This post contains affiliate links. At Returns Rinse Repeat, we want out readers to be financially successful, so any reviews are honest and unbiased. Learn more here.
What is the Cash Envelope Wallet System?
Budgeting can be difficult. While we do our best to limit our spending in certain categories, it can be hard to actually limit ourselves when we are swiping a credit card for every purchase. The Cash Envelope Wallet System was created by Dave Ramsey as a way to ensure you stick to your budget through the utilization of cash only for purchasing.
How does it work?
When you are creating your budget, you will usually come up with common categories such as groceries, eating out, clothing, etc. You will then assign a certain spending limit in that category based on how much you are trying to save. With the cash envelope wallet system, you will turn those discretionary budget categories into actual envelopes. In each envelope, put your monthly allotment of cash into it at the start of each month. For example, if you are budgeting $100 for clothes you would create an envelope for “clothes” and put $100 in. Throughout the month, if you wish to purchase any clothes you would pay for them out of the “clothes” envelope. Once you have used up your $100, you cannot buy anymore clothes that month.
The Cash Envelope Wallet System is so effective because it helps drive conscious spending and makes going over budget a much more conscious decision.
Many people start out by doing a basic envelope system with white envelopes. Just make sure that your envelopes are secured on your person to risk them being taken or lost. If you are looking for a more secure way to use the cash envelope system, check out the best cash envelope system wallets below to figure out which will work best for you.
What to look for in an envelope system wallet
- Number of categories- make sure the wallet you are purchasing has enough space for the number of categories you will regularly need.
- Functionality- the wallet you choose needs to also have the basic functions of a normal wallet like slots for credit cards and your ID.
- Size- if you want to purchase a wallet with 20 categories, it is probably going to be a fairly large size. Research the different types to choose a balance between categories and size.
- Bonus- Appearance! This is definitely not a must, but there are many nice-looking wallets to choose from at affordable prices.
The 5 Best Envelope System Wallets
This wallet comes with 12 envelopes and budget sheets with a small binder section that holds the envelopes. It also has 12 card slots, a zipper pocket, and a place for your coupons. The All-in-One Cash Envelopes Wallet is great for someone looking to have a thorough cash envelope wallet all-in-one.
2. Budget Planner Organizer Wallet – 12 Plastic Tabbed Cash Envelopes, RFID Block Cash Envelope System Wallet, Coupon Organizer, Monthly Bill Organizer with Pockets, Budget Envelopes Monthly Bill Planner
The Budget Planner Organizer Wallet comes with 12 plastic budget envelopes (with fun designs for personalizing) and 12 budget tracking sheets. The design of the wallet looks similar to a filing system and should make categorizing fun and simple. This wallet also includes normal wallet functionality of card slots, pen loop, and coupon pocket.
3. Cash Envelope System Wallet, All-in-One Cash Envelop Wallet with 24 Waterproof Money Budget Envelopes & 24 Budget Sheets & 24 Labels & 1 Marker, Envelope System for Cash Budgeting, Saving Money
If you are looking for variety and optionality, this wallet may be fore you. It comes with 24 unique designs to help categorize your budget. While many wallets feature more of a filing system, this wallet features more of an actual envelope system with budgeting sheets included.
If you are looking for a smaller, more concise wallet for your cash envelope system then take a look at the Bella Taylor Wallet. Instead of featuring detached filing/envelopes for storing money, this wallet has built in compartments for your cash. It features 8 slots for cash storage, as well as 6 card slots, 2 window ID slots, and additional storage.
5. Clever Fox Cash Envelopes for Budget System – Money Envelopes for Budgeting and Saving, 12 Pack of Assorted Colors, Tear and Water Resistant, Includes Carry Pouch & 12 Expense Tracking Budget Sheets
If you prefer to not have your wallet act as your envelope system holder, then you can also purchase envelopes to carry in your purse or other carrier. Check out these Clever Fox Cash Envelopes that are perfect for creating and tracking your budgeting progress. It comes with 12 different envelopes, 12 budget sheets, and a carry pouch for the envelopes.
Where to begin with a Cash Envelope System Wallet…
How to choose your categories
When choosing the categories for your envelope system, you will want to start with your base budget and choose the categories that are discretionary. Certain categories are non-negotiable, such as your rent and insurance payments. It is important to set aside cash for those categories but there is no need to carry around that cash as you will pay those bills at pre-determined times.
Choose categories that you typically overspend. This could be clothing, electronics, alcoholic beverages, eating out, etc.
Success with the Cash Envelope System
You will better track your spending
By purchasing a cash envelope system wallet, you will inherently do a better job of tracking your spending. By being forced to budget out tangible dollars, you will have a better idea of where your money is going with each transaction. Many of these wallets also include budget sheets to help you track your spending too.
By being forced to pay for items out of designated envelopes, you will be more conscious of what you are spending your money on. If you use up your $100 clothing budget in the first 3 days of the month, it can open your eyes to just how much you are actually spending.
The Cash Envelope System is a great way to better understand and control your spending. It can help you take your first steps towards sticking to a budget and tackling debt. Research and choose the best method for you.