Envelope Budget System
Keep to your budget with a cash budget and some envelopes
Credit cards may be convenient, but they don't make it easy to stick to a family budget. Live within your means with a cash budget system.
Keep a family budget the old-fashioned way--by spending real money.
An easy way to keep track of your budget and rein in spending is to use cash for your monthly expenses. Start by making a basic budget with a few broad categories. Groceries, clothing, gas, and entertainment are a start. Write each category and the dollar amount budgeted on a small envelope.
Keep enough of your income in your back account to cover bills you pay every month by check or automatic withdrawal, such as housing expenses, utilities, insurance. Of course, include a budget category for savings, both long-term and "rainy day" expenses like car repairs.
Every month after depositing your paycheck, simply take out enough cash for each envelope and spend only that amount until next month.
The envelope system works well for a few reasons. First, it requires you to make a budget, which is the first step to mindful spending (and saving). Second, seeing your cash dwindle and your envelopes grow thinner throughout the month makes you evaluate every purchase carefully.
When the envelope is empty, you're done spending in that category for the month. Try to resist pilfering from other envelopes. If money remains at the end of your spending period, do yourself a favor and add it to your savings. You may find your budget needs tinkering if you're consistently over or under your designated amount.
Cash makes the most sense with this system, but you can also keep track of your credit or debit card expenses with budgeting software. Beware: it's easier to cheat when you're not spending "real money" and it takes more time and effort to record each purchase in a software program.
