I am a fan of the envelope system! I know many people who have good intentions are challenged to make a budget and it never works. They do the calculations based on last year’s spending and this gets very complicated because financial planning is the act of telling money what to do rather than asking where it went.
It is the best way to stay within budget.
The correct thing is to make a list of all your actual expenses, and put every penny to be spent on paper before the other month begins. This will give you a list of where you usually spend your money. The envelope system helps you keep out of budget and establishes the habit of paying with cash rather than the card.
There are certain categories of things that can be paid over the Internet, such as Pay TV and rent. The bank simply deducts the amount from your account every month. But there are other expenses in your budget that you never know how much you’re going to spend that end up destabilizing your planning. If you put $ 150 in your clothing budget, then you have to spend that maximum! This is where the envelope system works. Just put the amount of money in this category (budgeted) in an envelope and when the money runs out, stop spending until next month!
There are 4 categories that I will recommend to you to switch to the envelope system today, they are:
Can you imagine the peace that will be in the house?
This is my recommendation, but there may be more categories, ie more envelopes. For example, “vacation”. My wife Zaira and I have been living on the same budget for years and we still use the envelopes.
These envelopes will also help to reduce the number of conflicts with your spouse, because when both agree on spending on food, clothing or makeup, the conflicts over money will disappear.
Now let me warn you: Some people will criticize you because you are making a decision that is usually made by rich people. But if the less affluent criticize you, don’t stop, keep going because it means you’re going the right way. This is the same as a “chubby” making fun of your diet. Things like that should give you courage and hope! If you tell a rich man that you have decided to live on a budget, he will tell you, “See you up on the mountain.”