How to Create Your Own Envelope Budget Spreadsheet

By Bonnie Conrad

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With so many people living paycheck to paycheck and attempting to live beyond their means with credit cards, it may be time to bring back what our parents and grandparents referred to as "envelope budgeting." Envelope budgeting forces consumers to live within their means by dividing their monthly cash into different envelopes, with each of those envelopes allocated to a different necessary expense. The modern version of this system can be done with virtual envelopes in a spreadsheet program.

Step 1

Log on to your computer and open your favorite spreadsheet program. Create a new spreadsheet and use each column to represent a monthly expense. These columns will serve as your virtual envelopes. For instance, one of your electronic envelopes may be labeled "groceries," while another may be labeled "entertainment" or "gasoline" and so on.

Step 2

Look at your checkbook or pay stubs to determine your take home pay for each month. Allocate this take home pay to each of your virtual envelopes. When doing the allocation it is helpful to have a list of your monthly expenses available. This will help you make a more accurate assessment of your expenses for the month.

Step 3

Use a debit card to make all of your monthly purchases. Make sure you record each of your purchases in your checkbook to avoid any potential overdraft fees, and make sure you keep each of your receipts. Label each receipt with the type of purchase so that you can enter it into your virtual envelope.

Step 4

Enter the amount of each purchase into the appropriate virtual envelope, then subtract that purchase from the total allocated to that envelope. Continue to subtract each purchase from the appropriate envelope. When you have exhausted all of the money assigned to that envelope you are done spending in that category until the next month rolls around.