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BEGINNER'S GUIDE TO CASH ENVELOPES
WHAT IS IT?
A cash envelope system can be an effective way to budget for anyone that
needs a visual budget to stay on track. The cash envelope system is exactly
what it sounds like. You put your cash into different envelopes based on the
budget categories. You’ll decide exactly what amounts go into each cash
envelope based on your spending goals.

1 STEP ONE:
Look at your current expenses and how you’re spending your money! Money
made me feel anxious before because I never truly knew what was *happening*
with it. How many bills do I have? What future expenses do I need to account
for? How much is going into gas - how much do I typically spend for gas? Why
do I have 7 subscriptions?! AAAA! It can turn into a whole mess! So let’s step
back and face our bank accounts and figure out: WHAT IS HAPPENING?

Make a list of all your bills - or another term for it: FIXED expenses*
(rent, electricity, insurances - I typically put subscriptions in here too,
because it’s essentially a “fixed expense”)
Make a list of typical spending expenses/ NON-FIXED expenses (do you spend
money on clothes? haircuts? groceries? entertainment?)
Make a list of things/events you want to save for (emergency savings
account, birthdays, christmas)

Luna, you're la toxica. Usagi just

needs a financial system where
she can set aside $$ for ice
cream! you can save money for
anything you want (even if
others think it's silly). just make
sure you set aside money for
important expenses (rent, bills,
groceries) *first*!

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 2 STEP TWO:
Now that we have a list, we can start to look at how much we spend for each
category. Look for patterns in your spending - I like to start with fixed
expenses/bills, because they tend to stay consistent.

Fixed Expenses: For example, in my household, I know I can expect our water
bill to be around $75-90 dollars a month. Start with bills, and then move
on to your non-fixed expenses, which can be trickier to see a pattern in.

Non-fixed expenses: For example, I have an envelope dedicated to gardening.

I know I will need dirt, mulch, flowers, etc. Last year, I spent around ~$350
on my garden. Based on that number, I can decide how much money to
allocate into that category. Another example are haircuts - I typically
spend $40, and I get a haircut every 4 months…so I would allocate a
smaller amount of money in that category every paycheck to reach $40
within 4 months.

Savings: this one is the easiest (at least for me!) I like to think of a general
amount I’d like to save for each category. For example, I spend around
$600 for Christmas, so I need to allocate an appropriate amount of money
each paycheck to hit that goal before November (when I start Christmas
shopping!) I’m also pretty flexible with savings numbers - if money is
tight, I’ll drop the Christmas budget down to $400 and make do. You’re
allowed to play around with numbers like that, because money is like
water. It ebbs and flows. And sometimes that water dries up. Make hitting
your fixed expense numbers a *priority*.

3 STEP THREE:
So now we know where our money is going, and how it’s going. We finally have
our hands on the steering wheel!!! So let’s drive!!!
What is your total income per month? That pool of money will be divided
up and sorted into each list/category we made. I recommend using a
budget sheet/paycheck breakdown sheet to keep track of this. It gets
hard to do in your head. You can use my template (included in this
bundle), or you can find ones on Etsy or free templates online or in the
App store!

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WITH THE BUDGETING DONE...
Everything we talked about up to this point was budgeting 101 - now we can
talk about the envelope system. You can either budget and keep track of it
digitally/on paper, OR use the cash envelope system! Cash envelopes are a
physical representation of your money. You have physical envelopes labeled
with each category we listed in our budget. Then we ‘stuff’ them with actual
cash - or not, you can use play money instead. Bottom line is, we are using
physical manipulatives to help us budget.

MATERIALS
a. I use an A6 cash binder with appropriate sized envelopes that I have
labeled with each corresponding category name (check out my TikTok
videos to see that in action!)
b. Cash (that you withdraw from your bank every paycheck) or play money
(you can find fake money on Amazon).

