Our Cash Budget Envelope System: 3 Month Update! (2024)

They say it takes 90 days to forma new habit.

Well, I’m proud to say that as of this May, Mark and I reached 90 days ofusing our new Cash Budget Envelope System. And we are still goin’ strong, people!

Now, paying for our unfixed expenseswith cash instead of plastic hasn’t been easy breezy. We’ve had to maneuver some bumps in the roadand learn some hard lessons, but overall, these first three months have been a trulypositive experience for us. We’re seeing the fruits of this new system in financial wellness. And THAT isexciting.

So, I thought I’d dedicate today’s post to sharing about our first 90 days of turning a financial experiment into a habit we plan to keep. I’ll be sharing the highlights, challenges, as well as some of the adjustments we made in our cash budget envelope systemthis February, March, and April.

But First, a Refresher!

Now, for those of you just tuning in,I have two posts from Januarythat willgive some helpful background informationas well as some resources you might be able to use:

DIY Cash Budget Envelopes: Free Printable

The shortof it?

One of our goals for 2015 was to create and actually stick to a monthly budget. And after hearingsomany success stories on The Dave Ramsey Showof folk who saved incredible amounts of money bypaying for their expenses in physical dollars and cents, we decided to give it a whirl.

So, we created a Budget Binder for trackingof our monthly goals as well as the nitty gritty financials. And I used my Silhouette machine to create some prettyenvelopes for divvying upour cash (because sometimes, the petty factor can go a long way in helping me get excited about something I’m dreading).

Now, let’s dive in to the month-by-month updates, shall we?

What We Learned in Month #1

Highlight: It took a few weeks to get in the habit of remembering the right envelopes before leaving the house, but once we did, we noticed a positive impact on our spending almost immediately. The physical exchange of dollar billsat the cash register instead of the swipe of a credit card increasedour awareness ofwhat exactly we were spending our money on. Our spending quickly became so much moreintentional.

Challenge: Before the end of the month, we ran out of money inour envelopes forGROCERIES and LAUREN’S FUN MONEY. (Womp womp.) That made us re-think our allotment for those categories, but also forced us to look at what we were spending that money on. For me, realizing how much of myFUN MONEY was going toward Starbucks frappuccinosand pastries inspired me to make some dramatic changes to my diet this spring.

Adjustment: We decided to add a new category to our cash budget envelopes: GENEROSITY. That way, when we want to buy coffee for a friend or help fund a mission trip, we don’t need to pull from our other envelopes. Instead, we’re intentionally budgeting for it, which has already inspired us to seek out opportunities to be generousabove and beyond our normal tithe–something that Mark and I decided is a priority for us.

What We Learned in Month #2

Highlight: We not only stuck to our budget this month, but came in several hundred dollars under budget! It was encouraging to see this system help us curb excessive spending and throwmore moneyatour savings.

Challenge: We also learned the importance of schedulingour monthly check-in meeting by the 28th of the month. Life got busy toward the end of March, and we ended up having our meeting to review March’s envelopes and prep for April on April6th, already one week into the new month, which of course threw off our calculations. We decided there and then, that’s not something we want to get in the habit of doing.

Adjustment: We decided to change our CLOTHING category from a zero-based monthly budget (use it or lose it) to one that would roll-over from month to month and hold a balance. We just realized that some months go by where we buy noclothes whatsoever, whileduring others, we have a special occasions and need to make more purchases than normal. So, a roll-over account for CLOTHING makes more sense for us right now.

What We Learned in Month #3

Highlight: We had a special trip this month and created a cash envelope just for that trip. We were both a little worried going into it that it might be a kill-joy to have a spending limit, but if anything, it increased our joy. How? Well, we really felt a sense of freedom, knowing exactly how much we had saved up for this occasion, and we enjoyed the process ofintentionally choosing how to spend it. And when we camein under budget, we decided to put that extra money toward an air-boat ride back in Orlandowhen my friend Gina was in town! I think we enjoyed it all the more knowing it was money we had already set aside for something special.

Challenge: When we make purchasesonline, we still move the money over from its envelope to our BANK envelope, just to be able to account for it as well as experience a physical transaction take place. However, we fell out of that habit during the month of April. Oopsie! That’s something we’re committed to remedyinggoing forward.

Adjustment: If I find a gift that is perfect for someone, I like to buy it there and then, even if their birthday or special occasion isn’t for another few months. So, just like we decided to change our CLOTHINGbudget from a zero-based one to roll-over, we decided to do the same with GIFTS. Those are our only two roll-over categories right now.

Our Biggest Takeaways

Now, if I could pullout a few golden nuggets of wisdom that we’ve gleaned through the first 3 months of ourcash budget journey, here’s what I’d highlight, dear reader:

1. Make it your own.

I really can’t stress this enough.

When it comes to budgeting, you need to figure out what works best foryou and your family. Some families decide to cut up the credit cards and pay foreverythingwith cash. (And I mean everything.) Others don’t use cash at all, but carefully record every transaction on paper or using an online budgeting toollike Every Dollar orMint.com.

For us, we developed a system where we pay for most of our fixed expenses with credit cards and most of our unfixed expenses with cash. But we’re continually adapting the system as we hone in on what works best for us.

2. Keep clear lines of communication.

I think the key to makingthis system our ownhas beenclearcommunication between Mark and me, not only at our monthly check-in meetings, but throughout the month. We’ll discuss struggles we’re having with certain categories or ideas we have for improvement. We’ll run big purchases by each other or even share small triumphs, such as, “I didn’t stop at Starbucks today because I wanted to save that FUN MONEYfor the Fringe Festival!”

Even if you don’t have a partnerthat you’re budgeting with, I’d recommend writing downsome of that communication. Seeing your progress in writing will help keep you accountable to yourself, as well as give you something to look back on with pride!

3. Give yourself grace when you mess up.

It’s not a matter of “if” you will mess up, but “when.” We messed upa lotthese past three months, be it forgetting our envelopes at homeagainor waaaaay underestimating our grocery budget and needing to call an emergency meeting mid-month to allocate more funds.

A Word of Encouragement

If budgeting or trying the cash envelope system is something you’re considering, I hope our story inspires you to give it a go. Even though we still have a lot to learn, these past 3 months have felt like financial leaping after years of shuffling through the mud.

So, don’t wait until it’s convenient. And don’t wait until you can do it perfectly. Truth be told,it’s never going to be convenient nor will you ever do itperfectly.

But if you’re willing to get back up again after you stumble and fall, well then, prepare to LEAP!

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