How effective is the envelope system?

[eLdavis]

When it comes to saving or budgeting, an envelope system is one where you put a certain on different envelope. Lets say you have three envelope, then you put in any amount of your choice on each envelope, then you allocate each envelope for different expenses. One could be for feeding, another for electricity and so on. The moment you exhausted the money on each envelope, it means you are done spending on that particular category for the month. What do you think of this system?

 

[Passionate-writer]

When it comes to saving or budgeting, an envelope system is one where you put a certain on different envelope. Lets say you have three envelope, then you put in any amount of your choice on each envelope, then you allocate each envelope for different expenses. One could be for feeding, another for electricity and so on. The moment you exhausted the money on each envelope, it means you are done spending on that particular category for the month. What do you think of this system?

I have never heard of this kind of saving strategy. However, I think this is quite similar to assigning a specific kind of budget for a specific kind of plan. This is a common thing in many places. For example, this could be a common budgeting strategy when you run homes. You have to allocate your funds and use funds in many different ways.

 

[Augusta]

I have been using this method of saving money for a while now and it does help . You would be able to budget properly this way when you stick to the rules that govern envelope method of budgeting.

 

[Passionate-writer]

I have been using this method of saving money for a while now and it does help . You would be able to budget properly this way when you stick to the rules that govern envelope method of budgeting.

Well, the only problem with this kind of plan is the fact that you may end up assigning the wrong amount of money to the wrong kind of budget plan. This is why it is very important to assess the amount of money and create a budget properly. This could be a hard thing to do.

 

[Augusta]

Well, the only problem with this kind of plan is the fact that you may end up assigning the wrong amount of money to the wrong kind of budget plan. This is why it is very important to assess the amount of money and create a budget properly. This could be a hard thing to do.

You are right as I do this too. I don't just start giving an amount to any item I just make a good research then look at the item to budget properly for it. Budgeting properly is the key here.

 

[Suba]

The envelope method for saving and budgeting is an easy and very simple method and will be very suitable if you always shop with cash payments and if you only have income from one source, for example a monthly salary. which are immediately divided into envelopes that have names, for example basic needs, secondary needs, savings, investments and paying debt installments, etc. so the number of envelopes can be adjusted according to needs. But the envelope method will be very troublesome if you have income from various sources and with different receipt dates.

 

[Passionate-writer]

You are right as I do this too. I don't just start giving an amount to any item I just make a good research then look at the item to budget properly for it. Budgeting properly is the key here.

It is always a better idea to calculate how much money you will need in order to make it possible for you to reach your goals. This can be really effective, especially when you have a limited budget. There are many people who never spend money and they have to prioritise their needs first instead of prioritising their wants.

 

[pinway]

This may work but we still have to consider that if there is not much fund to place in the envelope that would not work out. When the salary is under an ATM system we can just transfer and pay bills immediately through digital payment and there is no actual cash that passes through our hands.

 

[Augusta]

It is always a better idea to calculate how much money you will need in order to make it possible for you to reach your goals. This can be really effective, especially when you have a limited budget. There are many people who never spend money and they have to prioritise their needs first instead of prioritising their wants.

Yesh I don't even think it is necessary to prioritize your wants. Just go for your needs and leave your wahts especially if they are necessary