The first step to using the envelope budgeting system is to define what categories you'd like to separate your expenses into. In order to define those categories it's important to consider which of your expenses are fixed, and which are variable. An example of a fixed expense is a loan or mortgage payment; an example of a variable expense might be groceries or gasoline.
The nice thing about fixed expenses is that you can write them off if they're on the same schedule as your income. For example, if your income is $1000 per month, and your mortgage payment is $250 per month, you can just consider your income as $750 per month. As far as defining your categories goes, you can safely ignore your mortgage payment and just budget for a $750 per month income instead. However, if the fixed expense is on a different schedule to your income — for example a $30 per week gym membership — you will probably need to include it in your categories.
You will then need to decide which variable expense categories you'd like to keep track of. The decision here is primarily on how detailed you'd like to be with your categories. You might have a Groceries category that incorporates a weekly trip to the grocery store as well as lunch/coffee that is bought throughout the week. However, it might be in your best interest to separate those into 2 categories so that you can control your spending in each individually. Here are some example categories that might help you to get started:
- Video games
- Pet food
Once you have defined your categories each of them becomes an Envelope. You will deposit money from your income into the Envelope and withdraw from it as you spend.
Creating Your Budget
The next step is to work out how much of your income you'd like to commit to each category. Going back to the $750 per month example you might define the following budget:
Pet food: $50
In the application these amounts are known as Quick Deposits. You can use the Quick Deposit feature to fill your envelopes each time you receive your income.
If you have a variable income (e.g. commission based) it's a good idea to define your budget based on your minimum monthly income; you can then distribute your extra income across your Envelopes manually. This also extends to bonuses or other extra income: it shouldn't be factored into your Quick Deposits but would rather be distributed when received.
Envelope Budgeting is a very simple system, and it's an easy habit to get into. You'll find that your understanding of your financial situation has never been better.
Happy Budgeting! And don't forget to write a review if you find the app useful.
The basic principles of this application are simple. You create Envelopes, deposit money into them, and withdraw money from them.
Creating Envelopes is done by using the + button on the main screen's navigation bar.
You can give the Envelope a name, set the Quick Deposit, and choose an icon colour from the screen that is presented.
Editing and Deleting Envelopes
It's possible to change the name, icon, or Quick Deposit for an Envelope after it's been created. This can be done by tapping the Envelope you wish to edit from the main list, tapping Edit at the top right, and then tapping Edit Envelope at the top left.
A transaction is a withdrawal or a deposit. Creating a transaction is done by using the + & − buttons on the detail screen for an Envelope (+ = deposit, − = withdrawal).
You can set the amount for the transaction, change the date, add a memo, or make the transaction a Transfer by using the tab bar at the top of the screen that is presented. It is also possible to switch between these options by swiping left and right on the screen.
A Transfer is a transaction between 2 Envelopes. If you are creating a deposit, the deposit amount will be withdrawn from the Transfer Envelope, and vice versa. If a Transfer is modified or deleted it will affect the balance of both Envelopes. However, if one of the Envelopes is deleted, the Transfer will change into a regular withdrawal/deposit to the remaining Envelope.
Editing and Deleting Transactions
Transactions can be edited by tapping on an Envelope in the main list, and then tapping on the transaction you'd like to edit from this screen. The edit screen shows the same options that were presented when the transaction was first created.
To delete a transaction, tap the Edit button at the top right. Transactions can then be selected from the list and deleted by using the delete button on the bottom toolbar. All the transactions in the Envelope can be deleted by tapping Delete All.
Note that once transactions are deleted they cannot be recovered.
When you're finished deleting transactions, tap the Done button to exit the editing mode.
The Quick Deposit feature is to deposit money into multiple Envelopes simultaneously. It is accessed by using the quick deposit button on the main screen's navigation bar.
This screen shows a list of all Envelopes that have a Quick Deposit value set. By default, all of the Envelopes in the list are selected. You can deselect those that you do not wish to deposit into by tapping them, and then tap the Deposit button to create all of the transactions.
In this screenshot, the green highlighted icons show the selected envelopes and the non-highlighted icons show unselected. So this operation will not deposit into the Toiletries or Clothing categories.
The list of Envelopes can be sorted in any order. To change this, just tap the sort button on the main navigation bar.
And then use the handles that appear to move them to your desired position. Once your finished tap the Done button to exit the sorting mode.
The passcode lock feature will lock the application when closed to protect your data. It also supports using the Touch ID sensor if your device supports it. Passcode lock can be enabled by selecting Passcode Lock from the settings screen.
The passcode can also be edited or disabled from this screen, and you can change the delay before the passcode is required after closing the application.