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The envelope system

The envelope system

This method helps you curb your spending or stay out of debt when you don't want to track every purchase.

  1. Set a limit for each expense category, like groceries.
  2. Fill marked envelopes with the allotted cash and use only that money for purchases.
  3. When the envelope is empty, you can't spend more.

The Goodbudget app is based on the envelope system for those who don't want to work with envelopes.

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Compare manual and digital budgeting options

Personal finance software that lets you automate savings or update information on the go is helpful.

However, some people still prefer a hands-on approach, like pen and paper. Writing it down can help to feel more connected to your budget. It is also helpful if you don't fe...

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The 50/30/20 budget system

This system splits your income into three categories:

  1. 50% goes to necessities
  2. 30% to wants
  3. 20% to savings and debt repayment

This method gives you room to pay down debt and save for future expenses.

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Figure out your needs

Figure out your needs

The best budget system depends on what you want to do, such as limiting spending, paying debt, or building savings.

Once you are clear about what you hope to accomplish, pick a budget option that meets those needs.

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The zero-based budget

This method makes monitoring your spending clear.

Take your monthly income and deliberately use every dollar until zero dollars are left. Log every expense to ensure you're on budget. Budget apps such as YNAB and EveryDollar can be helpful.

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Pay yourself first

Pay yourself first

This method prioritises savings before immediate expenses.

Decide how much to put towards your monthly savings goals like retirement and an emergency fund, then use what is left.

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The Envelope System

The Envelope System

The Envelope system is a way to track your variable expenses like food, entertainment, and drinks.

This method, preferably used weekly, allocates a certain amount in each category in labeled envelopes (food, drinks, movies, etc.). Once the envelope is empty, you are done spending in tha...

When you should use debit

  • When you want to avoid getting into (more) debt: Since your debit card is connected to a checking account, you theoretically only spend what is available in your account.
  • You want to pay for everyday purchases conveniently—things like gas, grocerie...

Measure your expenses

Measure your expenses

Take a hard look at how much you are spending day to day. Every time you spend money, write it down as it happens in a little notebook or log it into an app.

Alternatively, use the envelope method. Make an envelope for each of your non-fixed expenses, like groceries, clo...

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