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The ‘old-school’ Spanish trick to save money — and how it works

By Ion Axinescu • Updated: 24 Apr 2025 • 22:57 • 2 minutes read

The ‘old-school’ Spanish trick to save money — and how it works

The “envelope method” has been passed down from Spanish grandmothers. Credit: Drazen Nesic, Pixnio

With the cost of living rising and a future of economic uncertainty, many people are searching for smarter ways to manage their money and hopefully save a little at the end of the month.

In Spain, one ‘old-school’ savings method has been making waves in recent weeks, according to El Español. The technique is known as the “envelope method” and has been passed down from Spanish grandmothers.

How does it work?

This traditional approach involves turning away from digital payments in favour of cash. When you receive your monthly income, you have to set a specific budget for each spending category. From groceries, rent, and utility bills to transport, entertainment, and even unexpected expenses. You can add as many categories as you want, depending on your lifestyle and monthly expenses.

Then, for each category, you prepare a physical envelope with the assigned amount in cash. Once that envelope is empty, you’re done spending in that category for the month.

And how do you save money? For example, if one day you have a budget of €50 for food and go to the supermarket and spend just €45, you put the remaining €5 back in the envelope instead of spending it elsewhere. At the end of the month, you see what’s left in each envelope, gather the money and set it aside — that’s your savings.

It’s all about discipline

The system is simple and is based primarily on discipline. It’s about resisting the temptation to reallocate leftover cash or dip into other envelopes unless absolutely necessary.

This method is also used by José Rodríguez Cuadrado, who is a financial expert and author of the book Si No Llegas a Fin de Mes Es Porque No Quieres (If You Can’t Make It to the End of the Month, It’s Because You Don’t Want To).

The “envelope method” encourages financial awareness and makes you see (literally) every euro you spend. Using just cash and putting it in the envelopes limits impulsive or emotional spending.

But why is it working again?

Many years ago, the Spanish grandmothers used pens and a notebook to track every expense. That’s not the case today, when you can keep this principle by using budgeting apps in order to simplify the process.

The envelope technique is about saving money, but also about changing bad habits. You are somehow ‘forced’ to have more careful consumer behaviour and it’s easier to get a clearer picture of where your money actually goes.

In times of financial stress and uncertainty, sometimes the smartest solutions are the simplest. Old Spanish tricks might be the ‘secret’ to modern-day financial peace of mind.

Ion Axinescu
Written by

Ion Axinescu

Ion is a journalist with over a decade of experience, including previous work for Vice Romania. Since relocating to Spain in 2022, he has brought a strong sense of place and curiosity to his work with Euro Weekly News. Passionate about football and enthusiastic about all aspects of Spanish culture, Ion covers local news, lifestyle, and cultural features—delivering engaging, accessible storytelling that connects with readers across communities.

Comments

    • Margaret Smith

      25 April 2025 • 08:33

      Nothing Spanish about it. This method is as old as the hills. My mother did this all her life, my aunts did it, my grandmother did it. Actually it a very simple method and more should try it. The biggest problem we have today is household debt and one of the main reasons is because we use credit card, debit cards, and when I first saw this happening many years ago with all the young smart people going into shops and tap tap tap tapping away their cash without any thought I said to myself this will not end well and I was right, many people are so heavily in debt because of their tap tap tap habit. Get the envelopes out now and save and use cash. Cash is incredibly important as you know what you are physically spending and you soon realise the wallet is getting a bit thin. Use CASH always and get out of debt quickly.

    • Jacqueline mason

      25 April 2025 • 14:29

      The downside is burglars.

      • Robert Smith

        26 April 2025 • 07:21

        This is a true story and it backs up what you said except when my mother passed away my sister went straight to my mothers home and took every envelope in the house because she knew our mother put money away every week in her envelopes and jars. Quite sad but a fact.

    • Colin

      25 April 2025 • 16:35

      This is called Jam Jar accounting. Some credit unions in the UK even have Jam Jar accounts to help people budget. Money is apportioned to each jam jar account and can only be used for that purpose.

    • SP

      26 April 2025 • 07:49

      Let’s reach for one of those “old” but ultimately ineffective solutions to cover up the uncomfortable reality: despite all the loud proclamations about economic growth, rising rents, food prices, electricity and water costs, along with new fees and taxes, continue to push the majority of working-class people deeper into poverty.

    • SJ

      26 April 2025 • 08:49

      No amount of envelopes will resolve a lack of money. Once again people are being told “buy fewer coffees if you can’t pay your rent” when the truth should be “buy fewer space rockets if you can’t pay your staff”

    • Raymond

      26 April 2025 • 13:21

      My wife used this method when I was teaching in Lleida. She would put each bill’s monthly payment in an envelope, and pay on the due dates. We were able to budget our expenses and had enough saved to go on a short vacation.

    • Alan

      26 April 2025 • 15:04

      I had a sister the same as you Robert. She robbed me and my brother of hundreds of thousands, took control of the bank accounts too towards the end. We didn’t have a leg to stand on.

    • Lolly

      26 April 2025 • 17:13

      I do this with a spreadsheet, a credit card., which is cleared every month and a small amount of cash.

    • Sandy

      26 April 2025 • 20:34

      Shame the Government didn’t do this, instead of wasting billions of taxpayers money and nothing to show for it

    • Tony

      27 April 2025 • 06:47

      It’s all about self discipline. Whether it’s cash or card/phone spending only what you have to. Bills are paid by D/ D usually a similar amount each season. So more in winter. Food should be the same each month. You can only eat so much. Checking prices as you buy. I have often spoken to people who don’t look at prices. How stupid is that. Having a coffee out twice a week won’t break the bank but having an unnecessary meal with it will make a big dent. Is it that important to eat out. Many people do several times a week and wonder why they don’t have any savings. Starbucks will cost you double why go there? I find that by using a debit card my savings build up quicker. I only use the credit card for booking flights etc. I allow a similar amount each month with occasional adjustments and am able to easily monitor my cash flow without a chart. Utilities are a major expense. So I had solar panels fitted. Reduced my bills by at least 1/3rd. Also reduced my income tax and Suma. Mains gas is a big saver as well. Shopping around for petrol/diesel saves. Currently there is a petrol station near Torrevieja. Petrol is 1.25€ a litres. Cut back on going to shopping centres. Primark for example will eat up any spare cash and ask yourself do I really need it?Also when shopping don’t pick up stuff you don’t need. Crisps, chocolate, sugary cakes or cans of beer. You don’t need them. Water is so much better for you. Look at other people how fat they are then look in their trolleys filled with unhealthy and unnecessary stuff. It’s not difficult to save you just need discipline.

    • Xavier Matheu

      27 April 2025 • 14:31

      I,m 64 yearls old and got a Spanish Passport. It’s the first time I hear about it. This things happen when you use this type of soutces…

    • Jane

      27 April 2025 • 15:59

      Envelope system

    • T

      01 May 2025 • 16:52

      Monzo pots is the digital version, it my method and it’s great, it also teaches discipline.

    Comments are closed.

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