“Well, if you use the cash envelope system for discretionary categories, how do you handle buying stuff online?” 

Here are three ways we handle this:

– I bought a book the other month.  It cost $15.  It was near the end of the month, so when I created the new monthly budget, I simply marked $15 from the blow money I would have received as “already spent” so I didn’t get paid out that money.  It stayed in the bank account to pay for the book I purchased.

– I bought a new holster the other day.  We’ve created a “to deposit” envelope just for these occasions.  I simply put the money for the holster into the “to deposit” envelope.  If we get to the bank before the end of the month, we’ll deposit whatever’s in that envelope.  Alternatively (and more often), we’ll use the money in that envelope to fill next month’s envelopes.

– Lastly, if you know in advance some of your discretionary spending will happen online, simply leave that money in the bank and don’t cash it out, but you have to keep track of it!  Nancy has been trying Harris Teeter Express Lane shopping, where you pick out groceries online then just drive through and pick them up.  They only take credit card or check, though, whereas we always use cash.  She’s kept some food money in the bank account each month to cover the “express lane” trips to the grocery store instead of cashing it all out.