How Do You Get Out of the Credit Card Cycle and Onto the Envelope System?

(Psst: The FTC wants me to remind you that this website contains affiliate links. That means if you make a purchase from a link you click on, I might receive a small commission. This does not increase the price you’ll pay for that item nor does it decrease the awesomeness of the item. ~ Daisy)

By the author of What School Should Have Taught You

Let’s say that you’ve heard over and over again about the benefits of using the envelope system when it comes to saving money. Your personal finances at the moment are really something of a wreck, and you’re taking a hard look at what you can do to be as financially responsible and independent as possible.

The envelope system is just one of the tools that you’re looking at using to make this happen.

But you’re facing something of a problem. You’ve relied on your credit card as your main means of paying for things on a monthly basis, and you have to keep money in your bank account to be able to pay off your credit card bill at the end of the month.

You could withdraw cash for the creation of an envelope system this month, but then you wouldn’t be able to pay off your credit card bill. And by the time you build up money in your bank account again, you’ve already racked up more purchases on your credit card that you had to use because you had no other means of paying for things.

These weren’t frivolous purchases either. It’s not like you’ve been going out every night buying drinks and going on shopping sprees. You’re having to pay for things that you really do need. You needed your groceries, you needed a new pair of shoes, and you needed to fix the dripping kitchen sink.

If this is where you find yourself, here are a few tips that will help you to get out of this vicious cycle so that you can get onto the envelope system to regain control of your finances.

What can you sell? 

Look around your house right now. Are there items that you have that you can live without that will give you a good chunk of change? Let’s say there’s a treadmill sitting in your exercise room that you never use. You know that you could easily get $500 out of it.

Why not put the treadmill up for sale, take the $500, and use that as the seed money for your envelope system? You could then divvy that money up amongst your monthly cell phone envelope, your clothes envelope, your electricity bill envelope, and maybe a bit into your car maintenance envelope.

Selling things isn’t necessarily fun, but being in a financial train wreck isn’t either. It’s actually a lot less fun than having to sell something.

So take a solid look around you and view things through the eyes of making an investment. Will getting your finances on track save you money? Absolutely. You’re investing in yourself. Whatever that tangible item is that you can sell will “cost” you a few hundred dollars in the immediate, but it will pay off dividends in the long run.

And then, when your finances are under control, should you want another treadmill, you’ll be able to purchase one and keep it without having your bank account starve.

Can you work your way into the envelope system slowly? 

Let’s say you’ve sat down and calculated how much you need to budget for every category of your life. You’ve figured out car maintenance, health insurance, homeowner’s insurance, mortgage, loans, groceries, healthcare, and so on.

Now, you’re sitting back and staring at that legal pad at the thousands of dollars that you need every month to just keep your house in order. How on earth are you going to withdraw a month’s salary from the bank without making it so that you’re incapable of paying your bills already sitting on the kitchen table?

I don’t think you necessarily have to.

One possibility is to look at easing into the envelope system. Be rigid in insisting that you are going to be fully on the envelope system by X day, but I don’t think you necessarily have to do everything at once. Why not say, “Okay, this month, all are clothes purchases, and groceries are going to rely on the envelope system. Next month, I want to add in car maintenance and insurance.”

This will get you onto the envelope system without breaking the bank in a sense.

I don’t think it really matters how you get onto the envelope system, just as long as you do it. And if taking baby steps is the only way you’re going to get there, then, by all means, take the dang baby steps.

Make some drastic cuts. 

Let’s say this is only just for a month or two. Can you shop at Goodwill for your clothes, go without any restaurant purchases, and shop for the cheapest groceries you can find for 60 days? You will still end up with the necessities of life, but you’ll have drastically cut the amount of money that you’re spending. This will then leave you with more money in the bank to get onto the envelope system.

Is it fun? No.

But, again, being broke isn’t either. If eating a heck of a lot of pasta is the way to get there, then eat the pasta. You can get back to eating your filet mignon when you’ve got your finances in order. This isn’t a permanent thing. You don’t have to do this forever (you can if you want to, of course), but you do need to take the steps that will enable you to achieve the financial independence you need.

The envelope system is a killer means of saving money. 

I’ve written before about how this was one of the ways I lived on less than $20,000 for a year. You can definitely do this. But there are actionable steps that you have to be intentional about taking to get there.

But what are your thoughts? Do you have other tips? Have you broken the credit card cycle? If so, how did you do it? Let us know in the comments below.

