Mom’s Money

Envelope Budgeting

I recently came across an interesting way to make sure you stick to your personal budget. If you have been making a budget, but then have trouble sticking to it, you may want to give envelope budgeting a try. Here’s the basic idea:

1) Make an envelope for every mayor type of expense you have including groceries, gas, lunch money, entertainment etc.

2) Put the alloted amount of money for each type of expense in the corresponding envelope. Then use it throughout the week or month to make your payments. When the money is gone, that’s it. Anything that’s leftover at the end of the week goes into savings or toward paying off debt.

3) Be sure to pay bills including mortgage or rent, car payments, utilities etc. by check or online as you usually would. Don’t forget to consider all these expenses when you figure out how much to allot for each of your envelopes.

The advantage of this system is that you don’t have to write down every single small expense… you just spend the money in your envelope until it’s gone. Give it a try and see if this system works for you and your family.

You could even use a mixed system of regular budget and then just make an envelope for each member of the family with their spending and lunch money.