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How to Save $1,000 in 6 Months Using Envelopes
In this article I will outline exactly how to use the popular envelope system to save up over $1,000 in six months!
A year ago I wrote about a new way to save up over $5,000 using envelopes in 1 year. You can check out that article and video here!
However, after doing this system myself, I found that it was difficult to stick to it after a few months. It was motivating at first, but was hard to stick to by the end. BUT with that said, I found that it was very helpful to save up during the first 6 months!
This system is a fun way to engage your spouse and children to find ways to cut back on spending and save up cash! You can plan unique ways to spend the saved money to motivate everyone in your family!
In short, to save $1,000 in 6 months, you need to label 50 envelopes from 1 to 50 and pick out two envelopes each week. Fill the two envelopes with the corresponding money and set it aside until you have filled all 50 envelopes in the 6 months. When you complete all 50 envelopes, you will have saved a total of $1,275!
In this article I will go over how to do the envelope savings method, what worked for me, and extra ways to find cash to stuff the envelopes!
YOU MUST ALSO READ:
- How the 70/20/10 Budgeting Rule Can Save You Money Every Month
- 7 Surprisingly Simple Ways to Earn $50 A Day
HOW THE 6 Month ENVELOPE METHOD WORKS
Step 1: Buy 50 Envelopes
Go buy some cheap envelopes at a dollar store and label each envelope from 1 to 50.
Step 2: Shuffle the EnvelopeS
I put my envelopes in a basket, but feel free to place them in any bin where they can be randomized!
Step 3: Choose 2 Envelopes Each Week
The envelopes should be shuffled. Make it a habit to choose 2 envelopes each week. This can be fun for kids to pick out the envelopes and discuss with them ways to find the money to fill the envelopes.
Step 4: Fill the Envelopes and Save Money!
If you chose the numbers $5 and $25, you will need to find an extra $30 that week. Or, sacrifice something that could equate to that amount, that was planned in your budget. For example, choose to eat in one night instead of going out to eat, and put that money in your envelopes!
6 Month Envelope Method vs The Dave Ramsey Envelope System
When researching the envelope system, you are likely to come across many “envelope systems” that trace back to Dave Ramsey.
These envelope systems are different than what is discussed in this article, but I felt it was important to discuss the difference so you don’t get confused!
The Dave Ramsey envelope system has to do with budgeting. As in, it is a cash-based budgeting method where you buy with cash that you place into envelopes. For example, with the Dave Ramsey envelope method, if you have $300 set in your budget for groceries, you must buy your groceries with this cash, which limits you from overspending – and also instills good spending habits.
FAQs About the 6 Month Envelope Saving Method
I don’t carry cash. Can I do the Envelope System Digitally?
This method can get difficult because our culture is transitioning to digital currency. Who carries tons of cash anymore? (No hurt feelings if you do – that’s actually a good thing!)
The reason using cash is the preferred method is because you FEEL the “pain” of setting aside money, compared to simply transferring it and being done. It is far more effective when using physical money.
What are some ways to earn extra money so I don’t have to dip into my savings?
I started using survey sites awhile back and have earned dozens of PayPal cash and gift cards over a decade ago since high school. No joke, this works, but it takes some time to accumulate. Check out my two favorite survey sites below!
I know of people who use dozens of survey sites, but I only stick to two. (With a full-time job, a YouTube channel and a website, I don’t have time to use a ton of apps!). But hey, if you want to double your earnings, check these both out!!
Here is a step-by-step article here about how to start with Survey Junkie!
This method may not be super quick at giving you free cash, but it is definitely helpful for earning money in order over time!
What if I miss out on a week or can’t find enough cash to fill my envelope?
What’s most important is that you are building the habit of saving money and delayed gratification! This is a skill that is critical for anyone wanting to achieve big financial goals or to simply become debt free.
This 6 month envelope savings method is a great way to dip your toe into budgeting and saving money! Plus, it is nice to have over $1,000 at the end of it!
Don’t become discouraged if you miss out on a week. I found myself able to stay motivated through the first few months, then I started “forgetting” to fill my envelopes. Whoops.
What is the best way to spend my saved up cash?
There are plenty of great reasons to save up cash using the 6 month envelope savings method! Here are a few suggestions:
- Pay off a small loan or debt
- Take your kids on a fun vacation
- Buy new home furniture
- Purchase a playground set for your children
- Donate the money to a charity
No matter your situation, make your goal something that your entire family will want to achieve! If you are going to do this for months, you might as well make it enjoyable!
I need ideas to cut back on my spending. What are good ways to save money by spending less?
• Meal prep for that week (save you tons on the grocery bill)
• Don’t buy coffee or other specialty drinks
• Sell something you don’t use on Facebook Marketplace or Ebay
• Offer a simple, paid service to someone you know (mow lawn, babysit, etc)
The awesome part about this 6 month envelope method is that, over time, your brain will start finding ways to save money, rather than it being okay with spending, spending, and spending.
You’ll begin to question if you need to really buy something, and it will help you to stop impulse shopping!
TIPS TO GET THE MOST OF THE 6 Month ENVELOPE METHOD!
- Create More Savings Habits
Building your financial backbone regarding saving more and spending less starts with EASY tasks. I’ve recommended Acorns to my readers for a long time now, and have both written many articles and published videos about it. This platform allows you to save money without much effort, and it has been an asset for me to save extra cash on the side to either put in a savings account or to invest money! [You can learn more about this awesome app on their website, here!] - Read, Read, READ!
This is something I recommended in my article about saving $5,000 in 1 year, but this is something I ABSOLUTELY believe in. Thing is, I actually am not a big reader. But, I have learned an incredible amount of information regarding money, personal finances, investing, and real estate in the past few years simply from listening to audiobooks in the car and glancing through ebooks. I highly recommend you get a library card and start learning more!
I hope you’ve learned a thing or two about how to use the envelope savings method to save up 1000 dollars in a year! I’ve enjoyed doing this money savings system and I hope it can work for you too! Comment below about your experience!