A Couple Who Paid Off Their $192K Debt Swear By The 'Cash Envelope System'

Amanda and her husband Josh say they paid off their combined debts in three-and-a-half years and attribute it to the trick that helped them curb their unnecessary spending.

Amanda told Making Sense of Cents that she and her husband had a total debt of $AUD192,344 that was made up of 16 students loans, eight credit cars, two vehicles and a personal loan.

“Nearly half of our debt was my student loans from my associate’s and bachelor’s degrees," Amanda said.

The couple attributes paying off their combined debts to an increase in both of their incomes, with $AUD107,846 coming from raises, working overtime and being paid penalty rates from being on call during that time.

“Nearly half of our debt was my student loans from my associate’s and bachelor’s degrees." Image: Getty

They further cut their expenses and made sure their budget stuck, didn't take any big holidays and put a hold on pricey hobbies.

Yet anyone who has received a pay increase knows, this makes you more likely to spend more instead of doing the sensible thing and putting your money towards your savings or paying off your debts.

And Amanda and Josh say they used a simple budgeting trick that they still use today to ensure they weren't blowing their hard earned cash.

They called it the 'cash envelope system'.


Each payday, Amanda and Josh would take out money for groceries, petrol, spending and any sinking funds they were saving for.


The money in the couple's electronic account then went solely towards paying off their debts. It's smart, because handing over cash is mentally so much harder than giving someone your credit or debit card.

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Amanda worked out exactly how much money she and her partner needed for groceries, petrol and other spending each month to create a 'zero-based budget'.

This means you assign every dollar a purpose. The balance of your bank account ends up being near zero at the end of the month and every dollar has been 'optimised' to go where it really needs to. Clever.

Featured image: Getty