August 17th, 2007 
NCN
I use the Envelope System to manage my cash. The idea behind the envelope system is pretty simple. By distributing you cash into manageable budget categories, you can control spending, manage receipts, and fine-tune your budget. I thought that it would be interesting to create a video tutorial, explaining the basics of my envelope system. (Please note: I use actually envelopes to manage my cash, but you could use any method for dividing your cash into manageable amounts.) You will have to click the arrow to start the video… and you might have to hit the small volume bar at the bottom to get the audio to play. I did not set this video to “auto-play” because I hate going to sites that set their videos to “auto-play”.
Leave a comment and let me know what you think about the video.
(My Dad watched it and said… “Looks like the opening to Napoleon Dynamite”. )
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An ING Direct account can help you do the envelope system online, and it’s easy. (I don’t work for ING!) If you’ve got a little cash, say $300-$500, keep it in your main ING checking account as a base. You can have as many savings accounts (envelopes) under the umbrealla of your checking account, name them what you want, and they don’t cost anything. In fact, each account will earn interest! So when you use the check card from your main account to buy gas or groceries, when you get home (or you can do it from your cell phone), just transfer the funds from your grocery or gas “envelope” account to the main account so you keep your base amount the same. If you know you’re going to make a larger purchase, you can of course transfer your money before you go. This is a little safer than using cash, you get interest, and have some money readily available if you decide to stop for a few groceries or fill up when you see cheap(er) gas.
Now if you still want to use the envelope system (and this system really does help you budget) there are plastic “enevelopes” with dividers (you can get them in the office supply section of Target, Wal Mart, or in places like Stapels). I found they work better than paper- just more durable and all in one place. Before ING, I kept one hidden at home with all the monthly money in it. I had a smaller one in my purse and would keep a certain amount of money from the larger envelope in this one. All the money was still divided. So in the one in my purse, I would have about $100 for groceries, $100 for gas, $50 for dry cleaning, etc. If you don’t want to carry one of these plastic envelopes (they are kind of like a coupon keeper), you can also use colored paperclips to sort your money in your wallet.
This system really works, because when you use cash, it’s either there or it’s not. And you learn how to make ends meet at the end of the month. At first, I would just do two weeks at a time. When I got paid, I would pay all my bils that were due for the next two weeks, then put the rest into the categories as needed. Towards the end of the two weeks, if I needed more money for gas, I had to take it from the grocery money, and really budget my food spending. I used more of what was in my cabinets and freezer and actually put stuff back at the grocery store that I really didn’t need. You’ll find the categories that work well for your life. I have one for my beauty spending because I know I need a haircut and color every two months or so. What’s good about the ING method is if you put a certain amount in from each paycheck for certain larger bills like insurance, which may not be monthly bills, that money will just be sitting there for a while and it will earn some interest. This is great for your savings and vacation “envelopes”.
Have fun!
Thank you. I’m terrible with money and this seems like a very simple system to use. I appreciate you taking the time to make the video.
[...] For those, like me, who live in rural areas, this could be a very big deal. In our small town, there are only four or five places to buy gasoline. Personally, I use my debit card for most gasoline purchases, but I’m going to start adding a bit more cash to my ‘Gasoline’ envelope. (For those of you unfamiliar with the envelope system – a great system for managing your cash – I have created a video detailing what it is and how to use it.) [...]
I always wanted to keep budget to get the most out of my money. Being single makes it not a something easy for me to get the habit into. However I like the over simplified approach to it.
Thanks
Chuck
I think this was an excellent tutorial! I linked to it on my blog because it’s a great way to show people how to use it. I ended up getting the Dave Ramsey envelope system, otherwise I’d still be trying to find the perfect wallet to fit the envelopes in! With my change, I put it in a jar and at the end of every month I wrap them and put them in my son’s savings account for his college.
I too have been using this method for a few years now and I can honestly tell you that since I’ve started this, I’ve had the best sleep of my life! Budgeting is the key people! This simplifies your life in everyway.. Great video to help you understand and get that ball rolling towards financial freedom…Just give it a chance!!
Thanks for the tutorial! My parents taught be this system. I’m thinking about going back to it soon. Easy way to track expenses for us non-accountant types.
I see comments going back almost a year. Good, clear, concise video. Thanks!
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[...] was critical to me, the only thing that worked for my wife and I was the envelope system. Envelope System Video Tutorial (Step By Step Guide To Using The Envelope System To Manage Your Cash) Dave Ramsey’s Envelope Budgeting [...]
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Thanks for the video!
love the video and we are in agreement %100!. my wife and i use the cash only system too. we have saved money seeing the money spent – rather than the ease of using a credit card. she got tired of using the plain envelopes though. a friend told her about a website that makes inexpensive “cash only” envelopes. she got a set for about $10 – 15.00 and loves them. She says they look better than pulling out the white envelopes out of her purse. whatever it takes to keep the cash only system working – i am all for it.
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I didn’t agree with you first, but last paragraph makes sense for me…
Thanks for the video! Just started my journey to the envelope system and it was great to actually see it done. And I love the idea of saving the change! Hopefully this will be the answer for me :0) Thanks again!
really enjoyed the presentation. I cant wait to try it starting this week. will keep you posted!
Excellent video! I work from home and was having a discussion on a work at home forum (www.workplacelikehome.com) about starting to use the envelope system. Some on there hadn’t heard of it and I so I did a quick search and found your page and linked it there. I just came back to watch your video and I am very impressed! I wasn’t sure what to do with the change, having it rolling around in an envelope didn’t seem like too great of an idea! So I love the “put it in your piggy bank” idea. I suppose then that gets cashed in when it is so much and put towards savings? I also had a thought, that the excess $$, even the change, from the food budget could be saved to go towards an expensive meal, like Thanksgiving or Christmas dinner. Those always tend to blow the budget out of the water. I am linking your blog on my blog which is for work at home jobs. Thanks for the awesome post!! I will have to spend some time reading your other posts as well.
