Simplifying works. Today, I'll break down my ridiculously simple, easy, and practical personal envelope budget system that single-handedly got us out of major debt and helped us get ahead financially. The best part? It's worked for thousands of people, too! Use our free printable below and get started today!
It's no joke that your budget can make you or break you… So it's important to get it in check and under control! Luckily for you, I recorded a video a few years ago showing you how I track my weekly budget using my simple envelope budget system. Little did I know that this simple budgeting system method would be one of my most viral principles ever!
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So, grab some chocolate and get cozy, because we're about to rock your world and change your life! Be sure to subscribe to our YouTube channel so you don't miss out on any of my great tips!
Watch the video all about my envelope budget system online or keep scrolling and click to watch below:
See?? Not so scary! Keep on reading so you can get your finances in order with a simple little envelope!
Budgeting can be complicated. Frustrating. Hard, even. When my husband I went through our tough financial time we learned one glaring fact about budgeting…
A SIMPLE ENVELOPE BUDGET SYSTEM IS THE BEST SYSTEM
As a frugal living expert and financial disaster survivor, I've learned the secret to budgeting that actually works – simplifying.
The simpler you make it, then the more realistic it is to implement into your life permanently. I am not a fan of crash diets, just as I am not a fan of crash budgets.
Today I'm going to give you an in-depth look inside the simplest technique ever. It has not only single-handedly helped us get out of major debt (more than $10,000 on just one credit card), but it has helped thousands of people stop getting by and start getting ahead.
This simple envelope budget system works whether you spend with cash, debit cards, or credit cards. Ready for the secret sauce? Let me start by explaining why this works so well for us.
WHY THE ENVELOPE BUDGET SYSTEM IS BEST FOR OUR FAMILY
When we first cracked down on budgeting, I tried everything.
- Monthly Budgets – Getting a lump of money is hard for me to not blow through quickly. Anybody else struggle with that?
- Multiple Budgets – Unfortunately, it was confusing and hard to track. Especially if I needed one budget one month and not the next, like haircuts or vet visits.
- Using Cash – Cash was hard to track, so I would have no idea where it had all gone at the end of the month. Those of you who can use cash are just amazing to me!
Nothing was working for me long-term, so I wised up and created my own system. A girl's gotta do what a girl's gotta do!
HOW THE ENVELOPE BUDGET SYSTEM WORKS FOR US
Since I got my act together, I now:
- Budget Weekly – Yes, you read that right! I break my budget down weekly.
- Have 3 Budgets – These encompass our regular spending (grocery, other, and family — more on that below).
- Use Credit Cards – They make it so easy to track all transactions and pay all bills!
Simplifying our budgets has literally changed our financial lives!
MAINTAIN A PRACTICAL & BALANCED BUDGET FOR-EV-ER!
Here are the tricks to maintaining this envelope budget system for the rest of your life:
- Divide up your spending and simplify your individual budgets. No more “hair cut budgets,” “eating out budgets,” or “dog grooming budgets.” I suggest you lump your spending into two categories and simplify.
- Break your budget down weekly instead of monthly. As I mentioned, it's hard to make a lump sum last 4 weeks, you're likely to run out. One week at a time is much more manageable.
- Keep track in a simple envelope.
Ready to see how? Let's break this baby down!
SET THREE SIMPLE BUDGETS
Alright, let's get into the nitty gritty of my 3 budgets to give you the BIG picture. By the end of this, you're going to be an envelope budget system pro!
WHAT DOES THE “GROCERY” BUDGET INCLUDE?
Anything you could find at a neighborhood grocery store. We're not talking Costco or super Walmart. We're talking Neighborhood Walmart, Smiths, and Safeway-type stores. They don't have power drills and sheets for your bed, but they have most of the basic items you might need to buy on a day-to-day basis.
Examples of grocery budget items include: food, shampoo, dog food, lotion, baby diapers and wipes, shaving cream, baggies, basic kitchen utensils and baking items, cleaning supplies, milk, basic cold remedy medicine, makeup and other toiletries, and so on.
