5 Reasons We Don’t Use The Envelope System

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If you are in the “budgeting world” at all you know about the “envelope system”. It was created by Dave Ramesy and is a wonderful system for helping people spend their money wisely. Now, before I move forward with this post let me explain that I have nothing but love for that sassy Dave.

I think he is a smart, financial savvy, God fearing man who I respect so much! This post is simply stating the reasons my husband and I don’t use the envelope system and how my approach to spending money is a little different. We tried the envelope system for a few months but it ended up not working for us. This post is for those that want to know why a budgeting blog like me doesn’t follow the main budgeter himself, so I thought I’d give some insight. But again, mad respect for Dave and all that he helps! :)

Now that we got that out of the way, let me explain.

5 Reasons We Don’t Use The Envelope System

1. We don’t (and you don’t either) need to spend money in every category each month.

Using the envelope system you have an envelope for each category of spending, and there can be a lot of different categories. Beyond the basics like gas and food there is pet care, gifts, car repairs and even Christmas.

The point is that you are putting money into this envelope every month and if you don’t spend it, (which for some like Christmas the point is to not spend it) it is saved for that category for another month.

I think this idea is great and for someone doing a complete overhaul of their spending it could work, but the problem Greg and I have is that it starts to train your mind to think about spending in that category every month.

As you know I am not about spending money unnecessarily and having an envelope with a title on it and money in it is pretty much a green light to buy for that category. We don’t need to spend money every month in each category and I don’t want an envelope telling me I could.


2. We have a minimal spending budget.

Beyond not wanting to be tempted to spend in each category we also have very minimal categories to begin with. I think we have maybe four or five categories of spending that we could technically have envelopes for. Food, gas, household supplies and my own personal budget would be the only real envelopes we would need.

We keep it so simple in our budget we don’t need to have multiple envelopes to juggle all of our spending.

3. All our “extra” is kept in savings.

All our money that is unspent is kept in savings and we are able to keep track of exactly what we have. Keeping excess in envelopes seemed a little stressful to me. Either it’s in my purse always which I’d be worried about or it’s left at home at which point I couldn’t always easily check what our balance was.

We like being able to easily see what’s in our bank account and how our savings is growing. I know that part of the reason he does it this way is so that you are not having to “dip into your savings” for different categories as the needs come up but I’m much happier having a cushioned bank account ready for anything than having it all divided into categories!


4. We are not always together.

One of the biggest reasons we don’t use the envelope system is because of the inconvenience of it. Greg and I are not always shopping together. It was hard to try and predict who was going to the store and when in order to make sure that person had the envelope. We were trying to juggle the cash, envelopes and receipts and it became a pain.

Now we use the app Mint and do everything on our card that earns us points. Plus Greg and I can easily log on to the app and check our budgets and where we are at before one of us continues our shopping. It’s made it so much easier! I also wrote a whole post on it here.


5. We couldn’t earn points.

Recently Greg and I have been trying to earn credit so we can buy a house. In doing that we had to get credit cards, we wanted to “work the system” and get more bang for our buck so we looked into a card that gave us the best bonuses. We got the CHASE CARD and through the first time customer bonus was able to earn a free trip. Now we’ve switched over to THIS CARD that is free to have and earns us points as well.

When we use the envelope system you use cash only. (That is kind of Dave’s whole thing.) So of course we can’t use our card and we can’t earn points. Let me tell you, we like earning points for spending money you would have already spent.

If credit cards are too hard for you to handle I don’t advise them, but if you are one of those that can handle them, (Aka. Only spend money you already have in your bank account and then pay them off at the end of that shopping day.) then make them worth your while and start earning points.

I hope this just gives you another perspective on different ways to be financially savvy and budget. There is no right or wrong way. Only what works best for you and your money!

Talk soon!