Defining The Envelope - Deepstash
Defining The Envelope

Defining The Envelope

The envelope system is a money management technique that helps track exactly how much money you have in each budget category for the month by keeping your cash tucked away in physical envelopes. Once you’ve decided how much to budget for each category, you are only allowed to spend the amount of cash available in each envelope. Once you run out of cash, you can’t spend money in that category until the following month.

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"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." ~ Warren Buffett

The idea is part of this collection:

What Is Opportunity Cost

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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...

Measure your expenses

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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.

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Steps of the zero-sum budget

  1. Determine how much you make on any given month.
  2. List your bills: Once you determine how much money you'll make this month,  figure out how much money you need to spend next month.
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