![]() If your income is R20K for example, your expenditure should be R20K as well making your ‘balance’ to come to zero, It’s the kind of money where you keep telling yourself that you will save or pay extra to your debts but never do and ultimately, you end up spending! This type of budgeting ensures that every Rand is accounted for, making sure that you do not have ‘idle money’! Idle money is money sitting in your account with no purpose. Using this method enforces self-discipline because it forces you to really track your spending on each chosen category. The envelope system works because there is a psychological effect to holding real money instead of a debit card. This means that every time you eat out or go to the movies or take the kids out for ice cream, you only take from that envelope until it runs out and if it does, you know that you have exhausted your funds for entertainment for that month. ![]() entertainment or transportation, and then you physically draw the money in cash and put it in an envelope labelled ‘Entertainment’. With the envelope system or method, you decide which category you want to tame i.e. So I started using the envelope method to control my spending towards eating out and it worked. In 2018, I realized I was spending an obscene amount of money with eating out. The envelope method is particularly helpful if you are trying to tame wild spending.
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