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Using The "Envelope System"

Using The Envelope System

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 avoid debt or overspending.  The system went something like this: get a separate envelope for different household expenses such as housing, 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 corresponding bills.

During the Depression, and for years after, banks weren't easily trusted. At that time, the envelope system was also a common way to save money. The savings envelope, however, was kept under the mattress!  Unusual as it may it sound, the method was solid, based on necessity and is now having a resurgence in popularity in America.

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 months 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.

The Envelope System In The Internet Age

MySpendingPlanTM has taken this concept and modernized it for today's lifestyle.  With our free online software, you can create virtual envelopes and monitor their balances in real time.  As a result, the software helps you to make good financial decisions to assist you to reach your financial goals.  MySpendingPlanTM greatly simplifies the process and makes you more efficient at managing your money.

Although the envelope system of money management lost favor due to modern budgeting methods, it is now becoming popular once again as many Americans are carrying too much debt and would like to become debt free.  However, creating physical envelopes and stuffing them with cash each month is definitely not the way to go these days.  This is why we have created a sophisticated online envelope system here at MySpendingPlanTM.  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.  You can even set and monitor specific savings goals.

With the help of our unique online envelope budgeting system, you will be able to: 

  • Make better financial choices.
  • Spend your money where it should be spent.
  • Minimize (or just do away with!) overspending.
  • Always pay your bills on time.
  • And keep yourself from falling into the debt hole.

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