The concept behind an envelope budgeting system is quite simple. Traditionally, it involves using cash: when you receive your paycheck, you cash it and divide the money into different envelopes, each designated for specific spending categories. Whenever you need to make a purchase for a particular category, you take the necessary amount from the corresponding envelope. Once the money in an envelope is gone, that indicates you've reached your spending limit for that category. At that point, you have two choices: either refrain from making further purchases or borrow from another envelope, which can help reinforce the importance of sticking to your budget.
Save more than $1,000 a year by switching to the envelope budget By Cassie Bottorff →You might be wondering how much you should spend within each of your budget categories. Unfortunately, there is no right amount to spend in any category for every individual. It's up to you to decide what works for you. There are a variety of philosophies about the best way to budget.
Popular Budgeting Strategies from Financial Wellness @ Penn →← Curating the web to find the most interesting and helpful information about your money.