FAQ
1. Do you have a bank account?
a. Yes I do! I don’t do everything with cash. I have a hybrid system. I
primarily use my cashbook for non-fixed expenses (eating out, garden,
self-care) and some savings expenses (Christmas, presents, Praxis exam).
I manage my emergency savings categories digitally (so they can sit in
my savings account and accrue interest).
2. How do you cash out? ATM? Bank teller?
a. I go to my bank teller, because ATM’s don’t have smaller bills like $1,
$5, etc. I like to determine how much of each bill I’m going to need, write
it down on a piece of paper, and show that to my teller. And yes, it can
be annoying driving to the bank every paycheck, but hey, I’m managing my
money better, so it’s worth it to me!
3. How do you pay for online bills?
a. I pay my bills digitally as well, and keep track of them using play
money. So every paycheck, I set aside a certain amount to keep in my bank
account for online bills, and I take out cash for my physical money
needs. Some people do it all by cash and simply deposit the cash back
into their bank when it's time to pay bills. I don’t have that kind of time,
so I customize the system for my lifestyle.

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LET'S SORT OUR ENVELOPES!
HERE'S SPACE FOR YOU TO JOT DOWN YOUR BUDGETING CATEGORIES AS YOU BRAINSTORM! I
MADE 3 COLUMNS FOR FIXED EXPENSES, NON-FIXED EXPRENSES AND SAVINGS. LET SEE WHAT
WE CAN UNCOVER!

FIXED EXPENSES NON-FIXED EXPENSES SAVING UP FOR...

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LET'S SORT OUR ENVELOPES!
HERE'S AN EXAMPLE PAGE! THIS IS HOW I HAVE MY BUDGETING CATEGORIES SET UP. MAYBE IT
WILL HELP YOU SORT OUT YOUR BUDGETING NEEDS - I KNOW I LIKE HAVING REFERENCES,
HELPS ME UNDERSTAND THINGS BETTER, HAHA.

FIXED EXPENSES NON-FIXED EXPENSES SAVING UP FOR...

Natural Gas judia (me) emergencies

water bill eating out christmas

electricity clothes bday gifts

wifi beauty tuition

alarm system car gas

dc comics sub garden

Netflix sub speech supplies

pipe debt groceries

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PAYCHECK bank:

BREAKDOWN bills: +$$ TOTAL

date:

income: +$$$

TOTAL:
envelope: +$$ TOTAL

debt: +$$ LEFT

savings: +$$ TOTAL

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UPCOMING EXPENSES
YEAR:

janurary february march april

may june july august

september october november december

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IMPULSE SPENDING IS MY WEAKNESS
I am a crazy impulse spender - that's why i like the cash
envelope method so much! for some reason, when i swipe
my debit/credit card, it doesn't feel like i'm spending
money. this is because we (neurodivergent/adhd folks)
experience loss aversion — handing over something physical
makes us feel a pain, as if we are losing one of our
possessions. this compels us to spend less. for some reason,
credit cards/debit cards just don’t have the same effect.
that's why i prefer to use physical money when i go
shopping, because it hurts to see my money go away!

1 DON'T DEPRIVE YOURSELF!

Self control wears down over time. there have been experiments with choc chip
biscuits and the like — the longer you try to control yourself, the more likely you are
to “binge”. So, let yourself buy little rewards every couple of weeks or so. it’ll stop
you from impulsively getting those big ticket items. i always set aside a good chunk of
change for myself to spend every paycheck. weirdly enough, it helps me spend less! it's
like the concept of "forbidden fruit". when you can't have it, it's more tantalizing.
we're trying to build healthy financial habits - that's our main goal! Being *strict*
with your budget will not be sustainable. You will most likely quit (because getting a
treat now and then is fun! don't deprive yourself of fun).

2 CAUTIOUS ONLINE SHOPPING!

If you’re buying something online — get into the habit of setting a timer on your phone
for half an hour (or preferably more) before you click through to payment. if you still
want it after that time, the chances are that you actually want it. I have abandoned
many online purchases this way. Plus, many websites and businesses will send you an
email with a discount code after you abandon your cart for a couple of hours. so if you
do end up purchasing the item, you'll do so with a deal B) finesse 'em!

