I thought I would share a little about the cash envelope system, including the how and the why for you here on my blog. A little back story as to how I stumbled on this system for budgeting. I say I stumbled onto this system because it was all pre wifi and I had no idea about the Dave Ramsey system, which has helped thousands of our American cousins get out of debt across the pond!

When I had my eldest, I was in my early twenties and pretty much penny-less! We were living in social housing and receiving income support. Back then child maintenance was only £10 per week, and I had an undiagnosed Asperger’s child with sensory issues. So, making money stretch to cover holidays, clothing that my child could cope with wearing, Christmas and still be able to put food on the table too.

Ok fast forward to present day and after a hiatus of using our flexible friends to pay for everything, tapping to pay and chipping and pinning, we made the decision to learn to live within our means and begin saving in earnest. We want to save a big deposit to purchase a house. We cannot do that with how we were spending up until the end of January.

Our income is split into segments. We have weekly allocations of our income which needs to cover standing orders, subscriptions and direct debits. This money is deducted from the money in hand amount and then our cash expenses are worked out from the balance.