A long time ago, in a galaxy far away (Michigan), my friend's grandma used to keep cash in envelopes.
Every time she got paid, she'd cash the check and divide the money into labeled envelopes: "Groceries." "Gas." "Church." "Fun."
When the grocery envelope was empty, they ate what was in the pantry.
When the fun envelope was empty, they stayed home.
No credit cards.
No borrowing.
No exceptions.
And you know what?
They never had debt.
Never really stressed about money.
And never fought about overspending.
Because when the envelope was empty, it was empty.
That system worked for 50 years.
But here's the thing: nobody carries cash anymore.
#technology
And yet, the system itself is solid.
Every dollar has a job, and once it's gone...
It's gone.
So let me show you how to do the same thing with your debit card.
The Problem With How You Budget Now
Right now, you probably have money sitting in your checking account.
You see the balance and think "I have $1,200, so I can afford this $40 dinner."
Then you buy groceries, gas, and coffee.
And more groceries.
And another dinner out.
And suddenly it's the 20th of the month and you've only got $20 left and you're thinking "where the hell did it all go?"
There's no structure.
No limits.
Just a vague sense of how much money you have.
|
you, figuring out if you can afford gas this month |
The Fix: Digital Envelopes
Here's what you do instead.
At the start of the month, divide your money into categories—just like grandma did with her envelopes.
Groceries: $400
Gas: $150
Eating out: $100
Entertainment: $50
Personal care: $50
That's it.
Those are your envelopes.
Now, every time you spend money, you deduct it from that category.
Bought groceries for $80? Your grocery envelope now has $320 left.
Got Chipotle for $15? Your eating-out envelope now has $85 left.
And here's the rule: When an envelope hits zero, you're done spending in that category.
No borrowing from other envelopes or putting on a credit card.
You're done.
Cook at home and enjoy your rent.
How To Actually Do This
You don't need physical cash. Y
ou just need a way to track categories.
Option 1: Use a budgeting app (I like Dollar Wise.)
Every purchase gets assigned to a category.
The app shows you what's left.
Option 2: Use a spreadsheet.
List your categories and track every purchase.
Subtract as you go.
Option 3: Use your bank's existing features to create "buckets."
Allocate money into buckets, and move it back as you spend.
If you really want, you can probably open separate accounts with dedicated cards...
But that's probably overkill.
What Happens When You Use This
The first time your eating-out envelope hits zero on the 15th of the month, you're gonna be pissed.
Good.
That discomfort is teaching you something: you've been overspending on eating out without realizing it.
Now you know.
Next month, you either allocate more money to eating out, or you slow down and make it last.
Either way, you're not overspending anymore because you CAN'T.
The money's not there.
And that changes everything.
When you can SEE you only have $30 left for eating out, you don't order DoorDash at 11 PM.
You make a sandwich.
When you spend $40 on one meal and realize "damn, that's 40% of my monthly eating-out budget," suddenly that meal doesn't seem worth it.
You start asking: "Is this worth half my budget?" Usually, the answer is no.
The Rule You Have To Follow
Can you borrow from another envelope?
Technically, yes. It's your money.
But if you constantly borrow, you're defeating the entire purpose.
The rule is: when it's gone, it's gone.
If you keep breaking that rule, the system doesn't work.
You're just shuffling money around with extra steps.
So try really hard not to borrow.
Only do it for real emergencies.
Not "I really want pizza" emergencies.
Actual emergencies.
Why This Works
The envelope system works because it creates boundaries.
You can't overspend if there's no money left to spend.
You stop stressing about "can I afford this?" You just check the envelope.
If there's money, yes.
If not, no.
Black and white.
My friend's grandma knew this 50 years ago.
She just used envelopes and cash instead of apps and debit cards.
Same system.
Same results.
Allocate your money at the start of the month, and track it as you spend.
Stop when you hit zero.
That's it.
It's not sexy, but it works.
If you want help tracking your spending by category and seeing exactly how much you have left in each "envelope," Dollar Wise makes it stupid simple.
Click here to start tracking and finally stop overspending.
You got this, Pookie.
Taquitos,
Caleb "Empty Envelope" Hammer
P.S. The first month you use this system, you're gonna run out of money in at least one category way earlier than you expected.
Don't get discouraged.
That's the wake-up call.
Adjust next month and keep going.
And if you're overspending on entertainment...
You can get one month FREE of Hammer Elite when you click here.
New shows every week-day, member's only bts, and more.
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