Envelope budgeting is a tool that can help you control and monitor spending habits.
With envelope budgeting you control spending by putting your allotted spending amounts into envelopes, each labled with their respective category.
You would have an envelope with your budgeted amount for gas, groceries, fun money, etc. At the beginning of each month you would put the alloted amount into it's envelope and that would be the most you could spend on that category for that month.
Envelope budgeting helps you see at a glance how much you can spend in each area.
A modern way to implement envelop budgeting is to use gift cards.
Gift cards provide an alternative to carrying around envelopes or adding up receipts. Gift cards allow you to pre-pay; an easy way to keep track of the exact amount you spend at which stores.
This works especially well for stores where you typically overspend. For some people, that’s Home Depot. For other’s, Victoria’s Secret.
Whatever stores tempt you the most, determine ahead of time how much you can spend each month. Instead of using envelopes to budget, go buy a gift card with your allotted amount. Once the card is used up, you’re done for the month. It’s that simple.
This easy budgeting trick saves some hundreds of dollars a month.
One client confessed to me that she routinely spent over $500 a month at Target. On what? She wasn’t quite sure, but by using envelope budgeting in the form of monthly gift cards of $250, she was able to cut her spending in half.
After you buy a gift card remember to register the card online. Most stores allow you to do this so if your card is lost or stolen, you won’t lose out.
