Hearth & Home Plan The Home

Budgeting Basics: The Envelope Budgeting System

With inflation biting and with our money having to stretch further than ever before I thought I would re-look at what the Bible has to say about managing our financial resources and get back to budgeting basics and what worked so well for us for so many years, the envelope budgeting system.

Envelope Budgeting System

I know that many people are struggling with the effects of inflation. All over Europe we are seeing people striking in an effort to ensure that wages keep up with inflation so that they can pay their bills and feed their families.

This is nothing new, history repeats itself. Inflation rises and falls, monetary systems build and crash, wars rage, distasters strike and all this can affect how far our money stretches at home.

What does not change is that God is good and what He has to say on how we manage and steward our money matters. His Word stands through all of lifes storms. What strikes me most is that our attitude towards money is really important.

Keep your life free from the love of money, and be content with what you have, for He has said, “Never will I leave you, nor forsake you.”

Hebrews 13:5 esv

A Biblical View On Money

We all need money to get by but how do we view it? What place does it hold in our lives? Do we spend it without thinking? Do we feel we have to have all the latest gadgets or see eating out as a need rather than a luxury? I believe that as Christians we need to carefully evaluate our attitutes towards money.

In our modern world we are bombarded from all sides (media, advertising, social media etc) on what constitues success and on aspirational living and asthetics. We need to begin by removing our focus from these things and focusing our hearts on what God sees as important.

Hebrews tells us that we are to keep our lives free from the love of money. If we love money so much then God will not be number 1 in our lives and our entire value system will shift to that of what the world values. Money is not evil but the Apostle Paul tells us in Timothy 6:10 that “the love of money is the root of all evil.”

When looking at how we as homemakers can be good stewards of our money, I firmly believe that we need to begin by examining our hearts and our attitudes towards the money in our care. We don’t want to be resentful or always coverting what we do not have. It makes for a dissatisfied heart that will never be satistied – another biblical truth!

Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.

Ecclesiastes 5:10

Budgeting: A Chore or a Joy?

The hard cold reality is the majority of us have to live within a budget in order to avoid falling into debt. I wonder how many people resent living within a budget and think that they would be far happier with limitless amounts of money. Ecclesiastes tells us that whoever loves wealth will never be satisfied with their income.

There is a great sense of achievment when you carefully plan out your spending and then stick to it and make it work! Honeslty, give it a go. You could set yourself a challenge to see how well you can do on your grocery shopping and see how much you can save out of your budget each month. What will you do with that extra? Perhaps put it into your rainy-day fund?

Seeing as though most of us have to budget and live within that budget you may as well do with joy in your heart and as an act of worship and service to our Lord God who is the source of all our provision.

What a privilege we have have as keepers of the home and daughters of the King to manage our homes faithfully and with excellence!

What is the Envelope Budgeting System?

I have always used the envelope system for my housekeeping expenses. I’m sure you know how it works, in essence, when you get your paycheck you draw out your budgeted housekeeping, divide it equally over the weeks in the month, then put that weeks’ money in your wallet leaving the rest at home. 

Key Takeaways for the Envelope Budgeting System

  • The envelope budgeting system is one way to manage variable expenses into categories using either digital (if that’s how you roll) or physical envelopes.
  • Once the money from that category is gone, you cannot spend it again until you have added more money back
  • Envelope budgeting can give you a more visual perspective of your spending habits.

A wise [wo]man thinks ahead; a fool doesn’t, [s]he even brags about it!

Proverbs 13:16

What Categories Can You Include In Your Envelope Budgeting System?

Each household is unique and therefore you are best placed to decide on your categories. Here are some common categories that may be included in this type of budgeting:

  • Groceries
  • Entertainment
  • Dining out
  • Fuel
  • Clothing
  • Christmas/Birthdays etc

“Suppose one of you wants to build a tower. Wont you first sit down and estimate the cost to see if you have enough money to complete it?”

Luke 14:28

A Step-By-Step Approach to Setting Up Your Envelope Budgeting System

I have recently given my own envelope budgeting system a bit of an overhaul so I thought I would take you through what I did step-by-step so that you can see how I have put it together as you consider putting yhour own envelope budgeting system in place.

Filofax Saffiano with envelope budgeting system

Step 1 – The Working Wallet

The key to implementing the envelope budgeting system is that it needs to be practical and fit seamlessly into your life. For me that means that I do not want to be scrabbling about in the bottom of my handbag to find a beaten up old envlope from which loads of change has manged to escape never to be found again. I just cannot be doing that.

So for this to work for me I wanted a pretty wallet that was contained and organised.

I chose to use the Filofax Saffiano Personal Compact Zipped organiser. They are not expensive for what they are. These organisers are excellent quality and will last a number of years plus they look fantastic!

The Saffiano is not bulky or heavy – an important consideration when you have to lug it about with you. It also has a zipper which means all is kept safe and contained in a neat and orderly fashion – BLISS!

It has space for all my store loyalty cards, coins and those handy rings. Each weeks stuffed envelopes are on those rings so I shall never have the excuse that I left an envelope at home.

