Envelope Budgeting

The envelope budgeting system is a simple, but effective way to make sure you never go over your budget. You can get out of debt and gain an appreciation for your money by using this amazing budgeting strategy. At the beginning of each month, you allot a certain amount of money to the categories you have planned. With an envelope filled with cash for each important category on your budget, you use real bills instead of a card for every transaction.
This system is best for people who want to have more control over spending behaviors. For example, if your “Clothing” envelope is empty, you cannot spend anything on clothes until your next set of envelopes. The goal of this system is get people in the habit of never spending more than they have, to break the alliance that many people have on credit cards and payday loans. This system also encourages even spending, stretching your income to last over a long length of time.

Calculations

Budgeting Apps

You can be much more mindful of every dollar you spend by tracking your bank account using a budgeting app. The most user-friendly is Mint.com, which helps you to create monthly budgets and actually links to your bank account, giving automatic updates daily. For long-term planning, Quicken is a great program. For those who want the ease of computer budgeting without the connection to bank account, BudgetTracker.com is the program for you.

Piggy Banks

Balanced Budgets

The most effective budgets change according to your income and circumstances. A balanced budget should never plan for debt, and should always be current with your consumer and income needs. Budgets should be adjustable, just in case there is an emergency that requires some spending that wasn’t in the plan. They will also put the most important things, such as home payments, first, in order to have enough money to pay your creditors.

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