Comments on: BVC #16: Introduction to Envelope Budgeting

By: ellington1

ellington1 — Sun, 18 Sep 2011 19:02:38 +0000

i love your idea of an envelop budget it will work if you have the willpower to carry it out each month and once you spend the envelop its gone for that month so spend spareingly I love your idea of a credit card envelop keeps track of your credit card.

By: FlyFisher

FlyFisher — Tue, 21 Sep 2010 04:22:07 +0000

Great insight which gives a good perspective on the importance of budgeting. I think I will try envelope budgeting for a while. When your money is all lumped together it can be easy to spend it in needless places. However, sometimes not having a budget for something non-essential allows you to “forget” about it and save some money.

By: matt

matt — Sat, 10 Jul 2010 13:25:36 +0000

mymom did this too for over 40yrs…..always works….didnt need a seperate budget for each paycheck, as you have the same budgeted amount come out of each check….makes more sense than trying to pay a mortgage all from 1 payday.

By: becky

becky — Sat, 27 Jun 2009 16:24:46 +0000

Excellent and simple, I use the envelope system, but I think it’s important to tell people to put money in a 403b or 401k or IRA account first, “using Direct Deposit” then with your remaining paycheck us the envelope system.

By: Anonymous

Anonymous — Fri, 26 Jun 2009 19:05:13 +0000

Grim Reaper! That was hilarious.

Well written. You have many good points.

By: carla | green and chic

carla | green and chic — Fri, 26 Jun 2009 18:11:10 +0000

I am not good with cash, enveloped or not. I am just too paranoid of getting robbed or losing it somehow. I am just fine with my debit, credit cards and some good Excel spreadsheets. I do keep a little “coffee cash” and emergency money (like in case I need to catch a quick cab), but its never that much.

By: Guy in San Antonio

Guy in San Antonio — Fri, 26 Jun 2009 01:36:43 +0000

I think the idea of having an envelope for the credit card is an excellent idea!

Also, in order to keep things simple, i would suggest you don’t use the envelope system for fixed expenses you know about like your rent or mortage. It should be kept to your top 2 or 3 flexible expense categories like: groceries, entertainment, vacations. By doing so, i think you can gain more cooperation from a recalcitrant spouse.

Guy Hamilton
CPA and recovering debt junkie

By: janessak

janessak — Thu, 25 Jun 2009 23:53:54 +0000

Thanks for info. I have tried the envelope method without any guidance and found it to be great.

I tend to lose papers easily and so I opted for an expanding file that is coupon sized. It works great and you can label the tabs. The only draw back is that you either have to take the whole thing with you or plan a head and take the money out that you will need.

With some of your pointers I am going to fine tune my envelope system.

Thanks again.

By: Damon Day

Damon Day — Thu, 25 Jun 2009 23:39:16 +0000

I advise many of my clients who have trouble with budgeting to use this system. It works very well for many people because of the physical presence of the money.

Of course the main drawback is that you always have to pay with cash (which is sort of the point) but for certain things it is hard to give up the convenience of having a debit card.

What some of my clients do is actually keep some money in their checking accounts and make up a coupon for that money that they put in whatever envelope or envelopes that it should be in.

So for instance if they budget $300 for gas but they like the convenience of paying at the pump, then they put a $300 voucher (or multiples in like $50 dollar increments or so) into their gas budget envelope. Then if they use the debit card to fill up the tank, they remove a voucher or combination of vouchers equal to what they spent at the pump.

This allows you to get the benefits of the envelope system to help stick to a budget but not have to go 100% cash.

Or a simpler variation of this like Jim mentioned in the video is to use one credit card and have an envelope for it. Then at the end of the day you have to transfer whatever cash that you spend on the card into the Credit Card envelope so you can pay that bill at the end of the money.

For people that don’t have access to a credit card, the debit card system involves an extra step of creating the coupons, but once they are created, you can reuse them month after month.

By: Miss M

Miss M — Thu, 25 Jun 2009 21:45:28 +0000

This is a very old concept. 49 years ago my Mom handed me a cardboard style book filled with about 15 envelopes. I named each envelope and selected an amount to be put in each week as the paycheck arrived. To cut to the chase…..it was the best of all ideas to create the habit of budgeting within your means. I highly recommend it, especially to someone just starting out with the idea. By the way, I always had money for everything with this method and never purchased anything unless the money was in the evelope. Thanks for all that you do with your bulletins. I read them all.

By: Dee

Dee — Thu, 25 Jun 2009 19:56:58 +0000

I just happened to stumble upon this website and couldn’t believe you were talking about envelope budgeting. I’m actually starting it tomorrow with my next paycheck. Since I am a teacher, maintaining a budget in the summer is crucial. I’m using it mostly for shopping/spending budget and I can’t wait to see how it goes!

By: mikecancook

mikecancook — Thu, 25 Jun 2009 19:23:57 +0000

Great video! Nice to see variation in scenery. Envelop budgeting seems like a clean and simple alternative to cash expenditure. I may try this just for my shopping/spending budget.

By: jillianlou

jillianlou — Thu, 25 Jun 2009 14:05:04 +0000

What do people do to buy airline tickets or other big cash purchases? Save the cash until they get the amount, then deposit it and use a card? Just use the cash (like at the airport, etc)? I would be afraid to lose all that money…I have a bad habit of leaving my purse open!

By: Kevin at OutOfYourRut

Kevin at OutOfYourRut — Thu, 25 Jun 2009 13:40:48 +0000

What do I have to do to get rid of that menacing looking pacman icon that comes up on my posts??? It makes me look like the grim reaper at a nursing home…

By: Jim

Jim — Thu, 25 Jun 2009 13:17:39 +0000

While it may have some flaws, it’s has fewer flaws than a lot of other things.