WHAT DOES THE “OTHER” BUDGET INCLUDE?
Money set aside for normal, regular, non-grocery expenses. These are “want-to-have” items most of the time, and not “need-to-have” items. Once again, this does NOT include any form of bill or utility (see the next category for that).
Examples of other budget items include home decor needs, clothing, haircuts, babysitting money, piano lessons, getting the car cleaned, school pictures, lunch with friends, spa treatments, shoe repair, gifts for birthdays and showers, and so on.
So where do bills, utilities, and gasoline come from? In our house, money for that comes from our family budget.
WHAT DOES THE “FAMILY” BUDGET INCLUDE?
Expected, set, monthly expenses involving the family, house, and travel, as well as unexpected expenses involving the family. These are the “need-to-have” expenses that keep the family running and are NOT food-related.
Examples of family budget items include utilities (gas, electric, cable, internet), medical expenses (co-pays, medical bills, insurance, HSA), car expenses (gas, repairs, new tires, registering the car, oil changes), home costs (mortgage payment, homeowners insurance, home repairs, new water heater, new furniture, TV, or other large household expenses, etc.), family entertainment (travel, trips), and so on.
DETERMINE HOW BIG YOUR BUDGETS SHOULD BE
Before you can actually start using your free budget printables, you'll need to get a few things straightened out. Namely your grocery and other budget. But don't fret! I'm here to hold your hand and walk you through it to make it as easy as possible! 🙂
FIGURE OUT YOUR GROCERY BUDGET
This may sound like a daunting task… But lucky for you, we've got an amazing, in-depth grocery budget 101 post that'll help you figure out how much you should spend on your groceries! If you shelf cook, stock up on a budget, and use our grocery shopping tips, you'll be able to save THOUSANDS without clipping a single coupon. Yes, you read that right!
FIGURE OUT YOUR OTHER BUDGET
It's really not as hard as it may seem! Here's how we decided how big that should be:
- Pull out your detailed statements from the last 3 months showing every dime you've spent (spreadsheet, credit card statement, budget planner, or whatever you use to track your spending).
- Decide what will be covered in YOUR “other” budget.
- Total up how much you spent on “other” in the first month, then second, then third.
- Average them out (add the sum of the 3 months then divide by 3).
- There's your STARTING point.
- Now… cut it in half! 🙂 If half seems too harsh, cut it down and start there. Make it hurt a little, it's almost guaranteed you are spending more than you should because, well, that's human nature!
Not too hard, right?! Now, let's go over the absolute best budget printables you'll ever see!
As explained in the video at the top of the post, an envelope is the single most effective budget tracker I've ever tried. You can make your own envelope like I did in the video, or you can download our free budget envelope printables.
If you want some oh-so-pretty-and-fancy envelopes, then we've got you covered! Head on over to The Page Company website, snag some, take a little look around while you're there, and use them already! 😉
A FEW TIPS TO MAKE THE MOST OF YOUR ENVELOPE BUDGET SYSTEM
It's not too difficult once you get the specifics down! Here are some of my additional tips to really make the most of this printable budget tracker.
- Stay Within Your Weekly Budget – This is key! However, life happens. So if you accidentally go over budget… NO BORROWING BELOW THE LINE FROM WEEK TO WEEK! You can feel free to borrow side-to-side between your weekly grocery and other budgets as needed.
- Cut Your Budget at the Beginning – Try cutting your budget down a little to begin with. You probably spend money on little things that you don't need. Cutting back could really help your family reach your goals if you put it in your slush fund and put it toward BIG, long-term financial goals.
- Use Leftover Money Wisely – Try to stay below budget each week. If it's the end of the week and you have money left in your budget, try not to look for a way to spend it. Rather, put it toward getting out of debt, or if you're debt-free other than a house or car, put it in your slush fund or savings accounts.
