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Current envelope system users - how long have you been at it?


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We've used the envelope system for ... I don't know, maybe 6 years or so? I don't recall exactly when we started. It was sometime before May 2008, but I'm not sure when exactly. I know we did it in fits and starts for a while, figuring out what worked for us.


It got significantly easier after May 2008. That would be when we moved from the US to Egypt (at the beginning of my husband's career with the US Department of State). Credit card fraud was HUGE in Egypt, and most shops didn't accept cards anyway. So we quickly developed a hybrid system that we still use today--and that we'd continue to use if we moved back to the US, because we've finally gotten it tweaked just right for us.


First--we don't do all cash. In our current situation, we can't, and even if we could, some things would be easier on the card, and we wouldn't spend more money on the card anyway (i.e., online purchases and gas, if we were in the States--we pay cash for gas here because credit card fraud is rampant and because we have to go in anyway to sign the form that exempts diplomats from the Value Added Tax). Currently we use the debit card for online purchases (of which we make a lot, because there's a lot that's not available where we live) and for rare purchases at the military PX that we have access to--we spend big bucks on those rare occasions that we go there, and we probably would do better to use cash, but we don't. Those trips are rare and are budgeted for.


One of the hardest things for us when we started was the idea that we only had one envelope for each category, and we both spent money out of those categories--so where should the envelopes live: in my purse, in his wallet, in the house? That got easier when we had our daughter and I started staying home with her. Now most of the envelopes stay at home or in my purse. The two categories that my husband does most of the spending in live in separate areas of his wallet. And lots of budget categories stay in the bank until we anticipate using them, at which point we get out what we anticipate needing and store that money wherever makes sense at the time.


Our current envelope categories include:


-Other food (mostly restaurants now, but also farmer's market type expenditures)

-My husband's lunch money (lives in his wallet)

-Gas (lives in his wallet)

-Taxi money

-Home decor money (most of this lives in the bank account, but we use it often enough to have a dedicated envelope)

-Babysitting/lawn care (these are each once a month expenses of relatively fixed amounts, so we combine them so we don't run out of envelopes)


There may be one or two more, but I don't have them in front of me right now, and those are the major ones.


You may have noticed major budget categories that are not included in the envelopes--auto maintenance, discretionary money for each of us, clothing, entertainment, etc. We don't have to have cash envelopes for those because, in addition to DR's envelopes, we use YNAB budgeting software. We can leave all of that money in the bank and use YNAB to keep track of our budget categories as if they were virtual envelopes. This works really well for us because some of those categories are not-often-used ones (auto maintenance, for example), some are paid by online transfer (insurance, for example), and others may be used in brick and mortar stores (in which case we get out cash first) or online (discretionary, clothing, etc). By leaving the money in the bank until it's needed, but keeping a detailed budget in YNAB, we maintain the flexibility and don't have large amounts of cash on hand.


We tried DR's budgeting software but it didn't work well for us. I think it was too hard to customize all the different categories we wanted. With YNAB, it's easy. We love the combination of DR's envelopes and YNAB's software.


I'm happy to answer any questions you have about either, or about how we've combined them into a system that works for us.


(YNAB = You Need A Budget, by the way :001_smile:  )


(Edited because apparently my math skills need work ... since 2008 would be 6 years, not my originally typed 5!)

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We've been doing it for nearly two years. We set our budget on a monthly basis, revisiting what's coming up for the next month a few days before it begins. We finalize the budget together, then DH gets the cash from the bank on the first day of the month if possible, and fills the envelopes (after a year we swapped from the envelopes to the DR wallet). Then we roll for the entire month. Not sure how one can do it for just a week or two. Do you budget on a smaller time scale? I regularly carry the wallet in my purse, since I do the bulk of the purchasing (the envelopes include groceries, restaurant, toiletries, misc, pets, band tuition, haircut, and blow).


Erica in OR

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Is the DR wallet something that will hold up and worth the price?  I think one of my biggest challenges is that I don't feel safe carrying around my little walmart container and envelopes holding a fair amount of cash.


I do alot of errand running on certain days - house, food at multiple stores, target, etc. and having cash would curtail alot of the overspending in those stores.  My concern is the actual physical managing of the money.


