How to Budget with Envelopes

What is the Envelope System?

The envelope system is a budgeting technique that involves using cash for your spending. Instead of using debit and credit cards, you place cash in labeled envelopes for each budget category. When the cash runs out, you can’t spend any more in that category until you replenish it. The envelope system is a great way to stay on budget and keep your spending in check.

Creating Your Budget

The first step in budgeting with envelopes is to create your budget. Figure out how much money you make each month, and then decide where you want to allocate it. This could include expenses like rent, food, transportation, entertainment, and savings. Once you’ve determined how much you need to allocate to each category, you’ll know how much you need to put in each envelope.

Gathering Your Envelopes

You’ll need to gather enough envelopes for each budget category. You can use paper envelopes, or you can purchase envelopes specifically designed for budgeting. These envelopes often come with labels that you can use to label each envelope. You can find them online or in stores that sell budgeting supplies.

Filling Your Envelopes

The next step is to fill your envelopes with the cash you’ve allocated for each budget category. Make sure to label each envelope with the name of the budget category and the amount of money in the envelope. This will help you keep track of your spending.

Using Your Envelopes

Once you’ve filled your envelopes, you can start using them. Whenever you need to make a purchase, take the money out of the envelope for that budget category. When the envelope runs out, you’ll know that you’ve reached your spending limit for that category. This will help you stay on budget and keep your spending in check.