How To Make an Envelope System

Using the envelope system is one thing you can do to keep track of your expenses and to budget your earnings. This is a simple method that will help you determine where your salary goes. You can easily adjust to the envelope system if you follow your own rules. When you do this, it will be easier for you to set aside money for the things that you need and you can also avoid unnecessary spending.

Find out how to make and use the envelope system for budgeting:

  • Purchase an expandable envelope. Purchase an expandable envelope. You can find one online on the website The Find. Make sure that you purchase an envelope with many slots so that you can organize all your payments. You also need a small notebook for recording all your expenses.
  • Label your envelope. When you purchase the envelope, you will see labels that you can slide on each slot. Use these to label everything that you need to spend on. This includes your water bill, rent, electricity, groceries, gas money and other items that you need on a monthly basis.
  • Set aside money. Determine the average amount that you spend for each of the slots on the envelope. When your monthly salary comes, set aside some money for each of the slots so that you can pay immediately. When you take care of your monthly expenses first, you can determine how much extra money you have left. You can deposit the extra money that you have left in the bank so that you can save.
  • Record expenses in your notebook. Each time you pay your bills or go to the grocery, list down the exact amount in your notebook. This will help you keep track of your expenses as you use your money. Make sure that you do not go over your monthly budget so that you can save money.
  • Use the notebook daily. The notebook is not only for your monthly expenses. You can bring it with your wherever you go so that you can see how much you spend. Record all your expenses in your notebook including spending for coffee, snacks, gas, eating out at restaurants, watching a movie in the theatre, etc.
  • Assess your spending. After a month of using the envelope system, assess your spending. Open up your notebook and look at all the items that you have spent for. Look for ways on how you can save more money. You can do simple things such as making your own coffee or eating breakfast at home rather than buying from a coffee shop. When you compile all these expenses, you will see how much money you can save.

Now you know how to use the envelope system for your savings. Make it a habit to set aside some money for your needs first. Once you have a stable income or you have some savings, you can indulge on the items that you want. By making use of the envelope system, you will be more organized with your money.


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