The envelope hack that saved me hundreds


Every month the wife and I review our budget and notice that our food line item is always out of control. Similar to that of a hangover, we find ourselves not really knowing what happened, what we ate all month long or how much we should budget for the next month. I tried tracking things on my bank statement, but the darn statement doesn’t tell me what food I purchased. It only tells me where I spent the money if I used my card.

I’ll admit, being the frugal geek that I am, I was a little embarrassed to share this story due to my lack of control on this topic. That being said, I am happy to report, I have a trick that really helped me get my grocery bill in order.

I found, by separating the month’s grocery expenses into 4 envelopes helps me track my expenses as opposed to just swiping the plastic.

As an example, let’s use $400. Grab four envelopes, divide the money out into each envelope and write out each week on the front.

  • Week 1
  • Week 2
  • Week 3
  • Week 4

(I normally get the cash from the ATM at the beginning of each month).  Also, you’re going to want to keep the grocery receipt after each purchase. Put the receipt in the corresponding week’s envelope so you can track what has been spent. This helps me identify the particular items I bought.

I try to only go to the grocery store on the same days twice a week. So, I only need to remember to grab money on the days that I go to the store. This is where the envelope strategy really shines. See, if you slow down and think about your daily purchases at the beginning of each day you act in a manner that puts you in control. I discovered,  I spend lots of frivolous money on things I didn’t need at the grocery store (especially when I am hungry).

Having a finite amount of money each week forces me to calculate each purchase. And even say no to the treats that tempt me while at the checkout. This little trick saved me nearly $100 my first month of doing it.

I first heard about this system from Dave Ramsey’s book The Total Money Makeover. At first, it was just too tedious making an envelope for every purchase. So I scaled down and just applied this method to the one category I struggled with.

I am happy with the results. Please share your money hacks with me. I am always anxious to learn more ways of making each penny last longer.

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