Budgeting 101 - Envelope Method

🗓️ Today’s Foresight - The Envelope Method for Budgeting

The envelope method of budgeting is definitely the most hands on version we’re going to talk about.

You can absolutely use actual real life envelopes and REAL CASH MONEY for this method of budgeting.

Or you can have virtual envelopes - your categories of spending in a spreadsheet or an app. The concept is the same though:

You can only spend the money in the envelope on that category.

🚀 Building the Future - Budgeting for All

Envelope Method

Build your budget

How much do you need to spend each month (or paycheck or week - your choice)? What do you need to spend on? Use these to set up your envelopes and categories.

Something like:

• Rent/Mortgage - $1,800

• Utilities - $200

• Food - $500

• Car Gas - $200

• Fun - $100

• etc. etc.

Label Categories: Literally write the name and dollar amount on the envelope and put that amount of cash in. Or again, set it as a your starting point on a spreadsheet or app. Most budgeting apps worth anything have this right out of the box.

Track Spending: Make sure to track the spending as well. The benefit of this method is you can feel and see how much you have left.

Build Savings: You can also have some longer term envelopes that you can build up over time. Like saving for a vacation or a bigger purchase. Perhaps a Christmas gift fund so you have plenty built up to spend when it’s festive time!

These categories would build up instead of being spent down in a month.

Control: When you run out of cash in that category, you are done for that month.

Adjust: If you ran out of cash too early in one month and had some funds left over in another category, adjust as you go forward to balance out your real needs.

Obviously, we live in reality so things change and things may be somewhat seasonal - my summer cooling and winter heating costs send my utility bill much higher than it does in the pleasant fall when I can have the windows open more often.

Overall, this is a very hands on and intentional method.

However, you will get to understand where your money is going very well. This will put you ahead of a lot of people that just spend spend spend and really do not understand how much money is going out the door.

😋 Frugal Food - Freeeeeeeze!

Every issue we’ll have a recipe or general food tips to save money and stay healthy

The temperatures are heating up! But this tip is ice cold.

One of the best investments we added in our family as we started growing was a garage chest freezer.

Specifically, it was to store extra milk for baby, but we use it all the time for vegetables, meats, and even whole precooked meals. Not just store bought freezer meals, but leftovers or big batches that we cooked in advance.

It just makes meal prepping for the week so much easier.

🗞 Financial News Bits

❓Q&A - Send us your questions!

See you in the future,

Foresights Foundry

We talk about family, finances, money, budgeting, personal growth, planning, and making data driven decisions through this newsletter and (work in progress) on YouTube.

Disclaimer: The information provided on this page is for informational purposes only and is not intended to be financial, legal, investment, or tax advice. You should consult with a relevant professional.