The envelope budgeting method is a cash-based system where you divide your monthly income into labelled envelopes — one per spending category — and only spend what is physically in each envelope.
Common envelope categories: groceries, eating out, petrol, entertainment, clothing, personal care, household, gifts. Fixed bills (rent, utilities, insurance) are paid by standing order separately — they don't need envelopes.
Physical cash feels more real than digital money. When the groceries envelope is empty, the groceries envelope is empty — there is no invisible overdraft. The system makes the abstract concrete and gives instant feedback on spending decisions.
Start with our free cash envelope tracker and envelope labels.