“The plans of the diligent lead to profit as surley as haste leads to poverty”

Proverbs 21:5

Step 2 – Determine what envelopes you need

This is where you need to determine what categories you need. Not every envelope will be stored in my Filofax Saffiano. Your wallet should only hold the envelopes that you need access to each week. My Saffiano contains:

  • 4 envelopes for my grocery shops, one for each week of the month, the last week’s envelope will have a slightly higher proportion of money because it covers that extra couple of days leading up to the 30th or 31st.
  • Our family fun envelope- this is no longer left in the account. It’s drawn out and when it’s gone it’s gone.

The following envelopes are left at home:

  • Car Maintenance – I realised that I never actually put money for our car services etc. I just left it and assumed that it would come out of ‘disposable’, but from what I can understand from what I’ve read about the David Ramsey’s financial budgeting method is that this is not good enough – you actually have to take that money out whether physically or transferring it into a specific savings account set aside for that. 
  • Christmas Savings Envelope – I have also decided to start saving, making, buying for Christmas early this year so I have an envelope for that too. After all – Christmas is not a surprise, it comes around every year and we should plan for that to avoid going into debt.

**I’ve recommend ordering David Ramsey’s ‘Total Money Makeover’ book. It is really good and I am excited to learn more about his money makeover advice. I’m sure that this will call for a further financial makeover later this year.

Filofax with Budgeting Envelopes

“But godliness with contentment is great gain.”

1 Timothy 6:6

Step 3 – Making the Envelopes

There is no reason why your envelope budgeting system cannot practical and pretty!

I went to Hobbycraft and chose a pack of pretty scrapbooking cards from which to make my envelopes. Of course if you really wanted to you could simple buy a stack of zipped plastic filofax wallets, they do come in a variety of pretty prints but that could a little pricey.

I found a great free template from the blog My Life All In One Place. I downloaded the free envelope template, then traced it out on pretty card stock because I want them to be durable and last a while. Next, I made some pretty labels for each envelope, I used the Graphics Fairy  free images for some of them.

Envelope Budgeting System

Then using my 6-hole punch I punched my envelopes and popped them into my Saffiano.

At the beginning of each month I go into the bank and draw out all the cash I need to distibute across each category.

I split my grocery money into 4 – as I mentioned above, I allocate more money to the last two envelopes to make the end of the month a bit easier because you tend to start running out of a lot of things at that point. I also do this because there are not exactly 4 weeks in a month, longer months are more like 4.5 weeks in a month so factor this in.

I do hope that you have found this post helpful and if you do decide to impliment the envelope budgeting system then I’d love to see your take on it. Please do tag me on Instgram @buildingahouseholdoffaith in your envlope budgeting photographs!

“And my God will supply every need of yours according to His riches in glory in Christ Jesus.”

Phillipians 4:19

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(3) Comments

  1. Gill says:

    A few questions, that may seem silly. It all sounds wonderful when you start the month with envelopes full of notes, but what about half way through the month? Do you have coins jingling in each envelope ( and I know all too well how bulky British coinage is)? And if so, how do you stop yourself raiding one envelope for "another 5p"? And do you carry the whole amount around with you, including the Christmas savings etc? I'm a bit confused here 🙂 I must admit that I admire everyone that manages to work to a planned budget with cash. Sadly many of our Norwegian stores and facilities will NO LONGER ACCEPT CASH! Even our bus and train tickets cost significantly more if paid for in cash. It's a strange world nowadays!

    1. Shirley-Ann says:

      Hi Gill, thanks for your comment and questions.

      The Christmas savings and Car Maintainance envelopes are left at home in the safe – so I don't carry those around with me at all.

      In my Pennybridge organiser I have 4 envelopes, one for each week of the month, and that is my housekeeping/grocery money. Starting at the beginning of each week I will take that weeks money out of the envelope and put it into the cash section of my wallet. There is a zipper section for coins so I wont have any small change rattling about. When the next week comes along I will take the money from the next envelope and put it into the cash section and so on.

      Raiding one envelope for another – yes, it can be tempting to do so but this is where you need to exercise a measure of self-control :). At the beginning of each month I plan a months worth of meals on a calendar. It is from this meal plan that I am able to create a weekly shopping list, knowing exactly what it is that I need to purchase. If I stick to the shopping list (and I do plan baking and treats within that meal plan) I'm usually okay with keeping within my weeks allowance. If my husband comes shopping with me – not so much LOL. For really effective control in keeping within your allowance you might need to put an unnecessary item back if you find you are slightly over your budget. In the UK we have hand-held scan as you go devices so it is easy to see exactly what your shop balance is with every addition to your shopping cart.

      I was quite shocked to read that your Norwegian stores no longer accept cash – that's quite a scary prospect on many levels. I'm a bit of a techno phobe so the thought of being so reliant of technology is a little scary. It certainly is a strange world we live in now Gill.

  2. karen says:

    a lovely system – I don't have envelopes but I withdrawal from every paycheck a certain amount of money for certain things and that is it. It usually works for me, but it's just the two of us now.

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