Finding the time and energy to budget can be hard sometimes, but budgeting doesn’t have to be stressful if you have the right system in place. One way to easily budget and save money at the end of the month is to use the envelope budgeting system.
What is the Envelope Budgeting System?
The envelope budgeting money management technique uses envelopes to keep track of how much money you can spend for different categories each month.
This is a traditional method used by the previous generations, and it can be extremely effective especially if you are a person who works better with something tangible in front of you.
The envelope budgeting system is a cash based system, that doesn’t require cards or using bank accounts.
Here is how to use the Envelope Budgeting System:
- Create categories and come up with a budget
For expenses you have, group them into categories and label the envelopes accordingly. Examples of categories are bills, rent, groceries and other. Then allocate a reasonable monthly budget for each category so you have a limit of what you can spend every month.
2. Add Cash to Envelopes
Once your budget is set for each category, cash out the necessary amount and place them inside each envelope accordingly.
3. Spend Wisely
When paying for your groceries, or bills, take the cash out of the respective envelope and use it to pay, and save the receipt inside for better tracking.
Any money left you can add it to the next month’s envelope or put it in your savings account, or a savings envelope.
Are you ready to start budgeting? With these free printables from Mint below, all you have to do is cut, fold and glue according to the instructions and start budgeting!