Having “Enough” Money Is A Great Reason Not To Spend Money

When you’re broke it’s easy not to spend money. In fact, you’re a master budgeter because you have to be. You learn to do without because there is no other choice.

But, once you finally start makin’ those clams – it is essential that you build a healthy relationship with money and stay on budget.

Life Happens

I am the oldest of three girls. My middle sister works in criminal justice and she and her husband have always had more than enough money.

My baby sister, however, has struggled a lot more when it comes to money. She had her first baby very young and has had a hard time “catching up”.

She worked as a hairstylist out of her home for several years and had two more babies. But, about six years ago she started going to school to get her nursing degree and finally graduated and is working as an RN at a hospital.

She called me a few months ago and was pretty upset. She said, “I don’t understand how I’m making more money than I ever have – and, I’m still broke.”

It was a really poignant statement because – in that moment – I realized how much self-control it takes to spend smart when you actually have money to spend.

Household Budgeting Is A lot Of Work

I graduated with an MBA seven years ago and have always managed our budget. I don’t really think about it. It just comes naturally to me and I’m able to easily think ahead and plan for the various events that are coming up.

BUT, my baby sister was on the other end of the phone frustrated and sad and really struggling. So, I told her I would help (of course!)

How not to spend money:

Determine what kind of budget is best for your situation

We decided that an envelope budget would work best for her. I highly recommend an envelope budget for anyone (you or someone you know) who is just starting to build a healthy relationship with money.

In other words, they don’t understand the true value of it and haven’t learned good spending habits.

For instance, $20 will buy about five gallons of gas for your car. It will also buy a bag of cereal, a gallon of milk, a loaf of bread, a jar of peanut butter and a jar of jelly – which you could eat for lunch for a week. Or, it could buy one large pizza.

Using an envelope budget helps a person to realize how much control they have when spending money. Once you connect with that you start to see how your life improves when you get organized.

Learn how to use your chosen budget

Since my sister and I implemented an envelope budget, I’ll talk about that here. There are three basic steps for the envelope budget:

Decide how long each budget period will be

I.e., monthly, bi-weekly, weekly, etc) This is usually determined based on how often you get paid.

Determine the spending categories that you will use for each budget period.

For instance, if you decide on a bi-weekly budget cycle, you will need a “Rent or Mortgage” envelope in one of those cycles but, not in the other one.

Fill each envelope with as much money as you need for that category during that budget cycle.

For instance, if you have a weekly budget cycle you will need to take your monthly grocery amount and divide it into each of the four envelopes. Once the grocery envelope for the week is empty … you CANNOT spend any more money on groceries that week.

This is how the envelope budget helps to build a healthy relationship with money – it makes the dollars that you have available very tangible so that you know to plan for the next few days if the gasoline envelope is getting low.

Some Notes About Categories

Some of the categories that my sister chose for her envelopes were:





Electrical bill

Payment for car 1

Second car payment

Car insurance

Credit card 1

Additional Credit card

Cell phone

Health and Beauty


Dining out


**pro tip** When you are thinking about what your envelopes should be – it’s helpful to look through your online checking account and see what you are spending money on.

This will help you to develop your categories and get an idea of how much money to put into each of your envelopes.

Ways To Track Your Envelope Budget

Next, we had to find a tracking system for her envelope budget. With so much of our “money” being electronic – it’s hard to stick with a budget where you have to physically put cash into an envelope.

In our house, I use a Google Sheets spreadsheet to manage our envelopes and reconcile with our online bank accounts.

But, if you’re new to the envelope budget system like my sister was, a spreadsheet might be a little overwhelming.

So, I found a website called and we signed her up for a membership. When you sign-up with Good Budget, they have a free membership that includes 10 envelopes to start.

If you don’t have any credit cards or other types of revolving credit – 10 envelopes should be plenty. If you need more envelopes – it’s only $45/year for the upgrade to unlimited envelopes.

It's easy to budget when you don't have any money. Learning ways to save money becomes a necessity because there isn't enough money to pay your bills. But, what about staying on a budget when you finally have a steady income? Do you know how to spend money smart, stick to your budget, and still live frugally to save money? How is your relationship with money?

How To Use Good Budget

The website is super easy to use and navigate. I actually just gave my sister the username and password information after I created her account and told her to see if she could figure it out. She’s a total budgeting newbie and was able to easily move around on the site.

Add Your Envelopes

When you visit the website, you will need to sign-up for your membership. Next, you can start entering your envelopes. If you have bills that absolutely must be paid on the 1st of the month (like rent or mortgage) I recommend making two duplicate envelopes for those and I’ll tell you why …

If you are paid every two weeks, there is the occasion that you will need to pay next month’s rent with money from one of this month’s checks because your 1st check for next month will come after the 1st of the month has passed. (I hope that’s not too confusing!)

