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Thursday, July 14, 2011

A guide to Budgeting: The Envelope Method

One of the ways that you can budget your money so that you can stay on track and not over spend is to use the:

"Envelope System"

This is pretty basic, and for a lot of people it works. What you do is one day per week, say Sunday, you take out a specific amount of cash. Lets use $200 as an example. You then split up the $200 into different envelopes which are labled with categories such as: Groceries, Clothing, Gas, Going out to eat. You could split up the money as:

Groceries: $100
Clothing: $20
Gas: $30
Going out to eat: $50

Then live by the rule that once the money is gone for the week it is gone. If you have left over money in any category you could then deposit that into a savings account or you could roll it over to the next week. Then possibly the following week the clothing category would have $30 in it.

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