The Beauty of Envelope-based Budgeting

Being that I live about a 4 hour drive from both mine and my wife’s parents, we usually end up making a weekend-long trip at least every few months.  Along with these trips comes the pure delight of paying out the nose for gas charges.

Traditionally, whenever it came time to take these kinds of trips we would scramble for money, miss a few meals, and scrape by with enough for gas.  Those days, thanks to using an enveloped-based budgeting system, are long gone.

Ever since we started using budgeting software that was based on the “envelope” methodology, we now have an easy and systematic way to set aside money for both planned and surpise trips.  Each month we have a set amount allocated in our budget to go to either the “Gasoline” or “Vacation” category.  When a trip is coming up, we simply allocate more money to that category the month prior.

Here’s the beauty of it.  If we don’t spend the whole budgeted amount in one month, the excess money in that category gets rolled over to the next month’s available budget. Case in point:  I looked at our budget this morning to see how much money we have available to spend on gasoline for our trip this weekend.  I had a whopping $90 extra in my budget to spend on gasoline on this unplanned trip.

So, something that always seemed to be an “extra” expense has now become something that magically fits into my budget plan.  And while I certainly don’t enjoy watching my money disapear as the numbers at the gas pump flash by, I will certainly be able to crack a smile a little easier today while doing so.

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