Using a cash budget, say we save $100 for household items.

Typically, we would withdraw $100 from the ATM, put it in an envelope, and then later, go to home depot or walmart or wherever and buy an item for $20.

Now I want to buy one item from Amazon.com (or anywhere online).

What is the best way to handle this? Do I go re-deposit the cash? Do I leave money in my bank account in case I need to buy something online?

I'm looking for strategies to track that $100 and be able to buy items online.


Get another envelope for "items purchased online." When you make a purchase online, pull out the equivalent amount of money from the proper envelope (household, gifts, entertainment, etc.) and put that money into the "items purchased online" envelope. (The amount grows as you purchase things, which is opposite of the other envelopes, which get spent down as you purchase things.)

Then, the next time you fund your envelopes, withdraw the difference of what you have in your "items purchased online" envelope, and then add that to what's in the "items purchased online" envelope, and fund your envelopes as you normally do.

Example: Let's say you buy $25 in DVDs from Amazon and $85 in clothing from Kohls.com. You'd take $25 out of your Entertainment envelope, and $85 from your Clothing envelope, and put that $110 in your "items purchased online" envelope. (The rest are cash purchases.) If you fund your envelopes with $500 each period, then you'd withdraw $390 ($500 - $110), empty the "online" envelope, and fund your envelopes as usual. Now your "online" envelope is zero again, and you rinse and repeat.


You can have account on paypal.com and debit card, connected to your bank account. Once you want buy something for $100 on Amazon with this debit card, deposit this sum in cash to your bank account, and then use the debit card to pay, the debit card would take it from the account. Of course, that requires discipline of not using the card when the cash envelope is empty, but since it's debit you will see the effects immediately.

If you do many small purchases, you could group them, or keep track of them separately but it's additional complication. Paypal will track the purchases so you'd know how much you spent this month as thus how much cash you should have re-deposited.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.