Envelope Budget: An envelope budget is a budget where you assign money to each category and deal with cash for several of your expenses. You take the cash out for each month and put the money into different envelopes labeled for the category. When you run out of money in that category, you stop spending. This is a good strategy if you are not good at tracking your expenses. Most people still pay their bills online through their checking account. In order to make this work, you cannot use your debit card for the categories that you have envelopes for.
How to Set Up Your Budget. Setting up a budget is a straightforward process. It helps to have a list of the bills that you must pay each month as well as your expected income. If you have not budgeted before, you can start by looking at your past three month’s expenses. Using your bank statements to break these into categories. If you have budgeting software, you can upload your statements and use the software to start to sort them.