Can you relate to any of these scenarios…

  • After leaving the office late after a long day at work, you are STARVING. You think through what you have to eat at home, but the idea of making dinner just seems too much. You’re exhausted. So you run through your mental list of delivery/pickup options, open your mobile food delivery app, and order. Just that easy.
  • A friend tells you about a new book she read, and it sounds amazing. You really want to read it, so you open Amazon to check it out, and then “click”, you hit one button and the book will be at your doorstep in 2 days. Why wouldn’t you just get that book when it took less than 10 seconds for you to order and delivered to your home? It feels so satisfying.
  • You’re trying to save money, but then you get a text from a friend asking if you’re free for brunch. Even though you know it’s not in your budget, you go because… friends and mimosas. ‘Nuff said. You open up your phone, order a Lyft and promise yourself you’ll make up for this somewhere else in your budget later.

It is SO easy to get the things we want. We swipe a card, click a button, open an app or simply point our phone to get almost anything our heart desires at our fingertips! We don’t even realize how much of our hard-earned money is leaking away from us with these mindless swipes and clicks.

If you find it hard to stop impulse spending, you are not alone. There is help, though. There is a tool you can start using today that will help you get immediate clarity into how much you are actually spending and get you to stop impulse spending without any uncertainty on where you are with your budget on your part.

When you find yourself thinking, “Signing up for this one yoga class won’t make a big difference to my budget,” you will have instant visibility into where you are with your budget and if you should drop that cash. Best of all, this tool is free, it is SUPER easy to use, and it keeps you honest and accountable to yourself in no uncertain terms.

This tool is the Cash Envelope System.

The Cash Envelope System is a foolproof way to make sure you actually stick to your budget.

How Does the Cash Envelope System Stop Impulse Spending?

At the highest level, you commit to spending in cash, and when your cash is gone, you’re done spending.

Whaaaaaat????? That’s crazy talk!

“Like, duh… is this a joke?” you might be thinking to yourself.

No. This is no joke. While this may seem unsophisticated… or even a bit patronizing, it is not meant to be. There is, literally, no more powerful way to get your spending under control if you are willing to be open to the idea.

Basic? Yes. Powerful? Like nothing else.

To break it down further, you will create one envelope for each area of your budget: groceries, eating out, clothing, toiletries/cosmetics, gas, etc. Exclude fixed expenses like rent, utilities, insurance and savings goals that must be paid every month, no matter what.

After you have an envelope labeled with each spending category, place the amount you have budgeted to spend for that month in that envelope in cash. If you have a $250 budget for groceries, put $250 in cash in an Envelope labeled “Groceries”. Carry this with you in your wallet or purse. I even recommend you leave your credit card at home to remove temptation while you are building your new budgeting habit.

You can spend freely until it’s gone. When it’s gone, you lay low until the next month or budgeting cycle when you can refill it.

cash envelope system with cash

Why Does This Work?

This system literally retrains your brain to think about money in new ways. When those moments come where you have to decide whether to spend or not, it all of a sudden becomes very real—in a way that swiping a credit card or flashing Apple Pay can never offer.

This system gives you the structure to stay within your budget when new temptations to buy “just this one thing” show up in your life.

The Case For a Credit Card

I can already hear the wheels in your mind turning:

  • What if I have an emergency? I need my credit card.
  • But I get points on my credit card. I’ll lose points by spending cash
  • Getting cash is a pain

You may be thinking “Can’t I just do the same system by using my credit card and tracking my spend?”

If you have struggled in trying to stop your impulse spending before, then I venture to say that you’ve tried this method, and it hasn’t worked. And you’ve probably heard that the definition of insanity is doing the same thing over and over and expecting different results, so…

There’s something psychological and visceral about the touch and the feel of money and the visual aspect of watching your money leave your hands that makes it more concrete in our brains and in our bodies.

Even if you are a die-hard credit card fan, I recommend you try the cash envelope system for three months. You will be amazed at how this simple method can totally transform the way you think about money.

The cash envelope system will fundamentally change the way you think about impulse purchases.

It will give you clarity and awareness about money that will serve you—even if you ultimately opt to return to your favorite credit cards with points.

Cash Envelope System Challenge to Stop Impulse Spending

I invite you to challenge yourself to try the Cash Envelope system for 90-days to give yourself a new perspective on spending and a new relationship with money.

If you haven’t created a budget yet, download our Monthly Budget Worksheet to get started today.

When creating your own Cash Envelope System to stop your impulse spending, you can use any envelope you have in your house, or add a little style to your system with these colorful and durable cash envelopes that won’t get destroyed in your bag.

Give it a try and leave a comment how this worked for you.

Stop Impulse Spending Dead in Its Tracks With the Cash Envelope System

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