I think it is about time your grandmother, Larry Burkett and Dave Ramsey migrate into the twenty-first century. Ah, the old tried and true envelope system. The simple idea of budgeting by putting your cash into actual envelopes and, gasp, when the money runs out the spending stops (SNL) . With the introduction of connected smart phones and instant access to online banking, the concepts of envelope style cash flow planning are now conveniently available for free to all Americans.
So, with all the ways to keep up with transaction and financial systems, why would anyone use envelopes? I believe the beauty of the envelope system lies in its simplicity and transparency. The system allows you to make one set of decisions at the beginning of the month and then you don’t have to keep receipts or track of anything; simply spend the money you have in your envelope. If you run out, too bad, plan better for next month. Or at least have a conversation with yourself or spouse and figure out where the money you need will come from. The second most useful idea of using envelopes is the fact that, especially if you share a budget with others, it is quite easy to see if there is money left for something. You don’t have to keep track of every dime you spend, but you can quickly open up an envelope and see if you have money to go out for dinner at the end of the month. As long as you can agree on the amount that goes into the envelopes, you don’t have to worry about overspending. Continue reading The Free Digital Envelope System