- The cash envelope system.
I actually really like this method
but there's a better, more modern day tool
to help you execute this system
and I'm gonna take you in my bank account
so that I can show you what that is and how to use it.
Here's the problem with the current cash envelope system.
You're smart, so you wanna start saving $300 a month
for any future car repairs that might pop up.
You also wanna start saving $100 a month for a vacation
you're gonna be taking in the next 12 months
and then you also wanna start putting $75 a month
aside for your little sister for a trip she's going on.
You really wanna help her out with that.
And then, you also wanna put another $100 aside
for a yearly insurance premium so you can start
capitalizing on those savings
by paying once or twice a year.
Where in the world are you gonna house all this money
as you start saving it up every month?
In an envelope?
And then if you do decide to put it into a bank account,
how are you gonna keep it separated
and organized based on each different fund?
That's the problem that I faced when I was paying off
my $82,000 in debt and I wanted to start
saving up for different types of funds.
Sure, you can put it all into a bank account
and then keep it separate based on a spreadsheet
that you are keeping outside of the bank,
but that's kind of annoying.
If you do use the outdated, old-school cash envelope system,
then after 12 months you'd have roughly $7,000 in cash.
Just sitting in your underwear drawer.
And if you don't wear underwear, your sock drawer.
And if you don't wear either socks or underwear,
you're a monster and you probably already bury
your money in the ground anyways,
so this doesn't matter for you.
Now before I show you the tool that I use in place
of the cash envelope system, I just wanted to say
that I really wouldn't be mad at you
if you did use the envelope system.
I'm okay with that.
While you definitely can have success with that method,
I personally think that it's a very inefficient
and unsafe way to start setting money aside
for future purchases in the 21st century.
One more thing to mention before we hop into my computer,
I wanna say that I have zero affiliation with this bank.
No affiliation at all, other than I have a bank account
with them and a credit card and I guess they do
kind of pay me in credit card reward points,
but not really because they want to
because I pay my balance off at the end of every month
so, they actually probably hate people like me.
This tool is offered by PNC
and the tool is called Virtual Wallet.
And what I really like about Virtual Wallet
is it's almost like three separate bank accounts within one.
So it's got a Spend account, Reserve account
and then also a Growth account.
Now, the Spend account I use as a checking account.
The Reserve account is where I use my envelope system,
if you will.
And then I don't even touch the Growth account
because that one's weird where you can only
do so many withdrawals a month
and then you start to get charged.
It's something with the federal government, I believe.
I don't think it's PNC, but I don't even use that
so that's not even worth talking about.
Now we'll go into my Reserve account so I can show you
what my electronic envelope system looks like.
You're seeing all the inner workings.
Don't make fun of me because of how poor I am, okay.
I did move some money because you don't need to know
how much money I have in my freaking account.
So looking at the Reserve account,
it's pretty cool because you can create
any kind of little fund that you want.
So essentially you take whatever amount that you want
from your Spend account and then you deposit it into
this account, this Reserve account.
So as you can see, there's $5,000 it's unallocated.
So I can spread that $5,000 among
any of these little funds that I have for myself.
So let's just say, hey so for your everything else
emergency fund, whatever that means Jarrad you weirdo,
we're gonna throw $500.
Whoops, not 505, 500.
Now one thing to note why you're seeing a dollar
in each of these accounts is because you have
to have a minimum of one dollar
in each of these little funds, if you will.
So that's why there's one dollar.
The only way to get rid of it is to delete the little fund.
So as you can see, I took from that $5,000
I put 500 of it right up there into this account.
You can do the same with all the other accounts.
You can go in and you can actually start deleting
accounts, right, so I can delete this car insurance fund
'cause I can say, screw car insurance.
I'm never paying car insurance ever again.
So I can just delete it and it's gone.
It's gone forever.
And then, you can also start adding them.
So if I'm like, you know what, I wanna save up
for a trip to the Bahamas even though
I don't like the beach.
I like the woods.
I'm gonna still save up for a trip to the Bahamas.
Ba, don't make fun of my spelling.
I can't spell very well.
(Jarrad laughs)
Baha...
I don't even know if there's one M, two Ms.
Whatever, just stop, okay.
We're just gonna continue.
There's no spell check.
(Jarrad sighs)
All right, there's my $500
and then it deducts it from there.
So then as I need certain, or as I need this money
from these particular funds, that's when I can transfer
it over to my Spend account and I can spend it.
So I love this tool.
It's one of my favorite things ever.
Leave a comment down below and let me know if you
know of any tools that can be used in the same way
or if you like the cash envelope system,
then let me know why.
Thank you so much for taking some time
out of your busy day to check out this video.
I hope you found some value in it.
I would greatly appreciate a Like, Comment
or Subscribe, or all three, that way I know you enjoy
these videos and the content I'm putting out
and the things that I'm teaching.
Until next time, I love you so much.
Probably more than Spartan Races,
I actually really love Spartan Races.
All right, I'll talk to you next time.
Adios.