Armando’s Envelopes

Armando’s Envelopes

“Fail to plan, plan to fail,” the old adage goes. Most of us don’t plan—don’t begin to budget—so it shouldn’t come as a surprise that there’s often not enough month left at the end of the money.

My wife and I have found it a real blessing to be guided in our financial affairs by Armando David Vacca, an awesome Christian financial planner ( One of Armando’s best pieces of practical advice is to create an envelope system by which to manage our finances. The idea is simple enough: predetermine what your expenses will be for the month, take the money out of the bank and put it into envelopes, a different envelope for each: rent or mortgage, car payments, food, entertainment, and so on.

Spend all your clothing budget on the first of the month and you can’t buy more shoes or socks until next month.

This system works on two levels: First, it ensures that you don’t overspend and, second, it gives you a real appreciation for money. Seeing a stack of $20s, $50s and $100s at the first of the month provides you with a more tangible relationship with your money, one that isn’t possible with pre-authorized withdrawals. Seeing two pristine fifties can’t help but make you more aware of their intrinsic value and make you much less likely to spend them.

Last year I designed a book called “Where’s My Cash?!” by Stu Woolley.  It’s a super-funny account about accounts receivable if you can imagine such a thing. The thing is, right up to the end—right up to when it went to print—I kept calling the book “Where’s My Money?!” not “Where’s My Cash?!” It’s not just that I preferred the alliteration, it’s the fact that most businesses which have accounts receivable don’t get paid in cash. THAT’S WHY THEY HAVE ACCOUNTS RECEIVABLE!!! Money in the form of cheques, credit card payments and electronic file transfers, yes. Cash, no. Not unless you’re in retail and even then it’s getting less and less common.

Cash is something we’ve lost touch with.

We need to reconnect with it.

We need to feel it.

And make it real.

Because our attitude towards it makes a real difference.

Posted in: Mad Money

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