- Prepare for a Long Month – If you have a month with 5 weeks, you can either make the first or last week of the month longer to include the extra days or simply divide your budget by 5 and keep all your weeks as 7-day weeks. Do what works best for you! In our free printables, we divided everything by 4 weeks to keep it uniform and simple. Some people will also do a spending freeze one of those 5 weeks, but that's completely up to you!
- Keep EVERY Receipt – Put every receipt for the month in your envelope budget tracker. If you lose track or need to return something, you have everything right there!
- Be Wise with Every Dollar You Bring In – If you bring home extra money in a month (bonus, extra commissions, extra paycheck that month, etc.) DON'T alter your budget! There is absolutely no need! Put the extra money toward debt, put it in your savings, or put it in your slush fund. Don't go out and buy more groceries with it unless you absolutely need them!
TAKE A TECHIER APPROACH TO YOUR BUDGET TRACKER
If you prefer a more “techy” approach to tracking, you're like my husband. He would rather shave his eyelids than carry an envelope! Find a budgeting and money management app that works for you and stick to it!
He uses Mint.com to track his responsibilities because it's digital, has a free app, and connects with every loan, bank account, and credit/debit card we have. Plus, he can also set and track financial goals. I recommend doing both the free budget printables and the app. Mint is more comprehensive, but it didn't work for me in terms of keeping track of day-to-day spending.
HOW TO REALLY MAKE THESE BUDGET ENVELOPES WORK FOR YOU
Trust me, it's much simpler than it looks on paper (that's why watching the video is just plain easier). Making these simple changes transformed our financial lives and has allowed us to get out of a very scary situation… and get ahead!
Adapt the system to fit you and your family. And remember, if we can do it, you can do it. 🙂 This envelope budget system can work for anybody!
To really take it the extra mile and give you the most bang for your buck, here are a few additional tips to make this method work even better for you…
OPEN 7 BANK ACCOUNTS
Yes, seven. “Whaaaaat?! Hold the phone! Put on the breaks! Sound the alarm!…SEVEN accounts? Giiirl, you must be ca-RAY-zay!” Ok, maybe I am. But I will promise you something… By opening multiple accounts, it WILL make your life easier as it helps you organize and simplify your money more than you can imagine.
It's been such a game-changer for us! So be sure to read our 7 bank accounts post for all the details, how-to, why's, and info on why setting up 7 bank accounts will change your life.
DIVIDE UP SPENDING RESPONSIBILITIES
There's no reason to step on each others' toes! Divide and conquer! Sit down and write out everything you spend money on, then divide it up.
You should buy the groceries if you do the cooking. You should be in charge of paying school fees if you usually drive the kids around. If you are the one who knows about cars, then you should be the one to handle oil changes and car repairs.
Dividing things up this way will keep you efficient, organized, and give you autonomy to do things your own way! Check out more details about how to divide up your financial responsibilities in marriage responsibly.
LET BUDGET BOOT CAMP HELP YOU WITH YOUR BUDGET
Need a little more help and hand-holding when it comes to your budget? Don't forget about my Secret Sauce online budgeting program, Budget Boot Camp! BBC is a super fun, 27-video program that makes money easy to understand. All you need is a screen and you're set!
And don't forget, if you don't save at LEAST what you paid for the program, I'll refund every dime. You've got nothing to lose (except your debt)! Use the code FCFBLOG to get an extra 10% off, because I love you 😉
Have you checked out ShelfCooking.com yet? Our brand new site is dedicated to helping you cook delicious, homemade, down-home-cooked meals for your family without slaving away in the kitchen!
Basically every parent's dream, right? Join our Shelf Cooking Community today!
Make sure you check out these other helpful budgeting articles!
- New to this whole budgeting thang? Go read about why you need to start budgeting before you do anything else!
- Learn how to build your credit so you can make purchases when you're ready.
- Learn how credit cards work so you know what you're getting yourself into.
- Get tips on how to improve your credit score if you need some help in that department.
- We've got the top reasons that couples fight over money, plus some ways to easily STOP that fighting!
Good luck with your new envelope budget system!