Budgeting Using the Envelope System Works

For many people the word budget is like the word diet, they cringe at the thought. Getting on a budget is not only easy but it helps you to know where your money is going and how to stop the leaks that are sucking up your money each month. Don't be afraid to budget, start off slow and soon you will have a budget that works for you. There is a lot of budgeting information on the internet in fact so much that it can be overwhelming for the beginning budgeter.

Budgeting for me has always been a difficult task. Not that it needed to be but for some reason I always made it more complicated than it needed to be. I could put the numbers down on paper but it never worked out the way I planned. So I needed to change the way I was doing things, I needed to make this work for me. Using the envelope system has worked well for me. I have stopped wasting money in unnecessary bank fees, spending money on things that I do not need and have been able to pay down debt that I have.

I stopped having my paycheck directly deposited into my account. I love the convenience of direct deposit but I am not good at handling a checkbook. I have paid the bank to much money in bank fees in the last year. I decided for the time being, having a paper check would be helpful. Since beginning this process I have not overdrawn my checkbook. I use cash more and my debit card and checks less.

A few days before each payday I go over my notebook to adjust if I have anything new that needs to be paid, or an outing that I will need to have cash for. Before I leave to cash my check. I go through the notebook adding up how much cash must be deposited in the bank to cover all payments I will be making.

I cash my check at Wal-Mart for $3.00. So every month I am paying $6.00 to cash my paychecks. Although it does come out to $72.00 a year. This much cheaper than the bank fees I have been paying. This has also been a tremendous help for me in getting myself back on track with bills. After returning home with the cash that is left after I have deposited all bill money in the bank. I use envelopes to distribute the rest of the money. I do not carry the cash in my wallet since that can create over spending. Seeing that I only have $20.00 in my wallet, refrains me from impulse purchases. Each envelope is marked for a specific category. For example I need $33.00 for a bus passes until the next paycheck. In an envelope is marked bus, I place the $33.00 in cash. When it is time to purchase a pass I use the money in that envelope. Every time I spend money out of an envelope I put the receipt in the envelope. So I can track how my expenses are going for the month. This will also help if you need to adjust the amounts that are going into the envelopes. I also do this with money for my son, food and entertainment I may have planned. Many people will have other categories but for now mine are simple, since we are cutting back on many things.

When an envelope is empty then I file it in my notebook for next payday. I know that if I use all the money in the envelope there is no more money to be spent in that category until next payday. This system has really made a difference in the money that I spend on useless items.

The envelope system is one of the easiest ways to start a budgeting program. It will allow you to see how much money you are spending. It will also help you to have money available for what is needed between paychecks. There are no complicated tools need just a notebook, pen and some envelopes. By using this system you will be back on track and in no time understanding how to handle the money you work for better.