Getting started with envelope budgeting

The idea

Budget the money you have, not the money you expect. Everything in your accounts goes into a category, like rent, groceries or the car insurance that's due in March, until nothing is left unassigned. When you spend, it comes out of its category. When a category runs short, you move money over from another one. Whatever is left carries into next month.

That's the whole method. The steps below set it up.

Five steps

1. Add your accounts. Add each checking and savings account and each credit card, with today's balance. Investments, a mortgage or a car can be tracking accounts: they count toward your net worth without being budgeted. The total in your budget accounts is the money you have to assign.
2. Give your money a job. In the budget, type amounts in the Assigned column until Unassigned reaches zero. Start with what's due before your next paycheck. Quick assign can fill categories from their targets or repeat last month. If there isn't enough to go around, it's better to find out now than on the due date.
3. Record your spending. Add transactions as you spend (amounts can be sums, like 42.10+8), or download a statement file from your bank, as CSV, OFX, QFX or QIF, and import it. You see each row before it's added, duplicates are skipped, and rows that match ones you entered are paired. Scheduled transactions add your paycheck, rent and subscriptions when they're due.
4. Plan for bigger bills. Bills that don't come every month, like car insurance, gifts or a yearly subscription, are what break most budgets. Give each one a target, such as an amount by a date, and UrBudget works out what to set aside each month so the money is there when the bill is.
5. Cover overspending. You'll overspend somewhere; everyone does. When a category's Available turns red, click it and move money over from a category that has some left. The budget isn't broken. It's showing you what the overspending costs, and where it comes from.

Credit cards

When you buy something on a card, the money moves from the spending category into the card's payment category, so the payment is covered when the bill comes. When you pay the card from checking, that category goes down with it.

A weekly routine

Ten minutes a week is enough. Import or enter what you spent, check that each transaction has the right category, assign any money that came in, and cover anything that went red. At the start of a month, assign the new month's money.

Coming from YNAB?

You already know the method. Paste a YNAB token into UrBudget and your budget comes over in one click, checked against YNAB's own numbers. See how switching works.

• Switch from YNAB
• UrBudget vs YNAB
• UrBudget vs Actual Budget