One of the things that hold people back from budgeting how difficult it can be. Between bank accounts, spreadsheets, and apps, sometimes keeping track of all those numbers is enough to make you want to quit.
Although the cash envelope system isn’t a new concept, it is a very helpful budget management strategy. If you are considering trying out the cash envelope system, read on to learn the advantages, disadvantages, and why you should give this budgeting strategy a try.
What is the Cash Envelope System?
The cash envelope system is a budgeting strategy that allows you to track exactly how much money you have in each of your budget categories by keeping your cash stored in actual, physical envelopes.
People who are trying to budget their money in order to live within their means use this type of system because it helps them manage their spending habits and stick to a predetermined amount for each day of the month.
When you are using the cash envelopes for budgeting purposes, you are giving yourself the freedom to spend until it’s gone. There is a bottom to the food bucket. When you reach the bottom, you’re done until the bucket has been refilled.
How the Budget Cash Envelope System Can Stop Overspending.
The cash envelope system forces you to be strict! No overspending, no justifying purchases. And if you like visualising how much money you have left, rather than using a card for everything, get your envelopes ready and head to the bank.