Envelope System, Tips on Budgeting

Perhaps you remember your mom using the envelope system to budget for monthly bills? This is an “oldie but goodie” idea to keep track of your budgeted income.


The envelope budgeting system is a very simple budgeting trick. The key to the system is sticking to it.

There are even online versions of this budgeting strategy....Mvelopes Personal is a very popular online envelope budgeting program. Check out their free trial!

How Do You Start This Envelope Budgeting System?

Use this idea for expenses that have some flexibility in them. Your mortgage and car payments and the like are fixed. You do not have any options when paying these expenses. However a certain amount of grocery bills, gas bills, and clothing expenses fall within your discretionary funds.


  • Decide how much of your budget you intend to spend on each of your chosen categories.
  • Label an envelope with the name of the bill (or expense) and place your budget allowance in it.

  • Paying for your purchase in cash has a different impact than a debit card or a credit card. It feels like it hurts more!
  • When that money is spent, you are done with that expense for the month. That's it, no cheating. No adding money to the envelope! Only use the money in any labeled envelope for what it was budgeted for! No stealing from your other envelopes! (Robbing Peter to pay Paul!)



    Try to “beat” your personal budget projection and save the extra money for something special later on!

    This system really forces you to see where your money is going!

    Leave Envelope System Budgeting, get back to learning how to make a budget !