The Dave Ramsey envelope system has helped millions of people pay off debt and live a better life; myself (and my husband) included! But after 4 years of using the envelope system I was fed up with the flimsy paper, the tearing, and the fact that I had to carry such an ugly wallet!
So I came up with a simple, no-sew alternative to the Dave Ramsey envelope system that cost less than a dollar and works even better than the original!
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Early in our marriage my husband and I made some foolish money decisions that have cost us far more than just the money it's taken to repay the debt.
Those decisions plagued every moment of our lives for the following 8 years and we are only just now coming out from under all that debt with the help of our family blog!
Many people had mentioned Dave Ramsey's method of budgeting to us, but we always blew them off. Oh how I wish we had listened sooner!
Finally, we started working the Dave Ramsey system, and I even further worked to save money by developing my own Food Budget System that allows us to eat an all organic diet for $188 a month!
Now just a few years after finally making these changes we have paid off over $75,000 and are almost completely debt free!
But as perfect as the envelope system is in theory the practical application of the idea left a lot to be desired.
I gave up my beautiful leather wallet and replaced it with this rather dull looking blue one that came with the Financial Peace kit. For a while the sacrifice seemed worth it, but I wish I had figured out this method option sooner!
The paper envelopes tear easily (and you need to buy new ones), you can't keep change in the appropriate folders because it falls out, but there isn't a separate pouch to store the change, so it just ended up at the bottom of my purse. There was also nowhere to put ID card, debit cards, or membership cards... so they too littered the floor of my purse.
Every time I needed my ID I had to dig through my purse, hoping I could find it quickly. It was so embarrassing. Finally, I sat down and figured out an alternative.
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No-Sew Alternative to the Dave Ramsey Envelope System
Since I had a beautiful leather wallet from my grandmother, I knew I wanted to figure out an alternative to the envelope system that would work with an existing wallet.
And since I had a newborn, I wanted to make sure that whatever idea I went with was a no-sew, easy and quick method that I could throw together in 5 minutes or less!
Step One:
I went to Target and grabbed a plastic folder in red (my favorite color, pick your favorite color for yours!). It cost $0.98 and I actually have enough left over to make another one!
Step Two:
Then I measured the size of my wallet, marked the size with sharpie, made tabs and got to cutting.
Make sure that you are staggering the tabs along the top as you cut so that you can see all the labels once you're finished.
Step Three:
Place all the dividers in order of tabs, then label them with a sharpie starting with your most used category on the left.
From there, I just slipped the dividers into my favorite wallet and labeled them appropriately.
Now I have a place for my change, all my cards, photos of friends and family, and I still get to keep my money organized by category!
Plus, the smooth plastic material helps the money slide much more easily and makes having separate categories much easier to manage.
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4 Year Review
Updated: I've been using this method for about 4 years now, and I can say without hesitation that it is a thousand times better than the original paper envelope system.
My purse is clean, I can find things quickly, and I never lose my drivers license! I'm absolutely in love with this new method, and I hope you enjoy it too.
Hope says
Excellent idea! What do you use to track each expense? It looks like you could slip your receipts in the categories to track later.
Victoria says
Hi Hope, good question! I generally don’t track my expenses on paper. I know I should, but we make a budget, fill the envelopes, and just keep a mental track.
You can absolutely keep the receipts in the different sections though, depending on the give in the wallet you are using. :-)
LIsa says
This is a genius idea! Thank you! I’m putting it to use today in the wallet my aunt gave me (which has my falling apart envelopes in them :-)
Victoria says
Hi Lisa!! I’m so glad I could help! Enjoy!