Budget tips

One of the major benefits of budgeting is that you know where all your money is going, and you know how much you can spend on a certain category.  For example, I stick $20 per paycheck into a "Clothing" envelope.  When I need a couple new shirts, I check how much I've saved in that category and that's how much I can spend.

The key to doing this though, is that you need to ignore your checking account balance.  My balance may say I have over $1000 in my account, but that is deceptive.  I am saving up for many bills that are due at the end of the month (like my mortgage and electric bills).  It's dangerous to think that I actually have $1000 to spend because I might spend more than I should and not have enough to pay my bills.  The key to successful budgeting is to check the right envelope balance, not the checking account balance.