Bangalore: Budgeting is the process of planning how your income should be distributed to pay your expenses. Envelop budgeting is an art where one keeps one’s money in different categories  like housing, utilities  food, medical, clothing, telephone, cable TV etc. If your expenses are more than your income, the process of budgeting also involves assigning priorities to the expenses you make. The two most important things before budgeting, is to identify your sources of income and your expenses.

There are a lot of people who have adopted envelop budgeting system and are successful. And are practicing throughout their life. It’s all about how serious you are about maintaining your expenses.

Here there are 5 more simple and effective guidelines for Envelop Budgeting that anybody can inculcate - be it a bachelor, married or retired.

1. Spend Money Wisely

When you take your money from an envelope and spend it, you will have to spend rest of the month with the money that is left. Identifying your expenses plays a vital role here.

Always try to keep 50 percent of your income as savings so that if there is an emergency you don’t have to rely on bank loans, on which you will end up paying high interest rate.

If you are still spending more than what the envelope contains, then you are just breaking the system. Better stop following it then. It’s not for you. 

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