Does anyone use the cash envelope system?

[blackheartsgirl]

How do you find it? Has it helped you budget better?

I'm on my second month and it has helped me a lot to not overspend on things like food and I love allthe separate plastic envelopes with separate things for food, gas and electric (I'm prepayment) etc

No but I want to start! Watching for tips!

Yes, but I don't use physical envelopes and cash, but have lots of different virtual envelopes on my starling account. I learnt it from YNAB tutorials years ago and it has stuck - really helpful and prevents us getting to the end of the month with no money for essentials, eg. Groceries

I use the modern version.Monzo pots.Very useful.

I also do the virtual pots on Starling. So for example this month I knew that I had a few nights out and a haircut booked so I set up pots for each as soon as I got paid and then added what I thought each would cost be so that money was out of my account.

I also use these to save for things like Christmas presents or holidays

I do it virtually, tracking every penny spent. It's good for making you accountable. Completely mindful spending.

I tried it a couple of times.

I tried the physical cash envelope but I found that I would forget to take it with me for groceries and when I did I ended up with an envelope full of change! Hated that. Also- apart from my groceries and petrol all my other expenses were paid online.

So then I tried separate accounts for different bills. This worked better. Except I only have a debit card for my main current account so I kept having to transfer the money into my current account for the expense and sometimes I would be out and want to buy something unplanned and have to faff around with my banking app whilst standing in the queue trying to work out to the penny how much my items would come to. It was just far too inconvenient.

So now I have a bill account where I transfer the same amount every month to cover all my bills.

A groceries + petrol account that I got a debit card for

And then a disposable spends account with a debit card.

I've used the system for a few years now, but only for things I'm saving up for, not for everyday expenses. It works well for me.

The only 'difficulties' I've come across is having to pay the money into the bank for online purchases - it's a faff.

No. However, we have a spreadsheet that tracks everything. I also have an account with the Co-Op bank where our sundries money goes. It’s really helpful having a couple of hundred a month that’s completely separate and not really allocated to anything that can be dipped into if necessary.

I also can't be arsed with all paying money back into the bank for online purchase, it seems a bit pointless to me so I tend to leave a little bit in the bank for that. Quite a lot of my bills etc are still paid online but I found I tend to over spend on food, and personal spends etc so I work out how much I'm likely to spend, draw that out and use that to live on.

I think you tweak it to how you want. The virtual money pots are a good idea. I've done that before but I still was tempted. Having hard cash fore really makes me think

I’ve used it several times in the past when I’ve been really skint or trying to save as much as I could. I’ve done the actual envelopes, I found that seeing the cash made me much more aware of what I was spending/saving. If I wanted to make an impulse buy it was harder, as I’d have to walk away, go back home, collect extra cash from an envelope…by that time the impulse had often vanished and I was extra chuffed at the money I’d saved!