Envelope budgeting puts you in complete control of your finances. You take the cash you have right now and make a plan for how each dollar will be spent until you get paid again. It might sound daunting, but it isn't as scary as you might think. It's not about spending less, it is about spending right.
Put your dollars into the most important envelopes first. Then start filling your less important envelopes. You know your situation best, you prioritize the money in a way that makes sense to you. As you spend the money comes out of your envelopes. When your envelope is empty, no more spending in that category.
The main goal of envelope budgeting is to help control spending. But let's face it, even with the best intentions there are times when you might overspend from an envelope. Don't worry, when this happens (and trust me, it will happen) – just move money from another envelope to cover it. This keeps the budget honest and keeps you from slipping into unnecessary debt. Having to move money from one envelope to another usually means you spent more than you were supposed to, so think carefully about how to cover the envelope deficit to prevent going over budget again.
The cycle starts again. Distribute your dollars to your envelopes, by priority. Only spend what is in your envelopes. If you need to make adjustments, then make them.
No one has time these days to be putting their cash into physical envelopes and bringing those envelopes to the gas station, utility office, restaurant and what not. Banktivity makes envelope budgeting easy regardless of whether you use cash, check, debit card or credit card.
Since switching to envelope budgeting I have never had a better handle on my finances. At any given moment Banktivity tells me exactly how much money I have for immediate expenses and perhaps more importantly, how much I have saved for the inevitable bigger expenses in the coming months. It's been a total game changer!
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