Dave Ramsey describes using an system of envelopes to create a budget. This is done by writing a category on each envelope and placing cash in each envelope. I personally don't like to carry cash or have it sitting around at home so I have developed a method to keep track of my spending using virtual envelopes. I would like to share this method with you below.
Step 1
List out all of the categories for your budget on paper.
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Step 2
For each item in your budget create a cash account in Quicken. Title each of those accounts with "Envelope - 'category'".
'category' is the name of your budget category.
Step 3
Whenever you are paid, create a deposit entry in your main account for your payment amount.
Ex: I get paid my salary through automatic deposits, so if I were to get paid $2000 then I would create a deposit entry for my checking account in quicken for $2000.
Step 4
In Quicken transfer whatever is planned from your written budget for each category from your checking category.
Step 5
Whenever you spend money from your "Envelopes", keep track of it in your Quicken "Envelope - 'category'" accounts.
Things You'll Need
A Computer
Quicken Software
Pen and Paper - To create your initial budget.
All of your monthly bills.
Warning
It has been proven that you are less likely to spend cash then you would be to spend with a card, therefore, for you impulsive buyers, you would best be served by using Dave Ramsey's Cash Envelope System.
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