You love the method of using envelopes to keep track of your spendings and to budget, but the idea of walking around town with cash makes you uncomfortable. I understand that especially for a woman, who chooses to go on a shopping spree alone to have some well-deserved me-time this may pose a potentially dangerous situation.

There are, of course, a number of other reasons why you may prefer not leaving the house with multiple envelopes stacked with your hard earned money.

Whatever your reason may be, there is an easy alternative to it: using the envelope budgeting method without cash.

That’s right. Same fundamental concept, one single little adjustment. But, it still requires discipline to follow through. I find this method to ask for a tad more discipline and will power than its cash counterpart.

Without further delay, let’s get started on how to implement this budgeting method.

1. Create a Budget

As with any good financial plan, you must start with a budget. You may think that you have a pretty good idea of your spending needs and wants and how much money comes in with your bi-weekly paychecks, but truth be told, most of the time we are very wrong about these things. 

So,  putting them down black on white and forcing ourselves to look at the numbers is what really kick starts our motivation to live more frugally, to cut unnecessary expenses and to gain control of our finances.

List all of your expenses and how much they are per month. List all of your automatic payments coming out of your account every month to make sure you know how much money needs to stay in the account to cover those bills without going into overdraft.

Next, decide which categories your expenses fall into. Depending on your family dynamic they can vary, but the most common ones are:

  • Groceries
  • Toiletries
  • Public transportation/gas/car maintenance
  • Eating out
  • Cosmetics

2. Use the (Cashless) Envelope Method

Now it is time to put your accounting cap on and do a little math. Decide how much money should be designated for each of your budgeting categories. 

Label each envelope with one category and its corresponding amount. When you are ready to use this system, make sure you keep each receipt and add it to the proper envelope. 

Write down the amount of the total sum you spent on either the outside of the envelope in list form, subtracting it from the amount designated to this category. 

Or you can keep an extra list inside the envelope with your receipts, just make sure this list and the receipts add up, that you don’t lose anything and that when you have reached your budget limit you stop spending money in that category.

The tricky part is to be honest and strict with yourself in following this method. It is easy to get a little lax about the rules when you do not see the physical money vanish in front of your eyes.

Also, I have noticed that more and more stores offer email receipt options. This is great for saving paper, but can add an extra layer of confusion when trying to keep track of expenses and receipts.

3. Electronic Cash Envelope System

Speaking of email receipts and the ever-growing world of e-commerce and everything digital, there are also digital options for this cashless envelope system that will help you stay on track with your budget and finances.


Is an app and website based budgeting system that works on Androids, iOS and your computer. You set up your monthly budget using as many envelopes as you need. 

You then sync it to your bank account and credit cards to manage your money anywhere and anytime.

It has a feature called auto-transaction syncing, which helps you keep from overspending by showing you how much money you have available to spend.

This digital budgeting system comes with a monthly fee of $6 with a free trial period.


This is a budget app that is virtually set up to act as the physical version of the envelope system.

You create your budget, decide on your categories and amount each category gets and you would use the app to take money out of each envelope as you spend the money.

This app offers a free version that includes ten envelopes for your budgeting needs. If you are in need of more envelopes, the paid version will provide you with more, plus other features to help you stay on track with your budget.

Final Thoughts

It is always nice to have options available when trying to figure out the best way to make positive changes in your life and to take control of your finances.

Keeping track of those spendings is hard. I know. Everything costs money and for some reason the prices only ever go up, very sneakily and without much notice. That is something we cannot control.

But what we do have the power to control is how we manage our hard earned money more efficiently.

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