How to Use Dave Ramsey’s Envelope System

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It can be so easy to spend money using a debit card, it can also lead to overspending. Using Dave Ramsey’s envelope system can help you save money, keep expenses in order, and stay on track.

Using Dave Ramsey’s envelope system helps you categorize your money for different budgets, you keep your well earned cash in envelopes and tuck them away until they are needed. This method is so easy to use and it’s a great way to monitor the cash you have left from each category after bills are paid.

To give a better understanding here is how the system works: The envelope system is here to save your were you may bust through your budget with things like groceries, gas, clothing, and restaurants. You don’t have to save up money to start the envelope system either, you can start right away.

Maybe you spend $400 on groceries every month, you’ll take out $200 from your bank account and add it to the “groceries” envelope. You’ll do the same with the next paycheck, there you have it; that’s your grocery envelope. The money in your groceries envelope does not come out to pay for anything else other than groceries.

When you are heading out make sure to bring along each envelope you’ll be using on that trip. If you’re getting groceries, gas, and take out then make sure you’ve got your grocery, gas, & restaurant envelopes with you. It is important that you use your envelopes only for their intended use to help keep you on your budget.

Don’t cheat on your individual envelopes. The most tempting thing about Dave Ramsey’s envelope system is borrowing money from one envelope for another. So if you’ve run out of money in your restaurant envelope it is important not to dip into your grocery envelope to cover a sporadic meal out.

At the end of the month if you have money left over in your envelopes then you’ve had a successful month! You didn’t go over your budget so you can either reward yourself with this left over money or you can add it to one fund or split it between all your funds for the next month.

If there is an emergency and you absolutely have to use some of the money in other envelopes then make sure to sit the family down and let them know the new budgeting plan. Look through for ways to adjust the budget that you and your family will agree on. If everyone is in the know then everyone can be on board with the system. If you’re single and trying the system for the first time, ask someone for help so that you’ll stick to it. Ask someone to hold you accountable for your envelope system.

Dave Ramsey set up the envelope system to keep you on on track with your spending to budgeting ratio. Dave Ramsey’s Envelope System may take a month or two to get use to but when you do you won’t stop implementing what you’ve learned from the system.