Envelope Budgeting without the Envelopes!


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I’ve discussed my method of budgeting on my Organized Mom blog, but I’ve just remembered that I haven’t explained how I budget our family on this blog yet!

A long time ago I was using the envelope system of budgeting.  This is where you deal mostly in cash.  You take all the cash out of your bank account and split it into envelopes in your house.  So your grocery envelope will have cash in it, electricity, mortgage, etc.  When the bill comes or when it’s time to spend that money, you take the cash out of the envelope and pay the bill (or go shopping).  This makes sure that you never overspend in any of your budget categories.

Now, I’m a technology junkie (have you noticed that about me yet?  😉 )  This method was a little “archaic” for me.  Plus I don’t like keeping that much cash around.  So then I moved to a big piece of paper.  I drew several lines on the paper and split the money that I currently had in my checking account and savings account into categories.  So say I had 400 in my checking account.  I would have columns labeled along the top with the various categories… Mortgage, Electricity, Gas, Groceries, etc.  Then I would split that 400 into the categories.  Like I would put $100 in Mortgage, $100 in Electricity, $100 in Gas and $100 in Groceries (actual numbers are for simplicity).  Now when I would go grocery shopping and I spent $50, I would come back to my piece of paper and deduct $50 from the grocery category and know that I had $50 left to spend for groceries.

Again, this was feeling a bit ancient.  So I decided to make an excel spreadsheet with the data, so I wouldn’t have to do the math myself.  I went a step further and added the amounts from each paycheck that need to go into each category.  So along the top I will put Hubby’s 1st Paycheck of the month.  In each column I will put the amount of each paycheck that should go into the category.  Again for simplicity I will use basic numbers.  So say Hubby’s paycheck is usually at least $300.  Along the top of the budget I will put 50 in the grocery category, 100 in mortgage, 50 in electricity, and 100 in gasoline.  Now when payday arrives I put 300 in my calculator and start deducting.  -50 on the calculator and then add 50 to the excel sheet.  Along the top will have the actual amounts currently in each category in case there is some left over from the last deduction to that category.

More recently I have added some additional tabs along the bottom of my excel sheet.  One is our debt reduction.  It’s pretty self explanatory in that we just put how much we’ve paid, and it will show how much is left.  This does not include interest, as it’s really just a gauge into approximately how much debt is left.  If you want to include interest I would just deduct the interest from the actual payment so it looks like you are actually paying less (which technically you are since you aren’t paying down the balance on the interest).

The last tabs are the monthly budget template and the monthly budget acutals.  Each month you create a new tab with the current month.  You copy the data from the template to the new month.  This is where you can put the dates you paid your bills so you know that all the bills that need to be paid have been paid, and you can keep track of what you are actually spending.  At the end of the month I total up the items in my account allocation (just the negative amounts) and add them to the month tab.  Then I put the amount that is going to carry over into the next month at the top of the positive section and delete all the amounts underneath.

Here is a link to my Monthly Budget excel sheet.  If you have any questions about it, just post it in the comments here, since other people may have the same question!

Good luck and happy budgeting!

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About the author

Sarah Werle Kimmel

Sarah Werle Kimmel is a digital parenting coach and family tech expert. She has spent the last 20 years of her career working as a Microsoft Certified IT Manager supporting over 100 small businesses. During that time she started Family Tech LLC to help families understand and manage the technology in their home. She has regularly appeared as a family tech expert on local NBC, CBS, ABC and FOX news affiliates, BYUtv and Studio 5, and has been invited all over the world from tech companies like Lenovo, Verizon, Microsoft, Dell, and Samsung. Find out more on her website SarahKimmel.com


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  • I came across your post–thanks for sharing your spreadsheet. I agree that envelope budgeting is great and started using it with actual cash to begin with. But we also felt the constraints of having to actually carry cash around–plus complications with using credit or debit cards, which are just often more convenient.

    So we developed a solution for envelope budgeting without actual envelopes that may be of interest to some.

    It’s called the Easy Envelope Budget Aid, EEBA for short, and it’s a handy little Android app + associated website service that is based from the ground-up on the envelope budgeting method.

    EEBA has a website, a mobile website and an Android app that makes it super-easy to check your envelope balances and record transactions at point of sale. Basically allows you to carry your virtual “envelopes” with you–so you don’t worry about carrying all that cash. It syncs everything automatically between multiple phones and the website and can be used with or without a cell signal.

    Our website is at https://www.eebacanhelp.com. Give us a try!

  • The timing of this is perfect. I was already sitting here with our budget and finances wondering what to do to save more and still do debt reduction. We are trying to prepare just in case I get laid off. I won’t know for another 2 months if it is going to happen and we want to be prepared. Thank you so much!