Personal Finance Challenge - April - Use Cash Envelopes

Welcome to the Living That Debt Free Life 2019 Personal Finance Challenge!

If you are new to budgeting, paying off debt, and managing your finances, you’ve come to the right place! I’ve compiled 12 monthly challenges to get your 2019 financially on track.

Each monthly challenge contains one of the many steps I’ve taken to help me pay off debt faster.

If you’ve been paying off debt for a while, the information in these challenges is probably nothing new to you.

But, if you’re one of the hundreds who ask me each month how I’ve managed to pay off so much debt, then this is going to be so helpful to you!

The challenge is completely free to join! Each month, we’ll complete the challenge together and chat about it here on the blog in the comments down below and on Instagram.

I’ll announce each monthly challenge here on the blog and on my Instagram Page.

If you are participating, please feel free to leave a comment down below and let me know how it’s going! And, be sure to tag your challenge-related IG photos with #TDFL2019Challenge, so I can find you and cheer you on!!

Ready to get started?! Here’s this month’s challenge!

For all the monthly challenges, click HERE.

April 2019 - Use Cash Envelopes For Your Budget Busters

This month’s challenge is to use cash envelopes for your problem budget areas. Yes, real live cash envelopes.

If you have done the rest of these monthly challenges, then you have tracked your expenses, made a zero-based budget, and eliminated one recurring expense from your budget.

If you haven’t done the previous month’s challenges, that’s ok. You can complete these challenges at any time. If you want to, complete the January, February, and March challenges first, before forging ahead to April.

If you’re ready to get started, here’s what you need to know!

Create Your Budget

Before you even think about using cash envelopes, you may want to go back and revisit some of the prior monthly challenges—especially January’s challenge, which walks you through setting up a budget. I have been using a zero-based budget for years, and for me, it’s the only way to go. This method is truly a game changer when it comes to paying off debt and being in control of your money. You’ve got to have a budget in place before you really have a good idea of how much cash to allocate to any particular budget category. So if you haven’t made a budget for the month of April or for your most recent paycheck, get that budget done, and then come back here for this month’s challenge.

Here are some posts about budgeting that will help you create a budget that you can actually stick to:

Eight Simple Tips for Sticking to Your Budget

Five Sinking Funds Every Budget Needs

The Budgeting Routine That Will Change Your Life

Track Your Spending

For this month’s challenge, we are going to focus using our cash envelopes on our budget busters—those problem categories where we tend to overspend. But how do you know what areas you’re overspending in?

If you’ve been doing these challenges with me from the beginning, then you’ve also tracked your spending as part of February’s challenge. If you have been tracking your spending regularly, you may already have a good idea of what categories you’re spending too much in.

If you haven’t tracked your spending, you may have no idea what your problem areas are. To get a feel for your problem areas, you should start tracking your spending. You may want to complete February’s challenge before tackling this April challenge. February’s challenge is all about tracking your spending, and even includes a free expense tracker to help you get started!

Another option is to simply pull your bank statements from the last few months and review them. Look over your spending. Categorize each expense. What do you spend money on each month that you should probably cut back on?

If you’re married, ask your spouse. I guarantee he or she can tell you what you spend too much money on!

Also, think about the areas where you spend that make you feel guilty. Is your beauty/hair/nails budget out of control? Make it a cash envelope. Do you spend way too much on groceries each week? Use a cash envelope for that.

Cash Envelope Categories

I can already tell you that most of us spend way too much money on entertainment, clothes, and food (that includes groceries and eating out). Below is a list of categories to consider using cash envelopes for:

• Groceries

• Eating Out

• Entertainment

• Clothes

• Beauty/Hair/Nails

• Fun Money

• Pets

I like to use cash envelopes just for the categories where I tend to overspend. For me, it’s fun money and eating out. (Fun money is money that I can spend any way I want to—a new bubble bath or candle, a journal, a magazine or book, whatever—it’s just to have fun with.) Review your expenses, identify your problem areas and commit to using cash envelopes for just those categories in April.

How To Get Started

Once you’ve made your budget, allocated an amount for each category, and decided on your envelope categories, simply label the front of the envelope, place the cash in, and you’re ready to go. At a moment’s glance, you’ll know exactly how much you have to spend in any given category.

I like to stick an index card in my envelopes to record my transactions. I also like to keep my receipts in the envelopes until I can record the transactions if I can’t do it at the exact moment I make a purchase—that makes it easier to record the transactions later and keep track of them if I want to review them later on.

And, let me just say—you absolutely don’t have to spend money on buying cash envelopes. Any old regular envelope will do. But if you do want to use some cute envelopes, all of the envelopes featured in this post are available for download here!

Tips For a Successful Cash Envelope Challenge

• START SMALL. Commit to choosing just 1-2 to start. Choosing too many can be overwhelming to manage—especially for a beginner.

• LEAVE YOUR ENVELOPES AT HOME. Leave your cash envelopes at home until you’re ready to use them. One complaint people have about using cash envelopes is that they don’t like to carry “all that cash.” Then don’t! The beauty of not having your cash envelopes with you all the time is that it will help control any impulse spending. When you’re ready to go to the grocery store, grab the Grocery envelope. About to get a haircut? Grab the Beauty/Hair/Nails envelope. Otherwise, leave those envelopes at home!

• GIVE YOURSELF GRACE. Realize that, like with anything else, you won’t be perfect the first time you do something. Give yourself some grace and allow yourself to be a beginner. Fight the urge to just give up too soon. Keep trying and see how this system can really work for you.

Ready to start using cash envelopes? You’ve got this!!!

Don’t forget to tag your social media photos with #TDFL2019Challenge!! I want to encourage you and cheer you on this month, and I want to see those cash envelopes.

Then meet me back here next month for May’s challenge! Good luck, everyone!! You’ve got this!!

Oh! And, as always for bonus points, complete January’s Challenge and February’s Challenge, again this month, in connection with April’s challenge. That’s what I’m going to do!