Does anyone use "budgetting" envelopes like I've seen on TikTok?

[BernadetteRostankowskiWolowitz]

So every now and then the algorithm throws up a video where they have a set amount of cash they divvi out between categories, and they sit each month and decide where they will allocate their money.

I know it can be done by way of digital "pots" on something like Monzo, but this is cash, in envelopes.

I do like the idea, but as we move into a cashless society, I wonder how effective it actually is.

I'd love to hear if anyone does this in person and how they find it.

I've done it when I've wanted to ruthlessly budget.
It worked a treat. You just have to hope your house isn't broken into.

I wish I could have a bank with digital pots.

Impossible as most of my spending is direct debits or online. I use an app that does the same thing digitally.
Could use cash envelopes for some stuff, but it would get annoying. Probably works for young single people, but not for running a household.

Yeah I imagine if it was just me, it would be easier; but dh often buys food/days out etc without me so would need a bit of organising there.

It just looks so efficient

It’s not practical in this day and age surely? Paying for a train fare etc with cash?

My Nan used to.

I do the same sort of thing digitally with YNAB.

I can’t think doing cash pits or envelopes is at all efficient for a modern family, quite honestly. It only works if only one person is responsible for groceries, paying for things while out etc.

@megletthesecond

I've done it when I've wanted to ruthlessly budget. It worked a treat. You just have to hope your house isn't broken into.

I wish I could have a bank with digital pots.

Hyperjar is a free app I use where you can have upto 100 jars (or pots). I have jars for my dc and they get their own debit cards if it helps

It’s madness. Someone could steal the envelopes and then you’re knackered. Or you could lose them. It’s going back to the olden days when people kept cash in the house instead of safely in the bank.

I think it was quite popular in frugal/budgeting circles in the past - it’s mentioned in the Tightwad Gazette and I’ve read posts on the MSE forum where people have done it - but imagine it is becoming less popular now cash is being phased out. And it likely differs from country to country - cash is very popular in Germany and more popular in the US than here but I can’t see it existing in Sweden! I just have lots of easy access savings accounts and multiple current accounts and use them all for different pots instead.

Those who do the equivalent online, do you sit and transfer funds at regular intervals to put the money where you want it, or do you set up standing orders?

My DM has always done this, it works for her and she's probably the most organised person I know wrt money.

It probably wouldn't work in the UK. In the US hardly anyone uses direct debit and it is viewed with some suspicion, so people pay bills with cash or cheques.

I do it digitally with YNAB and it honestly changed our lives.

I transfer it all across manually on payday but I have the banking apps on my phone so it doesn’t take very long

Even in Germany all bills are paid with direct debit. Lots of people pay wish cash in shops, I don't.

With Monzo Plus you can create a virtual card for your pots, which you can then use on line or in store with Apple Pay to pay for stuff directly from your pot.

It appeals in the "ooh look how organised I can be!" Way, and involves buying stationery, but you are right - completely impractical for UK living.

I transfer all over on payday

I do a similar thing with monzo.

bonus is that if I don't have the monzo card which has food in / food out pots I can't buy stuff.
Or I have to buy and transfer ££ which is an additional step so a deterrant.
So far it's working
I'mve spent £15 less this month on mindless coffees.

@BertieBotts

It probably wouldn't work in the UK. In the US hardly anyone uses direct debit and it is viewed with some suspicion, so people pay bills with cash or cheques.

I do it digitally with YNAB and it honestly changed our lives.

I'm in the US and I've never known anyone, including my 91-year-old aunts, to pay by cheque or cash because of distrust.

I use starling as my main bank account and it allows you to transfer money into 'savings spaces'.

On payday I'll keep £xxx in the main account which is my weekly budget x4.5 for everyday spends (food travel etc) and divvy the rest up into these pots. They are easy to set up, transfer to and from and delete too.

For example this month my DH has a big birthday so I created one for that which I will delete as soon as the money has been spent.

Envelopes is exactly how I used to budget when I first lived independently. But it was a while ago. Cash is problematic now days.

My mum used to do this years ago when my dad gave her housekeeping money. She had loads of jars with labels on in one of the kitchen cupboards. Nowadays she is on her own, her pension is paid into her bank account and I have put all her bills on direct debit so she just keeps a notebook with details of her planned budgets.

My mum used to do this in the 80s. She'd have one for school dinners which she'd get me to hand into my teacher as it was paid in cash back then.

Personally I use direct debits and my bills go out 3rd-5th of the month but if I was the type to spend money simply because it wa sin my account, taking out certain bills in cash so I don't spend it would be a possible idea that I'd use

I bought one after watching people on Tiktok. However I accidentally bought two and cba sending back. I haven't used them so I'm 24 quid down 😂.

I use an app called YNAB. The money in my current account stays where it is but I only look at my budget on YNAB if I want to spend. So if I want to spend £50 on dinner out but all that's left in that category is £10 I know I need to take the money from another category (clothes for example) or go without.

I use this on Starling. I have different pots for each category. I have 'needs' such as bills, food shopping, petrol etc, one for 'wants' such as make up, takeaways (I don't put much in this one, just enough to feel like a treat each month) and an extras pot, for smaller things throughout the year, such as birthdays, MOT things like that. I transfer money into each pot every pay day, and then I put the rest away into a savings account. It's definitely helped me stick to a realistic budget