Finally want to know where the heck your money goes every month? Grab some popcorn, pull up a chair and check out this post.

I’m not going to give you some nifty facts or statistics about how young professionals like yourself have a hard time saving money. I don’t need to. WE ALREADY KNOW.

But what you probably don’t know is the awesome efficiency of the envelope system, a hands-on visual tool for saving tons of money. It’s basically the best thing since sliced bread, especially for people who just can’t stop spending.

But why hands-on? Why not use convenient digital solutions like or any one of the million online budget planners? Well, studies suggest that may be exactly why you can’t save money! Recent research suggests that consumers pay up to a whopping 18 percent more while using a credit card instead of cash, which most online budget users tend to do.

Swiping a card is easy—you never see the money leaving your wallet. But cash? Over time, you develop an intimate relationship with your $10s and $20s. People tend to spend less when they use cash, making it easier to save more and stop overspending.

Do you want to stop worrying about how you definitely can’t afford to buy a round of drinks, even if it is happy hour? Do you want to stop cringing every time you pull your wallet out for a burger and fries? Do you finally want to know where the heck your money goes every month?

Well, then, grab some popcorn and pull up a chair, folks. It’s about to get real.

How the envelope system works

The envelope system has been around since the black-and-white days of your grandparents—and probably longer (there’s really no way to know). In recent years, money expert Dave Ramsey has championed the system and has helped thousands of families and people get on track with their finances.

Simply put, the system is a money-saving method that involves dividing your paychecks/cash into labeled envelopes like “rent,” “gas” and “groceries,” and spending only what you have allotted for that time period (about a week or two).

Once you run out of money, THAT’S IT. No dipping into your grocery fund to buy The Hobbit on BluRay or pulling out a few $20s from your rent before you go out on Friday night. You gotta wait until your next paycheck.

Here’s how to set it up. First, buy some envelopes. Next, identify every single monthly expense you have and write each one down on a separate envelope. A sample list might include:

  • Rent
  • Utilities
  • Gas
  • Groceries
  • Eating out
  • Clothes
  • Gym
  • Miscellaneous
  • Tithe
  • SAVINGS (Stuff this envelope with every spare dollar!)

Next, you’ll need to get chummy with your local bank teller, because every time you get paid, you need to go directly to the bank and withdraw every dollar (there are a few exceptions—rent, for example), then take it home and divide up the cash into your envelopes. Bada boom, that’s it.

Sounds easy enough, right? Well, if it was easy, you’d already be out of debt with a nice little retirement fund set up. Setting up the envelope system is the easy part; sticking to it is hard.

Preparing for difficulties

Here’s the biggest problem you’re going to run into: once you run out of money in an envelope, you’re done.

None of that dipping-into-other-envelopes thing. Did you wake up Thursday morning to find you’ve already spent your week’s budget for eating out? Get used to a sack lunch! No more clothes budget? Stay away from the mall!

You almost certainly won’t be able to stick with everything exactly as it is in your budget, at least for the first little while. But that’s okay! Don’t get discouraged. Changing your financially oblivious money behaviors from years ago doesn’t happen overnight.

Creating a solid budget (because that’s really what the envelope system does) and savings account (one that actually works) is the calling card of the truly savvy, self-controlled, wise young professional. As of right now, there are far too few of them.

The perks of a successful system

There are far too many perks to count, but let’s review some of the coolest ones that will set a fire under your behind and really get you going:

  • You’ll finally be debt-free.
  • You could finally move out of your parents’ house.
  • You’ll have an extra chunk of several $100s more each month.
  • You could be a millionaire by 50.
  • You can buy a round of drinks without blinking an eye.

Bottom line: the envelope system will prevent you from overspending on worthless junk and prepare you for buying a house, investing and retiring. Think that’s a long way off? Tomorrow you’ll be 40. Let’s go; there’s no time to lose!

Stop sitting around and start being awesome. Buy your envelopes, identify your bad money behaviors and kick your student loans in the face while you save up for a nice house in the suburbs. It’s all possible—your road to financial success starts here.

Anthony Moore discusses post-college awesomeness on his website,, and on Twitter. He’s not much different than you: roguishly attractive, dashingly sophisticated and a lover of fine eateries like Wendy’s and Domino’s.


  1. Bridget

    Love this system! As soon as I got my first job in high school my Mom taught me this. Thanks!


    • Anthony Moore

      Anthony Moore

      Isn’t it a great system? Thanks for the feedback, Bridget! (Love the blog, btw!) -Anthony

  2. Devin Walker

    Very good advice Anthony. I always look forward to reading anything that you write. You have such a bright future man!


  3. CareerAvoidance101

    Nice work, Anthony! I used this system myself for many years, with great results. One trick I found – which you may categorize as “cheating” but… – was to lump more than one category together in an envelope. That gave me some flexibility about how I wanted to spend my money during any given month; my financial habits did shift around (e.g., one month I might go shopping a lot but eat out infrequently). Feeling like I had some “choice” in the process helped me to perceive the envelope system as being less strict, enabling me to stick with the system. I guess it comes down to trial & error – you have to work with the envelope system to make it your own!

    • Anthony Moore

      Anthony Moore

      Great thoughts! I’m definitely going to try that out. Maybe lumping my groceries/eating out/food stuff together…

  4. Kevin

    And if u live in San Diego, get rid of the gym envelope, go outside and run, buy a few weights to keep in your room, and get an exercise ball to work your glutes, back, and abs…problem solved.

  5. AmyChin

    The cashless version of this system is called The Bucket System: It’s the 21st century version of the envelope system and works better for those of us who prefer not to carry cash around.

  6. Rene'

    Thanks for the advice, Dave Ramsey 😉

  7. Ask the Young Professional

    Great job, Anthony! I always love reading your posts. You’re writing style keeps me going 🙂

    I’ve been trying to set up a full-proof system to save up for a new phone, an external hard drive, a tablet and an adventure fund. I think I’ll start using the envelope system for these 4 things. I like getting the little bit of interest in my bank account and the ease of automatic payments. I think the envelope system can be a great pairing here.

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