The Envelope Budget: How we did it differently

My husband and I were looking into different ways to budget that would actually work. We are not people who keep our receipts, balance a check book, or even check our bank accounts often. This led to us being unable to follow even carefully thought out and planned budgets. I would be at the store and see a cute sweater and I did not even think to consult my budget…. I’m sure some people can relate.

Enter the envelope system. We had heard about this, and I even remember my parents trying this budgeting system out when I was in grade school. We decided to adapt this system a bit to fit us. You see, we are generally frugal individuals, so there are only two categories that we needed to keep in check: eating out and alcohol & bars. We decided to do the good ol’ envelope budget for those categories: take the money out of the bank account, and keep them in envelopes to control the total amount for that month.

We quickly realized that we needed to plan a bit better, because in the first month we were out of money in our “eating out” budget by the 24th.

We had to say no to certain things, or just order one drink when we would go out certain nights. This was especially hard in July because I was throwing two bachelorette parties in two weeks. In the beginning of July, I set aside the money I would need for the bachelorette parties so I could still still to my budget.

This system has helped me become more aware of where our money is going. I’ve tried to be more thoughtful of the things I buy and places I go. It’s very doable, and it worked better than just making up a budget and trying to track our spending digitally. We keep that kind of budget through Mint.com for most things and it’s not hard for us to follow. Then keeping track of those two categories with the envelope system has worked well for us.

Have you tried the envelope system? What categories do you use?