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Making ends meet: Start your budget with the envelope method

The envelope method is an innovative way to budget and save money. Picture: Jcomp/Freepik

The envelope method is an innovative way to budget and save money. Picture: Jcomp/Freepik

Published Jun 29, 2022


In tough financial times, people are looking for innovative ways to budget and save their money.

On TikTok and Instagram, a popular way of saving and budgeting is the use of the envelope method. Many of you may remember your grandfather and mother using this method to keep a tab on the family’s finances. And, even though most money transfers are done via electronic transfers these days, there is a growing number of locals on social media applauding the envelope method as helping them stick to a budget.

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What is the envelope method?

With the envelope method, a person’s income is divided into different categories. Then the total allocated amount of money for each category is put in an envelope. For big ticket items such as rent or bond repayment, these will obviously will come directly off from your bank account. This method works best for expenses post your monthly set ones.

TikTokers have taken the envelope method a step further with the budget binder. It involves the same method of dividing your income into different categories but the money is put into the sleeves of a binder instead of envelopes.

On TikTok, people are seen with their colourful binders as well as the binder sleeves which are labelled with the different categories.

@ohana_co1 Come and budget with me for end of May #southafricatiktok #binder #fyp #fypシ #foryoupage #savemoneyhack #budgeting ♬ original sound - Britton

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How you can do the envelope method:

1. Draw up your budget. This means dividing your money into categories such as rent, groceries or savings. Some things you will not use cash for as it will come out directly from your bank account. However, things such as groceries, entertainment, petrol, clothing and so on can be used in the envelope method.

2. Assign each category to a single envelope. Make sure the envelope is the right size to fit the money that you will be putting in the envelope.

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3. Break down your income into the various categories that you have included in your budget.

4. Put the exact amount of money allocated for each category into the correct envelope. And when the money is done, it’s done for that particular expense.

5. Any left over cash, can be added to another envelop such as your date night envelope or can be kept as a top up for your next week. Some people even take any left over money from an envelope into their savings envelope.

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You can follow the above steps if you are using a budget binder.

It’s important to note the envelope method may not be suitable for everyone considering that many people prefer to do their transactions digitally.

However, this method can help you kick-start your budgeting and savings journey. It will also will help you get a grip of where you are overspending. In effect, it brings some consciousness to your spending.

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