What to do with Leftover Money from the Cash Envelope System

Posted by Joyce Marrero Zahariadis on

The cash envelope system is by far one of the best money management tools. It’s not only easy and straight forward to use, but it can honestly retrain the way you think when it comes to spending.

Cash inside Envelope - Cash envelope budgeting

If you’re the type that doesn’t really think before you spend, you can greatly benefit from the system, which requires you to rely on a set amount of cash you have tucked into an envelope for that expense.

One question people often have when using the system is what do you do with leftover money from the cash envelope system?

I’m glad you asked. There are actually quite a few things you can do.

If you have debt, you can use the leftover money to pay down the balance faster. Obviously, the faster you pay off your debt, the quicker you’ll have more money to spend each month. Also, the faster you pay off debt, the less you’ll pay back in interest.

Don’t have an emergency fund?

Use the leftover money to build a safety net. Everyone should have an emergency fund.

This is money that is used to cover the truly unexpected emergencies that come up in life. It might be an injury that puts you out of work or an unexpected job loss. Whatever the reason, it’s good to have an emergency fund in place.

Another great use for the money is to roll it over to the next month. There will be months where your variable expenses are higher than others. For example, you may spend more on groceries during the holiday season.

Lastly, you can use the money for something fun. Put the money into a vacation fund or treat yourself to a new book. Either way, it will be an incentive to spend less and less each pay period.

The leftover money from the cash envelope system can be used in a variety of ways. It’s just another great reason to use this money management tool.