How do I choose what categories to use cash envelopes for? It will change every month based on what your goals and priorities are. These variable categories are great candidates for your cash envelope system because you can determine the amount of money you are designating to them every month. This means the cost for these categories can change from month to month. The other stuff in your budget falls into the variable category of expenses. When you look at your budget, it can typically be broken down into fixed and variable expenses.įixed expenses are those expenses that always stay the same. What qualifies a budget category for a cash envelope? #Budget planner with cash envelopes freeNEED HELP SETTING UP YOUR BUDGET? USE OUR FREE BASIC BUDGET SETUP SHEETS. If you only have two cash envelopes, I want you to really look at your spending and add in a couple more cash categories in areas where you have the risk of spending too much money. Makes sense right? You want those high-risk categories where you have the most temptation to go over budget to be the ones with a finite amount of cash to spend. If you have one of those categories, for example, clothing, where you always spend more than you meant to, this category needs to become one of your cash envelopes. Like, we keep telling ourselves we will do better next month. Sometimes it can be hard to admit when we have a tendency to overspend in certain areas. You can have as many or as few as you want, but I want to caution you if you have less than four envelopes. I currently only operate out of four envelopes which helps keep my life simple (I have also controlled my spending in some categories I previously used cash for)! Anything beyond seven can be unmanageable. There is a sweet spot for the number of envelopes you should have and that number is between four and seven.
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