Make every dollar count with the Cash Envelope system – FWS002

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Coach Greg Profile Pic2 (no bkgrnd)Coach Greg joins us to share a secret: If you want your cash to last longer and make every dollar count, use the Cash Envelope System.

He should know – he and his wife have been using cash envelopes for years.

Why is cash better than a debit or card?

We spend 18-20% less when we pay with cash. Paying with plastic is too easy and we often spend the money thinking that we will take care of things later.

When we pay with cash we are forced to think about what we are doing right then. Also, visualization helps us change our behavior. When we see exactly what we have, we make different choices.

How do you decide how much goes into what envelope?

Trial and error.  Work with what you can afford to budget.  Its different for different people depending on how much debt they are in.  As you progress and free up money, you can budget for things that may normally come out of the emergency fund.  After a while you can plan ahead and cover the “gotchas” in life.  Those gotchas being back to school shopping, car repairs that may be more expensive than anticipated, new eye glasses, etc.

What are some of the hurdles when first starting out? 

Working a zero based budget and figuring out where to cut and reallocate money.  When you swipe you don’t have this same mentality.  But with cash, you can be purposeful in how much you spend on what.

How do you know how much is too much in an envelope? 

Based on your habits, tastes, etc. you can figure out how much you need in an envelope.  For a car repair, how much would you anticipate spending?  How much are you willing to spend for back to school?  If the envelopes grow too much, shift money to a goal such as paying off debt, etc. 

What is the most powerful envelope in your household? 

All of them, none is more important than the other.  My wife and I are on the same page, and we don’t sneak money out and cheat the system.  We work together when we make decisions and we talk it through.  Sometimes we have to revamp and move money, but we work on that together.

Is there a time when it’s ok to move money from another envelope? 

If you have money left over at the end of the month, only put what you need in there the next month.  If you budget $500 for groceries each month, and you have $50 left over at the end of the month; only add in what you need to bring you up to $500.  It’s a use or lose it matter when it comes to a consumable envelope.  But there are some envelopes that you want to grow such as for Christmas, car repairs, eye glasses, etc.  Don’t touch those.  With consumable envelops feel free to move money.  But don’t steal from growth envelopes. 

What is a single person to do? 

An accountability partner is necessary.  Getting an outside coach is very helpful versus asking a friend or relative to help you out.   

The final word on using Cash Envelopes

Make sure you are filling your envelopes with only the money budgeted for that category.

Also, avoid budget creep.  Be intentional with extra money and don’t let over spending creep up in your budget.

Financial Coach Greg PareThanks to Coach Greg for joining us today.

If you would like to know more about Coach Greg or any of our Financial Coaches visit

About The Author

Steve Stewart

Coach Steve has been helping everyday Americans pay attention, not interest, since 2007 after he and his wife paid off $15k in consumer debt and, using the principles he teaches, they paid off their house in 2015. You will find him using his passion and messaging gifts to create financial education content through speaking, blogging and coaching all over the United States. You can reach him by completing a contact form at