The classic method
You take cash for each category, such as groceries or eating out, and put it in a labelled envelope. You pay from the envelope. When it is empty, that category is done until next month.
It works because you can see and feel the limit.
Doing it without cash
Most of us pay by card, so the digital version uses a monthly limit for each category instead.
- Choose the categories that tend to run away: eating out, shopping, fun.
- Set a monthly amount for each.
- Look at how much is left during the month.
- Stop or slow down when a category is nearly used.
With Wollie
Wollie sorts your payments into categories and compares them to the budget you set. It warns you before you overspend, so each category works like an envelope without any cash.
Questions
Does envelope budgeting work for couples?
Yes. Agree on a limit for each shared category, and give each person a personal envelope.
Which categories should be envelopes?
The ones that vary and tend to run over, like groceries, eating out and shopping. Fixed bills do not need one.
This guide is general information, not financial advice.