Author: 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!
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 $300 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.
Congrats on becoming almost debt free. Paying off $75K is a huge accomplishment.
I took the FPU class a couple years ago too but I haven’t embraced the envelope system yet. I ‘be been resistant ????
Great idea to include the tabs in your wallet.
Thank you! We jumped in with both feet and really got down to business. Having those debts gone is a HUGE burden lifted <3 Good luck on your road to financial freedom!
I have no idea what this system is. I’m guessing it’s a way for you to pre-designate your money so that you don’t overspend in the wrong areas. Which makes a lot of sense. I love your pretty solution to your dilemma. Now you have the best of both, a budget and a real organizer. Visiting over from Sweet Inspiration we thank you for joining us. Pinning and sharing this great idea
You’re exactly right in your assessment Mary! :-) Thanks for stopping by! See you next week :-)
I switched to zip lock bags the small snack size that also works.
Interesting! I was trying to get back to using a regular wallet, so that’s why I was searching for something different. Glad you found something that works better than those flimsy envelopes! :-)
Great idea, but if that’s your ID card in the wallet, you might want to crop it off or cover it over. Most of the info including dates, is clearly visible – a gift for ID theft.
I was just noticing that too! It didn’t look all that clear when I originally put it up, and now it seems glaringly clear! I’ve updated the photo :-) Thanks for looking out!