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Tired of Overspending? Try the Envelope Method!

September 09, 2019
hand taking money out of envelope

Tip of the Week

Consider the envelope method for budgeting, using cash placed in labeled envelopes for many of your monthly expenses.

2 min read

Did you know the 50-30-20 method of budgeting isn’t the only budget in town? (Don’t get us wrong, we still love it.) But you may also want to know about the envelope method for budgeting. It substitutes cash—yes, real cash—for many of your monthly expenses. Here’s why you might consider it as an alternative: Actually seeing and handling cash can act as a brake on spending.

Read on and we’ll describe the envelope method in detail.

Jargon Hack

What is a budget?


An estimate of your income and expenses for the month or year, used to plan your financial life.

Find out

Tactics and considerations:

How to use this method:


Your total take-home pay each month is $2,000.

Fixed ExpenseAmount
Student Loans$200
Total Amount$1,200

Fixed expenses: continue paying monthly fixed expenses as usual.

Variable ExpenseAmount
Food & groceries$300
Personal care items$50
Household expenses$50
Total Amount$800

Variable expenses:

Over time, make adjustments to your categories to reflect how you live. For example, maybe you spend more on entertainment than you thought, and less on household expenses. Or maybe you find you have money left over in some categories. Feel free to put that into your savings envelope.

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By Stash Team

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