Money Monday: Implement Your Budget

The envelope system 

Sitting down and creating a budget is not the most exciting thing you'll ever do but it's also not the most difficult. Knowing what your income is versus what you can spend is the first step toward be proactive about your money versus reactive.

However, sticking to the budget is the hardest part. Our friends from Young & Free Alberta recently shared a straightforward way to put your budget into action! Check it out:

If you’ve been following Y&F for awhile, you may have seen many topics about how to build a budget. I find building my budget to be so easy. I open Excel, plug in all of my income and expenses, allocate the leftovers to pocket money and emergencies and am ready to roll in the savings. At the end of the month, I’m still deep into my overdraft and wondering how I could possibly be so broke even though I have a budget. The problem lies in actually implementing the budget effectively.


Well according to Dave Ramsay, a well known financial author, the envelope system is the best way to make sure your budget doesn’t fail. It’s really easy to put in place. Instead of relying on plastic to pay for everything, take cash out and separate it into different envelopes according to your budgeted allotments.

For example, take out cash for groceries and any additional spending and leave the rest for automatic payments like utility bills and rent. Groceries go in one envelope, entertainment funds go in another envelope, money for gas in another, and finally I have an envelope for my personal spending money.


You can’t go back to the ATM and withdraw more money. You’re simply done spending! If you want to buy a brand new pair of running shoes that cost more than your monthly spending allowance, you might have to cut back on spending one month to buy the shoes the next month. It’s simple to execute and efficient to maximize your savings.

Before using the envelope system, I’d go shopping and spend a little more than I probably should have, thinking I’d cut back on going out for lunch to make up for it. The reality is that I never did cut back on eating out. Using the envelopes means I can’t overspend anymore and I’m not feeling like I’m too broke to indulge in a little retail therapy for myself.

I encourage you to give this system a try and see if it helps you stick to your budget better!


Be well, 

Lauren R.