Envelope Budgeting

Time-tested method proven to keep your spending on track.

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Start With Dollars

Don't over complicate this: Envelope budgeting starts with the money you have right now.

Envelope budgeting puts you in complete control of your finances. You take the cash you have right now and make a plan for how each dollar will be spent until you get paid again. It might sound daunting, but it isn't as scary as you might think. It's not about spending less, it is about spending right.

Prioritize Your Dollars

Envelope budgeting is all about making a plan for your money. It's a proactive (instead of reactive) approach to budgeting.

Put your dollars into the most important envelopes first. Then start filling your less important envelopes. You know your situation best, you prioritize the money in a way that makes sense to you. As you spend the money comes out of your envelopes. When your envelope is empty, no more spending in that category.

Be Flexible With Your Dollars

At some point you'll overspend, but it's okay – you'll cover the expense with money from another envelope.

The main goal of envelope budgeting is to help control spending. But let's face it, even with the best intentions there are times when you might overspend from an envelope. Don't worry, when this happens (and trust me, it will happen) – just move money from another envelope to cover it. This keeps the budget honest and keeps you from slipping into unnecessary debt. Having to move money from one envelope to another usually means you spent more than you were supposed to, so think carefully about how to cover the envelope deficit to prevent going over budget again.

Get More Dollars

When payday comes, refill your envelopes based on priority.

The cycle starts again. Distribute your dollars to your envelopes, by priority. Only spend what is in your envelopes. If you need to make adjustments, then make them.

Envelope Budgeting with Software

You didn't think we really meant to have envelopes with cash in them, did you?

No one has time these days to be putting their cash into physical envelopes and bringing those envelopes to the gas station, utility office, restaurant and what not. Banktivity makes envelope budgeting easy regardless of whether you use cash, check, debit card or credit card.

Envelope budgeting is a total game changer…

Since switching to envelope budgeting I have never had a better handle on my finances. At any given moment Banktivity tells me exactly how much money I have for immediate expenses and perhaps more importantly, how much I have saved for the inevitable bigger expenses in the coming months. It's been a total game changer!

Ian Gillespie, President IGG Software

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