finicity

Benefits of Envelope Budgeting - Part 4

There are great benefits from applying the envelope approach to monthly budgeting. What you may not expect is that the benefits are not only financial, but also emotional and relational.

Benefit #4: Cash for periodic expenses. The area of periodic expenses (Christmas, vacation, car insurance, etc.) is where many are simply unprepared and hence use credit cards, payday loans, and other forms of debt to cover these items. By using this system you are finally able to set aside cash every month for their periodic expenses and avoid debt when time comes to make the purchase. Every periodic expense is treated just like a regular monthly need, with one key difference. The money accumulates in your periodic expense envelope until you need to make the payment.

Today's tip brought to you by Mvelopes and Monday4Life Coaching.