How To Use Cash Envelopes Effectively – EP 64

There are many budgeting techniques out there but today we’re taking a look at the envelope system. It’s an extra special episode as we have THE Allison Baggerly from Inspired Budget acting as co-host while Jen is on maternity leave! Allison and her family have actually used the envelope system for years and she brings a helpful perspective to this topic! Many of us have ‘cut our teeth’ in budgeting by using the envelope system and still more have fallen off the wagon – but let’s talk about how might make this practical method work for us!

We’re so excited to have Allison Baggerly, founder of Inspired Budget co-hosting with Jill while Jen is on maternity leave!

Allison is psyched about teaching women how to budget, making savings second nature, and paying off debt!

Check out Frugal Friends Episode 18 where we first introduced Allison on our show!


Ebates: We love and use Ebates all the time so we wanted to give them a shout out. If you’ve never used it, Ebates is a shopping portal where you can get cash-back on purchases from your favorite stores. We use it for Groupon, Amazon, Walmart, travel sites and more. And, if you haven’t tried Ebates yet we’ve got a $10 welcome bonus for you on your first purchase of $25 or more when you sign up through

Starch Based Adhesives: You know the kind. There’s nothing quite like sending a letter and licking the rim of the envelope to seal that sucker up! We know they’ve come up with better solutions, and at the very least one could use a damp paper towel – but who doesn’t want the thrill of licking paper and the risk of a bleeding tongue? Starch based adhesives, the best way to get a free snack in the middle of a work day.

Notable Notes:

What the Internet has to say:

This article from Dave Ramsey breaks it down for us and explains what exactly the envelope system is and how it works!

What Allison + Jill have to say:

The envelope system is an excellent tool to help you stay on top of your budget and immediately alerts you when ‘there’s no more money to spend’!

  1. Think of the budget categories that need cash envelopes
  2. Figure out your budget amount
  3. Create and fill cash envelopes for the budget categories
  4. Spend only what you’ve put into the cash envelope!

We appreciated the “Common Questions” – and found there are solutions to any of the barriers we can identify and that this system is workable!

More from the Internet:

This article from Dough Roller plays devil’s advocate and gives 7 reason why the envelope system is not a great idea. There are definitely some valid points, but also some arguments that have flexibility with solutions.

What Allison + Jill have to say:

  • We agree – the envelope system can be scary at first. carrying around cash is not a common experience! Definitely consider how much cash you carry with you and how you can keep it safe!
  • We disagree with the argument that “you can’t use credit cards” – there is absolutely freedom to inforporate credit card use if that’s what works for you. Choose what you will use the CC on and use cash for the rest!
  • The author argues that there are better budgeting systems BUT the whole point is that the envelope system connects us with our cash and spending – nothing can replace that!
  • One barrier that does require some individualization is juggling money around. If one person holds the ‘grocery money’ – it can be complicated if the other needs to stop at the store for a food item. This can be solved, but still a barrier for some!

BILL OF THE WEEK – Thank you for sharing your bill of the week with us! We always look forward to hearing these!

Lightning Round

How to make the envelope system work for you!

More from Allison on the topic HERE

  1. No method is perfect; but try it out for 3 months!
  2. Make it beautiful! If you find it pleasing to interact with – it’s more likely to stick! Try out Allison’s low cost cash envelope printables!
  3. For those on a strict budget, or are serious about getting out of debt – this is for you! Hunker down and make it work!

Frugal Friends Book Club:

It’s July and we’re reading Mom and Dad we Need to Talk by Cameron Huddleston for book club!

  • If you want a free copy, leave us a review on iTunes or Stitcher, screenshot the review and send it to We’ll select the winners at the end of the month.

See you next week!

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