Benefits of Envelope Budgeting - Part 1
With this approach you allocate cash you have on hand to spending accounts that are set up for a specific purpose, and then spend from the balance in those accounts. It’s a proactive approach to your finances that completely takes out the guesswork of money management.
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 #1: Living within your income limits for the first time ever. Many people overspend not because they don’t have enough income, but because they don’t know or “can’t see” where the money is going every month. By proactively using the envelopes system our users are finally able to see where every dollar is going and they can proactively pre-fund each of their monthly categories before spending the money. This gives them the freedom to live within their current income and helps them to not spend money they don’t already have.
Today's tip brought to you by Mvelopes and Money4Life Coaching.