How to use the envelope system without cash

Try the cashless budgeting envelope technique!

You can budget the cash envelope system without cash! Yes, you heard me, cashless. I wanted to dive into this method because not alot of people like to withdraw cash. There are many reasons why some people prefer not to draw out cash. One, not being able to get to an ATM or a bank every paycheck. Fear of accruing an ATM fee from withdrawing too many cash transactions. And I think the biggest one is the risk of having so much cash in your wallet.

Using the cash envelope system was popularized by Dave Ramsey, who teaches the 7 Baby Steps for financial freedom. The basis of his method is a zero-based budget and the use of cash envelopes. Cash envelopes are perfect for people that struggle with their budget and have an impulse to overspend.

Spending physical cash in your hand and feeling the loss is a behavioral lesson. You can get more of an impact on the incoming and outgoings of your hard earned money. The envelope controls overspending. Once the envelope is empty, that is your notifications that it’s done. Disciplining yourself comes with practice.

You must find a budgeting method that works for your situation. I believe that integrating this technique with cashless will make it easy for anyone.

Where do we begin?
First learning the basis of the cash envelope method. To go cashless, you have to understand the workings of the technique. How to keep track without using cash and other ways to do it digitally. Tracking is number ONE! Since everything is cashless, this is how you figure out what’s left to spend. I will be going over each step below.

The Cash Envelope system

I wrote a whole article about this already here. To summarize the strategy, First, you would need to create a budget. Making your budget first tells you money where to go. The Zero-based budget is best when importing the cash envelopes because you need to be at zero. During your budgeting session, you create the budgeting categories, including the cashless one. Next, write down the allotted amounts for each category. Most of the cashless sections will most likely be variable expenses. The most important part at the end of your budgeting is to make sure you end at zero.

The Cash Envelope system

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Here’s an example of a Budget Method Model with the Cashless envelopes

Step One Budget

Step Two Define your Categories

Step Three Fill in the Amounts

Tip: Pay all your Bill’s first before you start to spend the cash sections. Getting Bill’s out of the way will prevent you to take money from a bill on the mistake of not keeping track.

How to keep track of the envelopes

Now that we divided everything up, it’s to spend. Sounds exciting, huh? But we need to keep track. We are going cashless, so there’s no physical connection between you and the depletion of cash. If you don’t keep track, your most likely to overspend.

A good way to keep track is to have a cash tracker worksheet. You can make one yourself on a Google Doc and print it out. What makes a quick tracker? Actually, you can use the back or front of an envelope. You can pretend there’s cash in there for mental processes, lol If you want to have something to track in your wallet, grab some index cards and title each one the cashless category. Other important things to add are the date, the amount spent, and the balance after. Think of it as a balance book for a checkbook. It’s pretty much the same method. At the end of each trip record, your expense.

Tip: If you don’t have the time to write every expense always ask for a receipt. Put your receipts in an envelope or Ziploc and record the expenses at home.

Cashless Envelope Budgeting Apps

You know there’s an app for everything, even for cashless envelopes. Budgeting digital is easier and quicker. The benefits of using the app are to be able to share it with your partner or spouse. In this way, you both can keep track and not going back in forth with the cash. There are two major envelope budgeting apps, Good Budget and Mvelopes.

Good Budget

GoodBudget software mimics the envelope budget. Create your envelopes and set planned amounts. Each time you spend, deduct the expense. Add in your bank accounts import your transactions for accurate tracking. Then you can deduct the spending from each envelope. You can share across all your devices and sync your budget with another—a great way to always keep track of each other.

(Free and Paid version starts at $6)


Another envelope budgeting software that takes the paper out of the plan. Mvelopes start you off by creating your Financial goals that ways to figure out what is most important to you. Next, you can add your account, define your income, and create your budget. Now it’s time to fill your envelopes. Mvelopes let you fill them digitally. Their system keeps track of your spending so you can get an overview of how much money is spent on each envelope.

(Free and Paid version starts at $10)

Well, are you ready to try cashless budgeting? We covered how to divide your budget into categories. After you make your budget defining the sections and allocating the amounts are key. Make sure you are balanced at zero; otherwise, it will fall apart. By not having a zero balanced budget, you can overspend on another section. We discussed keeping track. During the whole process, you have to track every cashless expense. If you forget to write everything down, make a habit of asking for a receipt every time you swipe your card. Save your receipts and balance your tracker at home. Last you can do it all digitally! Leave the paper behind and record your expenses in your budgeting app.

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