I remember when my grandma's envelope system actually worked in the 90s

Back in 1998, my grandma lived on a fixed income and used this beat up green tin box with 6 envelopes marked rent, food, gas, bills, savings, and fun. She'd pull out her Social Security check, cash it at the bank, then split the cash into those envelopes every single month. I saw her do it for 12 years until she passed in 2010. What got me thinking is how people talk about digital budgeting apps and spreadsheets now, but that simple envelope method kept her from ever missing a payment. She had exactly $37 left for fun each month, and she'd spend it on bingo or ice cream at the diner downtown. I tried doing the same thing with actual cash envelopes last year but I keep getting tripped up when online bills auto-draft from my checking account. Has anyone else had trouble mixing modern automatic payments with old school cash envelope systems?

2 comments

2 Comments

harper_smith24d ago

Prepaid debit cards basically let you do the same thing without the cash problem.

jason95820d ago

Whoa, hard disagree on prepaid cards being the same thing. @harper_smith , I don't think you're giving the envelope system enough credit for what actually made it work. The whole point of the cash envelopes was the physical act of counting out that $37 for fun and realizing you couldn't buy both bingo and ice cream because that would bust your budget. A prepaid card is just another piece of plastic that hides the pain of spending behind a screen and a swipe. You don't feel the same sting when you tap a card as when you hand over actual bills, and that sting is what keeps people from overspending. Plus with cash, you can't overdraft or have a transaction fail after you thought you had money left. I'd rather just keep a separate checking account for my auto-draft bills and use cash envelopes for everything else instead of relying on a card that still requires me to check a balance online.