Success at Envelope Budgeting

              If you read my blog you know that I am a fan of envelope budgeting.  As a bankruptcy attorney helping those in central Indiana helping individuals with bankruptcy and debt settlement, I see how people spend money.  I also see how easy it is to spend money when you aren't on a budget and not even know you are doing it.  I've said it once and I'll say it again.....Hoosiers often see financial ruin  at the hands of death by a million debit card swipes.

              In my opinion, the best way to budget is the old low-tech standby your grandparents likely used....envelopes.  Now, I am sure that there are probably apps out there for those of you who are super high tech.  If you like that route better, great.  Whatever gets you to sit down and write a budget and to stick to it is good with me.  Nonetheless, I think one of the keys of successful envelope budgeting is accounting for spending categories that you may not use every month.  In an effort to aid those people who read my blog, I am going to do a listing of envelope budgeting categories that you may want to use in your own budgeting:

1.  Spending Money (Half for Husband and Half for Wife);
2.  Food;
3.  Eating Out;
4.  Entertainment;
5.  Clothing;
6.  Home Maintenance;
7.  Dry Cleaning;
8.  Gas;
9.  Vehicle Maintenance;
10.  Medical/Dental;
11.  Gifts;
12.  Haircuts;
13.  Pet Expenses;
14.  Kid's School/Sports Expenses;
15.  Homeowner's Association;
16.  Auto Insurance.

            This is by no means an exhaustive list of envelopes (real or virtual) you may want to use.  However, you will notice that it is a list of variable expenses.  These are the expenses that, to some extent, we can control.  If you have a mortgage payment or a car payment then that is typically set.  I also haven't used utility expenses.  I typically recommend getting on the budget plan and paying your utility bills online each month, but not keeping an envelope.

            The last 2 categories I used, HOAs and auto insurance, may or may not fit into your envelope budgeting.  I included both of these in the list because they are not necessarily due every month, which presents an opportunity to forget about them and not have the money necessary to pay them when they become due.

            Each person or couple must make the decision of whether they would like to be able to "steal" from one budgeting category for another.  I recommend that you not steal between categories except eating out, entertainment and food.  In my opinion, these categories are so closely related that the differences don't really matter.  However, I would recommend against "stealing" from dry cleaning, for example, to pay for a night out.

             Which variable living expenses does your family use in envelope budgeting here that I haven't discussed?  How has envelope budgeting helped your family?  Have you been able to stick to envelope budgeting?  Let me know.  I think no matter whether you are experiencing financial difficulties or not that this can be very helpful, but I am curios as to the experiences that other have had.  And, as always, if you live in central Indiana and are considering bankruptcy feel free to call me at 575-8222 to set up an appointment where we can discuss your options.
 
Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.