How to make your own budget binder for the cash envelope system

Key points

• Budgeting binders can help you keep your finances organized, especially if you’re using the cash envelope system.
• There are many different ways to set up your budget binder, including “DIY” approaches or by downloading worksheet templates.

The envelope budgeting system is a cash-only method that’s popular among people who prefer to avoid using credit cards or are working to pay down debt. This zero-based budgeting approach helps you avoid spending more money than you’ve allocated to each spending category every month.

In lieu of a budgeting app, a budget binder for cash envelopes can help you stay on track with this plan. Here’s how budget binders work and a few budgeting binder ideas you can consider.

What is a budget binder?

A budget binder is essentially a day planner for your money. It allows you to keep all of your money management plans and paperwork in one place and keep everything organized in a way that works for you.

“It makes the whole process more tangible,” says Tom Drake, founder of MapleMoney, a Canada-based personal finance website. “A budget binder involves manual budgeting and tracking of spending and possibly even cash envelopes to break out that budget.”

You can keep your cash envelopes in a binder for easy access and also use the budget binder to plan and keep track of the following:

• Monthly income and expenses.
• Other recurring expenses, such as auto insurance or yearly subscriptions.
• Savings goals and your progress in reaching them.
• Your debt payoff plan and progress.
• Other short-, mid- and long-term financial goals.
• Important financial documents.

Depending on how strictly you want to manage your money, you can keep your budget binder simple or develop a comprehensive filing system.

How to create a budget binder

There are a lot of different budgeting binders out there, so it’s important to take the time to consider multiple options and choose the one that works best for you and how you want to manage your money. Here are some ideas to consider:

Stick to the envelopes

If you want to keep your budgeting plan as straightforward as possible, you can simply use a box or filing cabinet to store your cash envelopes. Each envelope will represent a different spending category, and you’ll assign a specific amount of cash each month to that category.

This won’t make it easy to plan and keep track of other financial goals you have, but it could be a good starting point if you’ve never focused on money management and are feeling daunted by the process.

If you want a little help keeping your envelopes organized, there are budget binders available for purchase online that include “envelope” pockets, expense sheets, labels and more.

Use a three-ring binder

With a three-ring binder, you can use the pockets on the inside of both covers to keep general plans and goals for your budget and separate tracking for income, expenses, specific goals and your progress toward them, receipts and anything else inside the binder.

You can also purchase dividers with labels to keep things separate. Keeping all of your envelopes in the binder is also an option, and you can even use dividers to split up each spending category. Depending on how comprehensive your financial plan is, though, keeping everything in one binder may make it too unwieldy.

Consider a file box or cabinet

If you want to be detailed with your financial plan, you may consider going all out with a file box or filing cabinet. You can then buy folders and label them with each area of your plan. With more room, you can even expand what you include in the “binder,” including your:

• Cash envelopes.
• Income and expense tracking, including receipts.
• Savings goals.
• Debt payoff goals.
• Loan documents.
• Insurance policy documents.
• Retirement plan statements.
• Brokerage account statements.
• Estate planning documents.
• Tax returns.

That said, you can also keep a lot of the documents that don’t require your attention regularly in a separate file box or cabinet and keep your budget binder less complicated.

Download templates or create your own trackers

Once you’ve decided what type of budgeting binder you want to have and what you want to include in it, you’ll want to either create your own tracking worksheets or download online templates.

A lot of budgeting templates are designed for Google Sheets or Microsoft Excel, which isn’t conducive to having everything on paper. Also, note that some websites may charge money for these templates or require that you pay for a course to access them.

As a result, you’ll want to research a lot of different options to determine which ones are affordable and work best for your system.

Focus on the budgeting style that works best for you

There are a lot of different ways to budget, including both physical and digital options. As you try to determine the best fit for you, consider a variety of options, including a budget binder with or without cash envelopes, a digital envelope system, spreadsheets, budgeting apps and more.

“Budgeting apps can help someone stay on top of all their finances with less effort,” says Drake. “For some, this automation of budgeting and expense tracking will do a better job of keeping them on top of their bill payments and spending limits.

“Whether you’re using a budget binder or a budgeting app, the best option is the one that you’ll stick with.”

Examples of budgeting apps include:

• EveryDollar
• Fudget
• Goodbudget
• Honeydue
• Mint
• Mvelopes
• PocketGuard
• Wally
• YNAB (You Need a Budget)

The process of figuring out the best approach for you can take time, but as you work on improving your financial situation, it’s worth it because having the right system in place makes a huge difference in the long run. Also, keep in mind that while one approach may work for you right now, you might need to switch to something else in the future as your financial situation improves and becomes more complex.