We’ve all done it and we’ve all felt guilty for it. You only plan on spending $300 (or $200 or $100) at the grocery store, but when you get to the checkout, your total is $30 or $50 more.
To spare yourself time and embarrassment, you just put it all on credit. This leads to debt and overspending. Need to break this habit? Use envelope budgeting. Read on to check out the Envelope Budgeting system.
For envelope budgeting to work, you have to be realistic about how much money you spend. If you know you spend over $200 on gas every two weeks, don’t try to cut down to $100 per two week period.
Pick amounts for food, gas, fun, entertainment, and other categories that you spend on every pay period. Make sure they are attainable but still appropriate for your income.
You’ll need an envelope for each budget category: food, gas, entertainment, and so on. Label each envelope with its category and how much money you start the pay period with.
Challenge yourself to not spend the full amount in each envelope. Any amount you have left over at the end of the pay period should go into a savings jar or savings account.