gotta love those “c” spices. Heh.

  5. Finn says:

    I’m so glad this is working out for you. I’m tempted to try it, at least in a modified form.

  6. Your envelope system has been working for me, too! (Except, of course, you have to get paid in the first place to be able to put money in the envelopes… Sigh.)

    This is definitely a good idea, and I’m glad it’s been working for you!

    • Miss Britt says:

      Oh, honey, don’t I know it. One reason we had to do this was because
      neither mine nor Jared’s incomes are fixed anymore. We needed to find a way
      to figure out how much we had to save on good months… and how to cover the
      bills on less than good months. :-)

  7. i’ve been seriously considering the envelope system. glad to hear it is a success!
    also, please know that you are loved. A LOT. stupid disqus shit.

  8. Anonymous says:

    I’m the queen of cheap shopping. LOL I always stack coupons with sales. My roommate and I usually save as much as we spend, especially at CVS where we’re always buying things with the extra care bucks.

    Good job on the saving. =) Do you have a mad money envelope? Try putting like $5 a month in one and then if you find those boots again, you can use that money.

    • Miss Britt says:

      I have a “Britt spending money” envelope, which I guess is basically that -
      and that’s what the boots would have come out of, but I find myself a little
      scared that I’m going to need it for something else even better in the
      future and then what?!?! Heh.

      • Wendy says:

        Ahhhhhh. The wonders of using cash. I’ve found it’s a lot harder to spend when it’s in cash. Swiping the card? Even he check card? LOVE IT. Cash? Not so much. Would rather save it for “maybe there is something better around the corner and I won’t have any money for it!”

  9. Avitable says:

    I need to learn the meaning of this word “frugal” and sometime soon.

  10. I’m not using an envelope system, but I am watching like a hawk every dollar I spend. It works, because I put more things back thinking DO I REALLY NEED THIS?

    And the answer is usually NO.

  11. Faiqa says:

    I’m thinking about suing Jared for defaming Indian food. How much exactly does he have in his “legal expenses” envelope?

  12. Miss Britt says:

    I used to spend cash when it was rare that I had it. Definitely have to do
    whatever works for you!

  13. Mammaloves says:

    I love that you’re doing this. I should. I know I should. But…but…

    Where did I put those damn envelopes?!

  14. Procrastamom says:

    We’ve been doing this for about a year now and it’s definitely helped us pay down debt faster, save more and make better decisions about what to spend our money on. We also have an adult allowance category and I find myself putting things back frequently, because I don’t want to see my own cash disappear too quickly. If I find something I really love, I’ll write it down in my notebook and go back for it at the end of the month if I have enough money left. Funny, I haven’t gone back for many items even though I’ve had the money for them. I guess maybe it’s curbing the instant gratification urge. Oh, and we’re paying for Christmas with CASH this year (for the first time ever…sad), so hooray for small wins.

    Congrats on this working well for you Britt. It will make your travel dreams so much easier to make happen.

  15. I need you to come set this up for me.

    Wait, I don’t want you to think lesser of me for the state of my current financials, so I take that back.

    • Miss Britt says:

      I would happily help you with this if you wanted. And I wouldn’t think
      less of you. Didn’t I tell you about what happened to Jared and I when
      we first started making money? Yeah.

  16. Amy Ritchie says:

    I used to do this when we had budgeting problems. It worked brilliantly. (I thought I invented it though, so I’m a little crushed knowing that my idea was not as original as I thought.) Now thankfully we’re a little more comfortable, after selling our too-expensive house and renting again, and I’ve sort of stopped doing the envelope system. I’ve gone back to swiping everything without thought. But your post has inspired me! I’m going to the bank today and taking out our weekly spending money! Thanks!!

  17. Christina M. says:

    This is flipping brilliant — as in, I think this might be something that could really work for my husband and I. Successfully.


  18. [...] This post was mentioned on Twitter by Miss Britt, kitchenMage. kitchenMage said: PSA for the guys "…it’s sexy when he carries in the groceries that he spent an hour shopping for…" http://bit.ly/ci03zZ @missbritt [...]

  19. Thats a really neat idea, I am so used to online banking now though I dunno if I could do this

  20. muskrat says:

    Do y’all have a “blow” money envelope for each of you? You’re supposed to, you know. It helps with the “saving money but not refraining from having a life” part.

    Proud of y’all.

    We were doing this before I started making 2-3 times my old income, but I think we need to do it again. It’s smart. And, it helps facilitate successful goal setting and meeting. And for us, it could facilitate moving out even without a buyer!

  21. Anonymous says:

    I’m always nervous I’ll lose the cash. But I know a few people who have been doing this and swear by it. Im considering doing it.

  22. Watch that son of yours, he’s onto something. My son bought himself a car last year having saved every penny of his allowance and part time jobs he had since 16. (We only get drivers licenses at 18 here).

  23. Poppy says:

    Ok, listen to me:

    corn tortillas
    black beans, drained and cooked on the stove
    grean, red, yellow, orange bell peppers sauteed
    onion, sauteed
    cheddar, shredded
    light sour cream

    make homemade salsa in a separate bowl:
    plum tomatoes, diced
    shallots, diced
    garlic cloves, peeled and pressed
    key limes, freshly juiced/squeezed
    a pinch of salt

    Chop up serrano chiles and put them in their own bowl on the side for anyone who likes it HOT.


    You’re welcome.

    If you need quantities I will gladly guesstimate in email for you.

  24. MarinkaNYC says:

    My husband is shocked by how cheap I can be. The balance between frugality and enjoying life is an art form.

  25. Linda says:

    Have you checked out any of the money saving blogs? I love moneysavingmom.com but there are lots of others too – commonsensewithmoney.com, dealseekingmom.com. They post great deals and links to printable coupons.

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