3 I SHOP WHEN I'M SAD :(

If you’re like me, then you may suffer from what i call "emotional spending". when i'm
feeling anxious or upset, i rely on shopping as a crutch. unfortunately, this is an
expensive coping mechanism. what i do instead to mitigate the damage is to go all out
at... dollar tree! yep! simple as that! i can buy as much as i want (candy, chocolate,
small toys, decor!) for only a dollar. 2o items and i only spent 20 bucks?! and i get a
small dose of serotonin?! sign me up. i find that my impulse to spend disappears after i
do this.
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EMERGENCY SAVINGS CALCULATOR
THE RULE OF THUMB IS THAT INDIVIDUALS SHOULD HAVE ENOUGH IN AN EMERGENCY FUND TO
COVER THREE TO SIX MONTHS OF LIVING EXPENSES. ENTER YOUR MONTHLY COSTS FOR THE
FOLLOWING:

Housing & utilities transporation

rent/mortgage $ car payments $

utilities $ gasoline $

Home insurance $ car insurance $

$ $

$ $

MEDICAL DEBT
PRESCRIPTION $ CREDIT CARD $

HEALTH insurance $ LOAN PAYMENT $

$ $

$ $

FOOD MISC.
GROCERIES $ $
$ $

NOW TAKE YOUR TOTAL AND MULTIPLY IT BY THE NUMBER

TOTAL: OF MONTHS YOU WANT TO BE PREPARED FOR. THE TOTAL
WILL BE THE AMOUNT YOU NEED SAVED UP!

X 3 MONTHS = X 6 MONTHS = X 12 MONTHS =

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EMERGENCY SAVINGS TRACKER
THE RULE OF THUMB IS THAT INDIVIDUALS SHOULD HAVE ENOUGH IN AN EMERGENCY FUND TO
COVER THREE TO SIX MONTHS OF LIVING EXPENSES.

goal: 100%
FINISH!
date: amount: total:
90%

80%

70%

60%

50%

40%

30%

20%

10%

START!
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 SAVINGS TRACKER
THING: AMOUNT:

date: amount: total: 100%

FINISH!
90%

80%

70%

60%

50%

40%

30%

20%

10%

START!
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SAVINGS CHALLENGE
WRITE A NUMBER IN EACH FROG'S ENVELOPE. THEN, PICK A FROG AT RANDOM! THEN TAKE
A REAL ENVELOPE AND STUFF IT WITH CASH EQUAL TO THE NUMBER ON THE FROG. FOR
EACH ENVELOPE YOU STUFF, COLOR A FROG!

total:

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SAVINGS CHALLENGE
WRITE A NUMBER IN EACH CAT'S ENVELOPE. THEN, PICK A CAT AT RANDOM! THEN TAKE A
REAL ENVELOPE AND STUFF IT WITH CASH EQUAL TO THE NUMBER ON THE CAT. FOR EACH
ENVELOPE YOU STUFF, COLOR A CAT!

total:

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SUBSCRIPTION TRACKER
SUBSCRIPTIONS CAN BE TRICKY IF YOU DON'T KEEPTRACK OF ALL OF THEM! SOMETIMES I GET CHARGED FOR A SUBSCRIPTION
I TOTALLY FORGOT ABOUT...LOSING $7.99 EVERY NOW AND THEN CAN STACK UP! SAVE THOSE PRECIOUS DOLLARS :O)

SUBSCRIPTION AMOUNT DUE DATE CANCEL?

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MY FINANCE GOALS
USE THESE POST-IT'S TO WRITE DOWN SOME OF YOUR FINANCIAL GOALS FOR THE YEAR. I
INCLUDED SOME MILESTONES/CHALLENGES TO GET YOU STARTED. FILL IN THE HEARTS WHEN YOU
REACH YOUR GOAL!

save first
$100

cancel a don't eat out

subscription for a week!

save first
$500

save first
$1000

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 d lu
goo ck
the end