Budgeting Basics: The Digital Envelope System



The envelope system is a staple for the hardcore budgeter. A quick withdrawal from your credit union, a flash of cash into the appropriate envelope ($100 into groceries! $50 into clothing!) and your spending is until your next paycheck.

It’s a great system that has worked for millions of people, but it’s not always convenient. You may forget your cash at home. A wind gust could whisk away your hard-earned funds. Life is fantastic at finding ways to complicate your life.

We’re here to help you keep your money safe with an easy to use digital envelope system.

First things first – set up a budget based on how much money you need to spend every month for each type of expense.

Second, make sure you’ve got mobile banking on your smart phone, stash your credit cards and ensure your debit card is in your wallet.

Third, open up a new savings account for each type of expense. For instance, you could open several savings accounts with the following nicknames … these will be your “digital envelopes”:

  • Groceries
  • Car Repairs
  • Clothing
  • Entertainment
  • Utilities
  • Housing payment
  • Gas

Finally, deposit the money you’ve budgeted into each account every payday. For example: If you’re paid twice a month and your housing payment is $1,000, you would transfer $500 from each paycheck into your “Housing Payment” savings account.

Finally, when it’s time to pay a bill or make a purchase, transfer the money to your checking account from the correct Savings Account.  For instance, right before you go to the store to buy groceries, transfer the money from your grocery savings account into your checking account. Swipe your debit card to make your purchase and you’re all set.

Remember, if you’re about to spend more than you transferred, you should put some items back to avoid busting the budget or overdrafting your account!

Did you spend less than you thought? If you do so regularly, we would recommend reevaluating your budget. If it’s an infrequent event, put the money back into emergency savings or pay down a bill.

With the digital envelope system, you can keep your money safe and secure all while sticking to your budget.

Stop by an office, give us a call at 1-800-991-2221 or log into Online Banking today to open your new Savings Accounts and get started on your path to financial freedom!

Federally insured by NCUA.



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