Using the Cash Envelope System in a Digital Age + How I Do It

Keeping grocery money in the cupboard. Saving for holiday gifts in your sock drawer. Though we may not have always been using envelopes, the cash envelope budgeting system is one that has easily stood the test of time. Learn how to utilize the tried and true system for yourself, whether using paper envelopes or the modern day budgeting app You Need a Budget.

0:00 The Foundation of the Cash Envelope System
0:45 Step 1: Determine Your Needs
2:10 Step 2: Withdraw from the Bank
2:41 Step 3: Stuff Envelopes and Spend Within Their Boundaries
3:11 Step 4: Reload the Envelopes with Each New Month
3:35 Step 5: Repeat!
3:51 Why It Works
4:16 Make Your Cash Envelope System Digital
6:34 Learn More About "You Need a Budget"

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[kiiabby]

I am loving YNAB so far. Didn't get paid this month (joys of clients dodgy invoicing system!) and YNAB has turned what would have been an awful, stressful month burning through my emergency fund into something so much easier to deal with. Even when my car had to get towed to a garage, I might have been stressed, but it wasn't because of a lack of visibility of my budget. And it felt so refreshing to not be worrying about the repair costs I knew were heading my way... Kind of unnerving actually! I've spent my life stressed about money regardless of income - I'm often a very avoidant person when it comes to finances - like boxes of unopened post in my 20s kind of avoidant - so this feels amazing. Absolutely worth the yearly fee!

[marykaykeller]

It worked for me and then I found YNAB so it was a natural transition. I used the envelopes when I was a single mom too. My kids learned when the $$$ was gone we did not debt. 🌹

[joshuastewart]

This concept is how I use YNAB. Each month I budget the money I received in the previous month for the next month. While I don’t withdraw cash & use an envelope, this is how I think of my categories in YNAB.

[rebekahyoungers]

Great video! I use YNAB but I still use some cash envelopes, too. For example, I have an envelope in the glove compartment of each car for gas money, partly because our local gas station gives a 20 cents/gallon discount for paying cash, and also for emergencies. Case in point: I once forgot my wallet and didn't notice until the gas light came on and I was still 15 miles away from home! I also use cash envelopes for part of my personal care and restaurant budgets, as I prefer to tip my hairdresser and servers in cash. But for all of these categories, I have both my category in YNAB, and my envelopes, and I just split the cash withdrawal in YNAB and track that cash as already spent when it goes into the envelope. That way I can keep part of my cash digital and part of it in actual cash.

[daftoptimist]

I’m gonna give this a shot. YNAB has been the magic feather for my finances, but I think it all being digital gives me too much leeway to be loosey-goosey about stealing from my priority categories to cover overspending elsewhere. Maybe having the physical limitations on a select few trouble categories for a while will help me rein it in.

[MrsThollo]

I wanted to embrace this but looking at the app screen made me realize I am much too lazy (or old) to go digital with my budget. Cash envelopes was never as difficult as ppl make it seem now. Just pull some cash out at home and update the total at home - NOT in the checkout line. Don't take $1000 to buy a TV if you're scared of being robbed. Use your debit card and either deposit the money back or, if leave it in your account to begin with since it should already be budgeted for.

[Annoyinartist]

I love YNAB i really do but something that I noticed just in my behvior psychologically it is more painful to use cash because you can physically see it. Ynab is great but it does not really help with over spending the same way as rve envelope system.

[dpayne]

For those that chose to use cash envelopes (my sister is a devotee), to avoid wasting envelopes you could use the back of the envelope to track the spending/balance and thus reuse the envelopes for at least 6 months.

[rogerhoward]

I was kindof hoping for some guidance to use cash envelopes, and track it in YNAB to start. Any tips?

[candiecton]

I have used YNAB for years but every day get lazy and just swipe my card and end up screwing upself. I cannot for the life of me figure out how to make it a priority to type in my transactions every time I make a purchase. I'm debating going back to cash because cash feels more valuable then my debit card. I don't spend as much with cash.

[Jodie_M]

Hannah - Do you have a video on how to use the loan planner?

[sandiholland]

I love the concept but the monthly cost for the app puts it out of my budget for now. Once my 34 day trial is over I will have to switch to an actual envelop system. The pricing that ended last year could have been doable for me but not the $14.99 since that is half of a savings item I need for my future items like car registration or my emergency funds.

[countpythagoras]

So, the envelopes is something like a budget, right?

[dpayne]

Missing the bloopers at the end (Sigh!)

[trapperma]

You said there was pain noticed if using actual cash, I think. Then you ignore that when you recommend YNAB and further mention how convenient it is to overspend by moving digital budgeted categories/envelopes. Ugh!

[tylernol]

I'm gonna miss YNAB. Was a customer for years... but at $15 a month, NO THANK YOU! Love you guys, gonna miss you.