I have an app and ynab so you'd think I would be limited to spending only the amount in the budget category that's left.  Nope.  I just spend away and deduct it from our savings.  BAD habit that I think would get broken if I had cash only.  My debit card is not my friend.

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We have been doing it almost 4 years.  I do have a DR wallet that I keep in my purse.  DH just has money in his wallet for lunch, gas, and spending.  We keep restaurant envelope either in my DR wallet or in a drawer on weekends.  The rest of the envelopes I keep.  Such as my spending, my gas, grocery, dental (orthodontist)..but that is changing now that we have a Benny card, haircuts, medication (that is changing too with mail order prescription) etc...  We do on-line bill pay so that money stays in the bank.  We also have sinking funds that stay in the savings.  

Before each pay period we do a budget and figure out the amount for each item.  Based on that we get cash out and I write it out exactly how I want it and put it on the back of the check.  

We have had some learning curves. Such as looking ahead to summer when we both have to pay car tax.  Fall when extracurricular fees are added to kids activities etc..  Things change all the time and we learn to roll with it.  Sometimes we have to take money from one envelope to put into another.  

It's not 100% perfect, but it is light years ahead of where we were 10 years ago. It works.

Cash has curtailed our spending dramatically.  It all just seems to expensive now! LOL

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Our DR wallet has held up pretty well. We're on #2 because we weren't very gentle with--ok, we abused--the first one, but this one has been in use for maybe 3 years or so? The key, I think, is to determine how many envelopes you need and make sure that it has enough. I think it has 5 or 6 attached, and it came with a few spares. You'll want to check the current model and see if they say how many envelopes it actually has so you'll know if it meets your needs. If it doesn't, I'd consider going to an office supply store and seeing what small 3-ring binders and accessories (3-hole zippered bags) are available; that solution may require a larger purse, though.

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I've never heard of a DR wallet but we use a variant of envelope budgeting.

We use an app called goodbudget, used to be eeba. All the money stays in the bank but we have virtual envelopes and fill them weekly since dh is paid weekly. Whenever we spend money we quickly enter it on the app as a deduction from the relevant envelope. We have used it for about 3 years now.

It was a life changer for us. I grew up low income and also had even worse mental health issues than I do now, so I was terrified to spend money at all. Especially on myself. Having a set amount to spend on myself as personal money, seeing it siting there, helped, as did realizing my shopping budget was big enough to buy a couple of luxuries (I'm not talking about lavish items here, I struggled to buy things like shoes and my favourite cereal. I remember one day 3 years ago an incident which triggered us to look at options regarding budget was when my husband realized the shoes I had been wearing for months, my only pair, were completely split at the bottom.)

Dh, on the other hand, grew up with money and had no experience with discretion in spending. I remember I sent him out to get dish soap a few days after we married and he managed to come back with the smallest bottle of the most expensive brand I've ever seen to buy! Envelope budgeting has helped him get perspective on spending within limits, and what those limits are, and has kept him accountable.

We tried traditional budgets but they were so rigid and one unplanned for expense breaks it! The envelopes mean we can shuffle things around, we can see what is left in each category, etc. it works really well for us I don't stress about money at all anymore (I am not allowed to look at the actual bank etc, due to triggers and issues I have, DH does all bill paying) but I always know when money is and isn't available and I rarely feel guilty spending money on normal items these days. I can budget out for longer term expenses or big purchases, like the huge order of books I placed.  We can see what we are spending our money on really easily, and choose to reprioritize with actual numbers to look at. We can see what areas we regularly find ourselves 'in the negative' or with extra cash and adjust accordingly. Since they are virtual envelopes and most of the money is in the bank we can 'borrow' from savings to go into the negative on one envelope, and then just have less next week because we 'paid back' the difference. This is great when there is a great deal or sale on, or those high pressure times like right before christmas when we might not have saved quite enough. We know the savings will not actually be effected because we have a payback system built in, rather than taking money out of savings which gets whittled away, it's kind of like a loan to ourselves which is automatically paid back when we refill the envelopes each week. It requires a certain amount of self dicipline of course to keep things in check.


