Tips On Budgeting: The Highly Effective
MySpendingPlan.com Editorial Staff
There was a time when the
envelope system of budgeting was used in many American households. This
system was a very effective way of managing the household budget and
helped people with debt relief. The system went something like this:
create a separate envelope for different household expenses such as
food, travel, etc., allocate expenses to the different categories
according to one’s income, put the allocated money in its respective
envelope, and then use the money from a particular envelope to pay the
With the handy envelope system
of personal budgeting, people always knew exactly how much money they
had spent on different things and how much money they had left over to
tide them through the month or put into savings.
Here’s a working example
of the envelope system of budgeting:
If a person’s annual expense
for, say, electricity was $1,200 and they were paid a monthly salary,
then they would put $100 into the envelope set aside for electricity
each month. Even if some month their electricity bill was more than
$100 and some less, they always had enough money to pay their bills.
Similarly, the envelope system of budgeting worked for all their other
expenses as well.
Envelope System In The
Although the envelope system
of money management lost favor due to modern budgeting methods, it is
now becoming popular once again as most Americans are under debt and
would like to be debt free. However, creating physical envelopes and
stuffing them with cash each month is definitely not the way to go in
today’s age. This is why we have created an online envelope system here
at MySpendingPlan.com. With our unique and FREE budgeting software, you
will be able to make virtual envelopes, stuff them with monetary
balances instead of cash, and monitor the balances in real time.
With the help of this unique
envelope budgeting system, you will be able to:
- Make better financial
- Spend your money where it
should be spent.
- Minimize (or just do away
- Always pay your bills on
- And keep yourself from
falling into the debt hole.
Over time, using our unique
budgeting software, you will be able to create the perfect personal and
household budget and most importantly, spend according to your budget.
Since you will have money to pay your bills, you will not need to borrow
money, which in turn will help to keep you out of debt.
However, the envelope
budgeting system does have some simple rules. These are:
Never forget to or avoid
putting the allocated money inside the envelopes (virtual or
If you have used up all
the money from a particular envelope, you cannot incur that expense
till you have refilled the envelope. For instance, if you have
$200 in your apparel envelope and you treat yourself to a new dress
for $200, you simply cannot buy yourself any new clothes till that
envelope is filled again.
As you can see, the envelope
system of budgeting does involve some determination on your part to
stick to the system. However, when you see the results of your
budgeting few months after you have started, and see how you are debt
free while your family or friends aren’t, you will be very happy that
you decided to use the unique envelope system for personal budgeting and