Great tutorial. It’s nice to have a visual explanation for those of us who are visual and kinesthetic learners.
p.s. you sound slightly like dave ramsey with your southern drawal. lol.
Great video! Your site is great with lots of things to share about saving money.
great video! it is nice to see the system in action.
Bogus. Everybody knows simple, common-sense things like this don’t REALLY work. What we need is a POWERFUL SYSTEM of INSIDER SECRETS for only $19.98. Because everyone knows you get what you pay for.
And yes, this is sarcasm.
Nice job. This is stuff we all should have learned when we were chirrens.
Great video!
[...] NCNblog.com: Video tutorial of the envelope system [...]
[...] do variations on any of these methods. For example, for the paper & pencil method you could use envelopes to split up your money and make sure you don’t overspend. What are some other methods you use to track your spending or maintain a budget? Leave your tips [...]
Thank you so much for the work put in this presentation. I heard of the envelope system, but I’m visual and needed to see it done.I will start right away. I’m sick and tired of overdrafts for a couple of dollars($1.89+$35.00) .
monica.
[...] this super-simple money management system, I’ve made a quick, four minute video tutorial, explaining the Envelope System and how I use it to manage my cash. Check it out and let me know what you [...]
Fantastic video! I think this is one of the best explanations I have heard.
I personally use the envelope method for budgeting my family’s finances, but I don’t like carrying around all that cash. So I developed an online envelope-based budget tracking system called NeoBudget (www.neobudget.com) that uses virtual envelopes. It has the same psychological benefit as cash envelopes, but I can use my debit card instead.
Very cool. Very convenient. I will do this my next check. I like the whole paying off debt with any left over money. Very cool. I may put any left over money into my vacation or Christmas envelope…
[...] very quickly figure out exactly how much money I have available and plan accordingly much like the envelope system of [...]
works for me great and saves me money . lol the fake cash but hey keep me on track of my cash
[...] checking account for unforeseen-expenses. Not included in this diagram, but very important, is my envelope system, which I use for managing my cash, to pay for budgeted items like groceries and [...]
Thanks for the suggestions, we are going to tweek it alittle and give it a try.
Try this out for a more fashionable cash envelope system! I love mine!
http://laceyandtyler.blogspot.com/2009/02/fashion-cash-clutches.html
great tutorial!!! everyone should try the cash only budget system – my husband and i have been on the dave ramsey system for the past 8 months – we are hooked. we dare you to try it just for 1 month. you will save money! and for assistance in keeping your money organized and making the cash only system work smoothly – go to http://www.crunchycute.com. they have a variety of tools for starting the cash only system – plus lots of free giveaways!
good luck to everyone – patty ann
Marvelous video! I will definately take the suggestions from the video to heart! Thank you!!!
While I do not use this system there is one huge advantage that would persuade me to use a modified version. You know where your receipt is if you need to return something. I am horrible about keeping my receipts!
[...] Envelope System Video Tutorial :: No Credit Needed [...]
[...] people check in everyday, others use the envelope system to budget, and others only update [...]
[...] is a web-based version of the envelope budgeting system. It automatically connects with most banks and offers a free billpay service. This looks [...]
[...] is a web-based version of the envelope budgeting system. It automatically connects with most banks and offers a free billpay service. This looks [...]
Wow, that was a great tutorial. Really, budgeting is just as simple as you described it. All you have to do is what you said and you’re golden.
As to the danger of losing a month’s worth of cash while carrying the envelopes around, well, it could happen but even if it didI think I’d still be ahead as it would cost me *much* less than I’ve lost through overspending whennot using the envelope system.
It’s been back to the envelopes for me now after finally deciding that it just is more concrete and practical than any other method. There’s no complexity with which to confuse or delude yourself in the envelope system. Either the dollar bills are there or they aren’t. And you can see how many are left each time you go in to make a purchase so it’s a natural spending moderator.
One thing I have added is I do have a credit card that I use to buy gas for my car. How I do this and keep it in the envelope system is I have a “gas” envelope and a “Chase Credit Card” envelope. The Chase Credit Card envelope starts the month empty, and what I do is take the cash from the gas envelope and transfer it to the Chase Credit Card envelope when I make the gas purchase. At the end of the month I use that cash in the Chase Credit Card envelope to pay off my credit card.
That way I get the convenience of not having to wait in line for gas, but still have the concrete limit that I only have what’s in the envelopes to spend.
[...] We use the envelope system to manage our cash. My wife has a set of envelopes. I have a set of envelopes. Click here to watch a video describing, in detail, how the envelope system works. [...]
I enjoyed watching your video! Next month my husband and I willll begin following a budget because even though we have a great income and no credit card debt we could be saving a lot more money than we already are.
Thank you so much for sharing that tutorial. I just finished reading the Dave Ramsey’s book and want to so get control over my spending. I especially like the idea of writing on the envelope and loose change in a piggy bank. I am forever making my pocketbook heavy with that loose change.
[...] Envelope System because they are visual… so what better way to learn it than a video? This Envelope System video tutorial is from No Credit Needed [...]
It’s been back to the envelopes for me now after finally deciding that it just is more concrete and practical than any other method. There’s no complexity with which to confuse or delude yourself in the envelope system. Either the dollar bills are there or they aren’t. And you can see how many are left each time you go in to make a purchase so it’s a natural spending moderator.
[...] I do not like credit cards, and there are times when I do not feel like using my debit card. I am a big fan of the cash management system known as the envelope system. Click here to view a short video where I explain how the envelope system works for me. [...]