The Envelope Method
July 10, 2022
Written by Rebecca Feeley
Back in the 50s and 60s when my dad and his siblings were little, my grandpa would come home from work on Friday afternoon with his week’s pay. My grandmother would then divvy the cash into various envelopes with “MORTGAGE”, “UTILITIES”, “TUITION”, etc. written on them. I’ve come to know this as The Envelope Method. You budget by setting aside money for fixed costs. Whatever money is “leftover” can be split between savings and free spending money.
You can modernize The Envelope Method by opening no-fee savings accounts (virtual envelopes) and nicknaming them…”Evie’s Preschool Tuition,” “Vacation Fund,” etc. Set a schedule for stashing money into each envelope. Perhaps it’s every paycheck, perhaps it’s once a month, perhaps it’s annually after receiving a bonus. Whatever works for you.
This budgeting method has been used in some form or another for generations in financially sound households. Maybe it’s the method that works for YOU!