Set up envelope (category) budgeting

Set up envelope budgeting

Envelope budgeting means you set a fixed amount for each spending category (groceries, gas, dining out). You "fill" each envelope at the start of the period; when that envelope is empty, you stop spending in that category until the next period.

Steps

• Create a new budget. Go to Budgets → New budget → "Split my income."
• Enter your total amount. Enter your income for the period. Select the accounts this budget applies to.
• Create an allocation rule with fixed amounts. When asked how to split your money, choose "Create new rule." Add one allocation item per "envelope" (category or account). Use Fixed amount for each (e.g. $400 Groceries, $150 Gas, $100 Dining out). If you prefer, use Percentage for some and Fixed amount for others. Use Remainder for the last item if you want "leftover" in one bucket.
• Apply to budget. Click "Apply to budget." You'll see one line per envelope with the amount you set. Adjust if needed and save.
• Track spending. As you record transactions in those categories, your budget view shows how much is left in each envelope. When you hit the amount, you've "emptied" that envelope for the period.

You're all set. Your envelopes are ready. Stick to the amounts you set, and adjust next month if you need more or less in a category.

See also How to choose and set up your budgeting method, Set up a zero-based budget, and Income allocation rules.

Related articles

• How to choose and set up your budgeting methodChoose the budgeting style that fits you—from simple splits to category-by-category planning—and set it up in a few steps.
• Set up a zero-based budgetGive every dollar a job so income minus all planned spending and saving equals zero.
• Income Allocation RulesSet up rules to allocate income to categories, accounts, or goals automatically.