An excellent introduction to controlling spending, envelope budgeting is a proven low-effort system for managing your money. The basic premise is to divide your monthly budget into different “envelopes” and allocate your desired spending to each. Then, whenever you want to spend money, you take it from the relevant envelope. Once an envelope is empty, you’re done spending in that category for the month.
The hardest part of any habit is always the beginning, so some general operational tips:
- You’re almost certainly not going to have physical envelopes with cash in them. Instead, some software that can import your bank transactions and categorize them should mean categorizing spending is a sub five minute activity everyday.
- Don’t get too specific with envelopes. If you allocate different budgets for “restaurants” and “drinking out”, you’re just going to make the work more tedious. Instead use generic terms like “going out” and “groceries”.
- If you find yourself overspending on certain categories, you can make it easier on yourself by creating virtual cards for those categories. This has an added benefit for managing subscriptions where you can just cancel the card instead of having to deal with the dark patterns of subscription services.