The 'Ole Envelope Tactic

One of the oldest and easiest budgeting tactics to date, the envelope system, is a great way to manage some of your finances and ensure you do not overspend. It seems to be easier to watch what you spend when you pay with cash versus a card because you actually see where your money is going. Organization is key to using the envelope method and it is probably best used for additional expenses such as spending money and other entertainment purchases. Bills are probably best paid electronically whenever possible but things such as food and entertainment vary enough to use the envelope method. Once you have budgeted out your entertainment (or any other monetary aspect) money, withdraw that amount, and stick the cash in an envelope. Once the envelope is empty, you know not to spend any more on the additional entertainment expenses. If you do not spend all of it for one month, you can add it to the next month’s allotment or stick it in your savings. The envelope tactic can be used however and whichever way best meets your financial needs. Just make sure to keep the envelope in a safe place...like the end of a rainbow? Happy St. Patrick’s Day!