We do a weekly system as we are paid weekly (apparently that's unusual in america? I can't imagine trying to do a monthly budget! That's way too much time, I'd spend all of it in the first two weeks and have nothing left for the second two!) We just recently revamped our system because we needed to do some major changed, so here are our categories.


Groceries (Includes necessary food out)

Bills (all our bill money goes here, then is withdrawn as the bills are paid, so we can see if there is a discrepancy between what we budget for bills and what we actually pay out)


My personal money 

DHs personal money

Children's personal money


Household items (cleaning items, home decor, kitchen accessories, pet care, etc)

Books (we have this as a seperate budget to ensure that it is prioritized and not just put off for other expenses, while at the same time ensuring when I do go on a book buying spree that I don't overspend)

Christmas Tree Fund (we put $20 a week away into this because our decorations are all old and cheap and our tree broke last year (artificial), and we decided to save up and get a new fancy tree and decorations, and maybe even finally some outdoor lights this year.)




Our personal budgets cover things like clothes, hobbies, gifts for each other, entertainment, meals out,  special treats etc. The kids have no control over their envelope yet, but eventually pocket money will be a portion of that. 

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I use an accordion coupon holder, the one that's about the size of a business envelope.
I get them at target on the dollar section, and have been suing this system for about 6 years. I like it MUCH better than using the DR envelopes as this holds up well, and looks more attractive. It has about 10 categories, that I've labeled, and the way that we do it that works for us, I get a set amount of money every two weeks for the family purchases, but its up to me how to allocate how to spend that. I can use less one week and save for a bigger purchase, or keep $ in a category until I save more. He handles bills, a bit of savings, and after that is the set amount i use for the family.

All grocery shopping, homeschool activities, dd ballet, gas, household, fun money, clothes, are bought with the household money, and its really helped me learn to budget better as I can think about what's coming up in terms of activities, or classes, or lunch with friends, or whatever. So every two weeks when he gets paid, I sit down and think about what each category is going to receive, and then pull cash out. I do leave some money in my account, which is only in my name, as it keeps it easier to keep track of, and make amazon or other online purchases. But I budget those and leave money in there for that. Not every category had money it it each time, these are just what I would use if I were using them all... Sometimes I put only 3 or 4 dollars in a category and add to it till I have enough to but what I need.

My categories are:
Whole foods
(Small health store)
Personal (clothing, fun, makeup)
Eating out
Ballet class
Homeschool curriculum
Essential oils

Anything beyond this, dh and I talk about before buying, as then it will come out of savings or we will decide to save money for it. Some $$ health items I wanted, summer camp, a new juicer, a bigger purchase of clothing, Ikea visits, etc....we see if we have money tha we can swing for it. If not, I put it on the list :)

Works for us, as I can't handle credit cards, and it does force me to think about exactly where every single dollar is going.
I actually spend waaaay less money I used to on eating out, and food shopping. I've been able to allocate more for clothing, and fun as its forced me not to be lazy about spending whatever I wanted on silly purchases. I was also able to lower my grocery bill a LOT just by being more aware of how to save now that I had a budget, instead if buying whatever I wanted.

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Is the DR wallet something that will hold up and worth the price?  I think one of my biggest challenges is that I don't feel safe carrying around my little walmart container and envelopes holding a fair amount of cash.



I have had the DR envelopes, and no, they are not useful or sturdy.

Someday, I hope to get a set from Etsy - cloth or vinyl or laminated.

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Is the DR wallet something that will hold up and worth the price?  I think one of my biggest challenges is that I don't feel safe carrying around my little walmart container and envelopes holding a fair amount of cash.



We had the "Starter Envelope System" that we got when we took the class. Not very sturdy, after using it for several months. The paper of the most-used envelopes started to fall apart, the zip-slide coin purse developed holes, and we didn't write on the envelopes anyway to keep track of things (just saw how much money was physically left in the envelope). When it went on sale, we bought the "Black Designer Wallet Envelope System" and use that now. I like that it zips up and has a zipper coin portion. A drawback is that it doesn't have quite enough pocket slots for what we need. We sub-divide one or two of them or put cash in a separate bank-type envelope instead. I like the wallet, but think any sort of multi-pocket type organizer would also work and be potentially cheaper.


Erica in OR

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