Between the Envelopes

I had a reader ask me, “Are you allowed to use money from one category for another if you have left over cash in an envelope?” She went on to say that her husband had put his foot down that there would be no stealing from the envelopes! If they were going to do the envelope system then the money had to be used for the purpose that they had designated. If they do not use it this month, then it has to be left in the envelope for next month. Now, I confess, I steal from my envelopes all the time. I do. I’m an envelope embezzler. If I’m $5 short on groceries, I have been known to “borrow” from my gas money. 🙂 Or even embezzle some money out of grocery money for a coffee date with a girlfriend. Really I have been doing the cash/envelope system for so long now that I really know my categories. I know what I am sacrificing and what I will need to do to make up for my “embezzlement”. In other words, I’m an expert… don’t try this at home 🙂

It really is a great question though, because the issue isn’t really whether you can use left over funds for a different purpose. The answer is of course, “Yes.” But the real question is, “What is going to work the best for you and your family?” The whole reason you would do the envelope system is to get to relax and not have to track every single expense in a category. It gives you that flexibility, so if you are constantly overspending in a category then you do want to look at what you have budgeted and if it is livable. However, if your issue isn’t in running out in a category and “borrowing” from another, and it is instead having “left-over” in a category and what to do with it, then first of all, what a great problem! Yea for surplus money! In my house, we call that more “date money”. Yet the key is that Matt and I are in agreement. We are both comfortable with just having a little more fun money if we save in a category. Now if it is more than $20, we will usually redeposit that cash and put it into savings. We have a goal for our savings, so any money that we “save” towards that goal is fantastic. Yet, we very rarely will leave cash in the envelopes for the next month for the simple reason that we don’t need it. Our budget covers our needs pretty adequately, so an extra $50 in a category just isn’t really needed. Especially if we already didn’t use the amount from that category from the last pay cycle. In fact, I would look at adjusting your budget down in that category because you might just not need as much as you thought. You could then increase a category that you do need more in, and your husband would be happy because you are not “stealing” money.

Really, if you and your spouse are OK with a little leniency between the envelopes, then there really is no problem. But if one of you is an all or nothing person, then this might not be OK in your situation. You might need to be more strict about the designated cash only going to it’s intended purpose. The real key is to be in agreement and do it together. Discuss what you are comfortable with, or not comfortable with and then keep that discussion open. A budget is not meant to be a rigid rule book for your money. It is supposed to be a vision for your money to help you have purpose and to achieve that purpose. You have to keep talking about where your money is going, and make the necessary adjustments for what is and isn’t working for you. So borrow a little, or keep the money completely separate, but be in agreement and make sure you both know what is happening between the envelopes.