Misplaced Pages

Envelope system

Article snapshot taken from Wikipedia with creative commons attribution-sharealike license. Give it a read and then ask your questions in the chat. We can research this topic together.
(Redirected from Envelope budgeting)
This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed.
Find sources: "Envelope system" – news · newspapers · books · scholar · JSTOR (June 2023) (Learn how and when to remove this message)
Budgeting method
A person using the envelope system, putting aside money into a ring binder of labelled plastic envelopes

The envelope system, also known as the envelope budgeting method or cash stuffing, is a popular personal budgeting method for visualizing and maintaining a flexible budget. The key idea is to prioritize cash income to meet separate categories of household expenses in physically separate envelopes.

Usage

Typically, the person will write the name and average cost per month of a bill on the front of an envelope. Then, either once a month or when the person gets paid, they will put the amount for that bill in cash in the envelope. When the bill is due, the money is taken out to pay for that bill.

This prevents the person from spending the money out of their pocket or bank account, because it is already allocated to the bill.

This strategy can be adapted to multiple checking accounts, or by using budgeting software based on the person's preferences, in lieu of physical envelopes.

See also

References

  1. "Envelope Budgeting System". MoneyFit. May 21, 2022.
  2. "Envelope Budgeting". Banktivity. Retrieved June 30, 2024.
  3. "How to Use the Envelope Budget System: A Guide for Older Adults". National council on ageing. August 26, 2022.
Stub icon

This finance-related article is a stub. You can help Misplaced Pages by expanding it.

Categories: