Are you struggling to stop frivolously Spending Money on things that you don’t need? Maybe you are struggling to stay out of debt. Whatever the reason we have a system that may work for you. It is called the Envelope System! This is a more extreme approach to budgeting your money but works for lots and lots of people. This budgeting principle is a cash-based approach, so no bank account needed to save and manage your money. The other great thing about this type of budgeting system is that you do not need to track every single purchase you make. This is what makes this principle so appealing to so many different people from all over. If this does not seem to be the right fit when it comes to your budget selection click HERE.
So basically, you set a spending limit for each of your expense categories and keep those funds in a marked Envelope to use on the categories expenses. These categories could consist of things like: groceries, rent/utilities, phone, internet, gas, insurance, savings, etc. Then you would make an envelope for each of your categories, write the category name on the envelope, and fill the envelopes with the amount needed for each of your categories. The trick is to only use the allotted amount in each envelope for each category. Once you have emptied an envelope you must not spend any more money on that specific category. You would either budget/balance the envelopes either bi-weekly or monthly depending on your specific situation and what ultimately works best for you.
With this type of budgeting system you cannot go wrong. Many people find if much easier to budget their money when it is right there in front of them. If you are one of these people then we would suggest giving the envelope system a try. Even people with self-control and spending problems can benefit from this kind of system because you can physically see the impact of your spending habits, and for most people that in and of itself is enough to change spending habits to be more responsible and less frivolous.
The envelope system may seem really “old fashioned” or “old school” but it is also really easy and super effective. Most would not deny the power of seeing is believing when it comes to money management. With traditional money management with banks it is very difficult to really get a feel for where your money is going, especially if you are dealing with a ATM/debit/credit card. It is so easy to overspend when the money is not physically in the palm of your hand or in your pocket/wallet. There are quite a few alternatives to using actual envelopes as well. There are plenty of budgeting apps out there ready for download, including the “Goodbudget” app which is actually based on the envelope system and is great for those that love the idea but don’t love wasting paper.
If you need a rigid system to help you stop spending money frivolously or stay out of debt but don’t want to track every purchase, try this cash-based approach. You set a spending limit for each expense category, like groceries, then fill envelopes with the allotted cash and use only that money for purchases. Once an envelope is empty, you can’t spend any more money on that particular category for the month.
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