About Aden

Aden Tate is a regular contributor to and Aden runs a micro-farm where he raises dairy goats, a pig, honeybees, meat chickens, laying chickens, tomatoes, mushrooms, and greens. Aden has four published books, What School Should Have Taught You, The Faithful Prepper An Arm and a Leg, The Prepper’s Guide to Post-Disaster Communications, and Zombie Choices. You can find his podcast The Last American on Preppers’ Broadcasting Network.

How Do You Get Out of the Credit Card Cycle and Onto the Envelope System?
Picture of Aden Tate

Aden Tate

About the Author Aden Tate has a master’s in public health and is a regular contributor to,,,,, and Along with being a freelance writer he also works part-time as a locksmith. Aden has an LLC for his micro-farm where he raises dairy goats, a pig, honeybees, meat chickens, laying chickens, tomatoes, mushrooms, and greens. Aden has two published books, The Faithful Prepper and Zombie Choices. You can find his podcast The Last American at Preppers’ Broadcasting Network.

4 thoughts on “How Do You Get Out of the Credit Card Cycle and Onto the Envelope System?”

  1. For many years, I got paid once a month – I loved it. Paid the bills and knew exactly what was left until next pay day. Following that, twice a month and now every two weeks.
    I wholeheartedly concur with selling off “stuff” and it doesn’t have to be “stuff” you don’t use, could be that you rarely use AND aren’t likely to need anytime soon/could borrow if need be.
    Let’s face it, it is great to have the time to scour for best prices but in reality, those struggling financially may not have a lot of extra time either. But if the person does, a short term gig/job could also be seed money for an envelope(s). While I am not suggesting said person spend even more, a good sale (we all should know what a good sale is because we watch prices) might be worth spending a few dollars (not tens/hundreds) to get ahead on an item or two.
    Finances are like body weight – you didn’t get that way overnight and you’re not going to get out of it overnight. Patience is key as well as not beating yourself up.
    Do realize that interest rates were kept too low for too long. It is not inconceivable that rates could be at 5% by the end of 2023. This affects the minimum payment on your credit card so the sooner you can stop charging and concentrate on paying off, the better.

  2. The ability to use (or convert to) the envelope system is likely to be very short-lived. I’m seeing some heavyweight financial writers forecasting that the switchover to Dementia tyrant Biden’s all digital money may begin as early as this coming mid-December. 90% of the world’s central banks have climbed onto the cashless all-digital money bandwagon. Their deal with the devil (aka ever growing governments that want no limits on their spendthrift obsessions) will be the ability to digitally counterfeit digital money in an electronic instant to steal purchasing from the population to benefit both governments and oligarch buddies of such central banks. The first receivers of such freshly counterfeited money get the early benefit of the lowest price for goods, assets, real estate, etc BEFORE that new money can ripple through economies to push up prices to rip off the rest of us. [It’s called the Cantillon Effect.]

    Centuries ago such counterfeiting by individuals was a death penalty offense. The US 1792 Coinage Act included such a penalty. The British government learned the hard way that when their king raised taxes (to fund his favorite war) that had a painful effect on the population that they rebelled and beheaded him. So the Bank of England was created in the 1690s so it could steal purchasing power from the population by counterfeiting so the vast majority of that population would have no idea how they were being looted — while there would be zero accountability when the central bank committed that formerly death penalty offense.

    In 1912 secret British money was shipped to the US to buy that presidential election for the socialist Woodrow Wilson who the British were sure would sign off on the Federal Reserve Act, the Income tax, and intervention in the coming European civil war — all of which Wilson did. And that was all done in the pre-electronic era. Today’s introduction of all-digital money (during which physical cash will be made worthless) will ramp up the ease of central bank counterfeiting of money to feed the bottomless appetite of ever-growing and spend-happy governments.

    The long sorry history of fiat money is that governments ALWAYS have been unable to resist debasing such money to destruction … and all-digital money merely greases the skids of that historically documented government obsession. That’s why I think the usefulness of the paper envelope system as described in today’s article will be very short lived.


  3. I agree that cash will be gone sooner than we think. But what I do is write down all of my purchases I make from my debit card under different categories. I keep my spending around
    $125 a week by tracking what I spend. It’s the same principle: just use writing instead of using the cash. Only use credit for emergencies ie my car repair person will not accept cash. So if it is over a certain amount, I will use my cc, but I make sure I write a check when I get home. Sometimes the cc company gets 2 or 3 checks, but that’s ok. I use it because I get cash back, so I am making money in a way. I keep around two thousand dollars in cash around also for emergencies.
    This works for me.

Leave a Comment

Your email address will not be published. Required fields are marked *

New From The Frugalite


Related Posts

Malcare WordPress Security