Creating duplicate envelopes for those 1st of the month bills helps to build-in a reminder for you to carve out some money and hold it in the envelope until the 1st of next month.

For instance, let’s say you get paid $2,000 every two weeks on the first and the fifteenth and your rent or mortgage is $1,600. You may not be able to cover all of the bills that are due on the 1st with your $2,000 check because $1,600 of that automatically goes towards rent or mortgage.

To off-set that, you can split your rent so that some of it comes from the check on the fifteenth (of the previous month) and some of it comes from the check on the first.

Add Your Accounts

Once you have all of your envelopes entered – you will need to decide if you are going to have these envelopes set as monthly or otherwise.

For most people, a monthly “calendar” budget will work just fine but, if you are paid every two weeks, then you’ll want to set your envelopes to reflect that.

Next, you will add your accounts. These are the places where Good Budget will hold your money. If you have a checking account – and there is a balance in it when you start, you can add that balance to your Good Budget account.

However, if you are holding that balance for pending charges, then don’t add it to Good Budget. You can just add the name of the account but, leave it with a zero balance.

Your accounts in Good Budget are not “connected” to your bank account in any way. Your Good Budget accounts are just a way for you to keep track of where your money is “promised”.

In other words, which envelope categories you will be spending it in.

Your (account total) and your (envelope total + unallocated) should always match each other.

With the free version of the program, you can enter in one account. This works fine if you only have one source of income – even if you are paid more than once per month.

However, if you have more than one source, you might want to upgrade to the full version of Good Budget. For instance, if you pay certain bills from specific accounts. You will want your Good Budget to reflect that.

Add Your Income

Next, you add your income to your account. This is done by using the ‘add transaction’ button on the top left of the screen.

You can label the transaction as “income” and then enter the amount. You will enter the date that you received it so that you can keep track of which budget cycle you are in.

This is where having something like Good Budget is so amazing. Because, you have your envelopes set up in months but, you can add your income in every two weeks.

So, you can look at your Good Budget reports mid-month when you get your second check, and you know exactly which bills are still left to pay.

Also, if you added your “rent or mortgage” envelope in twice like we discussed earlier, you will be able to check and see if your paychecks are going to fall in such a way that you need to pay next month’s rent or mortgage with this month’s check.

Make sure that you only add income that you have already received. Do not add income that you are expecting to receive.

Fill Your Envelopes

Once you have added all of your income you can then begin to fill your envelopes. Remember none of this is “attached” to your checking account. So you aren’t making any real-time changes to your money.

You are simply creating a very sophisticated ledger to make better money decisions. To fill your envelopes you can just click “fill envelopes” and add as much money as needed to those envelopes that you are paying from this specific income cycle.

Remember, you have added the income that you have in hand and it is waiting in the ‘unallocated’ account. So, you want to go ahead and allocate it to those envelopes (or bills) that you will be paying from that income.

Skip the envelopes that you will be paying from your next check.

As you are filling each envelope, you can choose to set the fill amount or allow it to rollover. I recommend that you choose to set it.

The reason is, at the end of the month when all of your envelopes have been filled and then reconciled with paid transactions, there will be a balance of money left over.

For instance, you may have created an envelope for clothing and filled it with $80 but, you didn’t buy any clothing that month and therefore you have an overage of $80.

There are two things you do with this:

You use that information to guide your decisions when filling envelopes for next month.

Do you really need to budget $80 a month for clothing or, is that money better spent elsewhere?

You withdraw that $80 at the end of the month and you put it into a savings account.

This is where having a budget is amazing and using Good Budget is super easy and helpful. At the end of the month, you can easily take a look at all of your envelopes, tally the overages and withdraw that amount of money from your checking account and put it into your savings account.

The first month that my sister used this system and she tallied her overages – she stressed for three weeks that she had forgotten to pay a pile of bills because she had THAT much money in overages.

She put $1,200 into her savings account after just that first month using an envelope system and Good Budget!!

That means, she was spending $1,200 a month on things that she didn’t need to. She was nickle and diming her way to being broke even though she was making way more money than she ever had before.

Record Your Expenses

The final step is to add transactions each time that you spend money out of one of your envelopes.

For instance, if you have $250 in your grocery budget and you go to the store and spend $80, you will need to go into Good Budget and add a transaction for $80 from the grocery envelope.

The cool thing about the program is that you can access it via app or online so there’s really no excuse to not do the reconciling.

Not to mention that if you don’t reconcile – you can’t see at the end of the month how much you have in overages and make that nice fat withdraw for the savings account!!

What kind of budgeting system do you use for your household? Do you know anyone who needs to build a healthy relationship with money?









You Might Also Like

No Comments

Leave a Reply