I think this is a great system. Saving is as much psychological as financial. I, personally, would get nervous that I would forget where the envelopes were or that I was missing out on getting even the small amount of interest from my savings account, but I’ve made it sufficiently difficult to access that savings account (different bank, takes 3 days to get anything) that I don’t dip into it unless I need it. Whatever system works for you, use it. I’d totally spend whatever cash I had on hand.