If you are struggling with your finances or living paycheck to paycheck, you may want to consider using the cash envelope system as your spending strategy solution. This involves a proven method whereby you simply figure out how much money from your wages is coming in and how much is going out, and by making adjustments from one paycheck to the next through careful planning and spending.

There is nothing embarrassing or anything to feel ashamed about if you cant seem to get your finances in order. After all, almost 75% of the worlds population are in the same boat as you!

However, the last thing you need is to give up by sitting down in a corner, placing your hands on your head, and feeling helpless because your money problems have gotten the best of you. You can stand up for yourself right now, make a change, and focus on a proven method that will help you take charge of your finances almost immediately!

Here’s how to make the cash envelope system work for you, step-by-step:

  1. Figure out your monthly expenses and subtract that total from your monthly salary. If you have money left over, it means you’re in a good position to save that remaining amount and all you need is to know exactly where your money is going. If your expenses total more than your salary, this means you are either going to have to cut your expenses, find supplemental income, or both.
  2. Make a plan by working out which expenses you will pay after the first two weeks and the ones you will pay after the next four weeks. Pay close attention to past due dates so you can avoid late fees.
  3. Get a separate envelope or self locking plastic bag for each of your monthly expenses and label them accordingly. Basic monthly expenses include rent or mortgage, transportation, household (gas, water, electricity, etc.), essentials (groceries, clothing, child care, etc.), and lifestyle. Leave no stone unturned and do not leave any expense out of the picture by taking your time and getting it right the first time.
  4. Write the monthly amount of each expense on the corresponding envelope with a marker or pen.
  5. When you collect your paycheck, withdraw the total amount of your expenses for the first two weeks and place the corresponding amounts of money in each of your envelopes which have been earmarked for the first two weeks. The money you have left over should remain untouched and placed in a savings account or if you prefer, a safe hiding place in your home.
  6. Repeat this process, socking away all the leftover money as if your life depended on it! Within a couple of months, you should already see drastic improvement in your finances.

Even if you save a modest amount of only $20 dollars a week with the cash envelope system, over the course of one year, you will have saved $1,040 dollars. Now, that’s progress!


Using cash for all your purchases and organizing it in an envelope system makes your money tangible, as opposed to just being numbers in a bank account, and therefore harder to spend irresponsibly.

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