Envelope Budget Calculator
Allocate your income into spending envelopes and see exactly where every dollar goes with the envelope budgeting method.
Enter Your Monthly Income
Start with your take-home pay to create your envelope budget.
What is envelope budgeting?
Envelope budgeting allocates every dollar of income to specific categories before you spend it. Like physical cash envelopes, once an envelope is empty, you stop spending in that category until next month.
Try another budgeting method: 50/30/20 Calculator
What is Envelope Budgeting?
Envelope budgeting (also called zero-based budgeting) is a method where you allocate every dollar of income to specific spending categories before the month begins. The goal is to give every dollar a job, ensuring nothing is left unaccounted for.
Traditionally done with physical cash envelopes, modern digital envelope budgeting apps like Wallyo make this method more convenient while keeping the same principles. When you spend from a category, you subtract from that envelope. When the envelope is empty, you stop spending in that category until next month - this built-in limit is what makes envelope budgeting so effective.
How Envelope Budgeting Works
- Calculate your income - Determine your total monthly income after taxes and deductions
- Create your envelopes - Set up categories for all your regular expenses and savings goals
- Allocate every dollar - Assign specific amounts until your remaining balance is zero
- Spend from envelopes - Track each expense against its envelope and stop when empty
Common Envelope Categories
Start with these essential categories and customize based on your spending patterns:
Benefits of Envelope Budgeting
- Prevents overspending by setting clear limits for each category
- Makes every dollar intentional - no money left unaccounted
- Builds awareness of spending habits and triggers
- Flexible - adjust envelopes as your priorities change
Frequently Asked Questions
What happens when an envelope runs out of money?
When an envelope is empty, you have three options: stop spending in that category until next month (the intended approach), move money from another envelope (stealing from another category), or recognize you need to budget more for that category next month. The discipline of stopping is what helps you control spending.
How many envelopes should I have?
Start with 6-10 essential categories covering your major expenses. Too few envelopes lack detail, while too many become overwhelming to track. Common starter categories: Housing, Utilities, Groceries, Transportation, Entertainment, Dining Out, Personal Care, and Savings. Add more specific envelopes as you learn your spending patterns.
Is envelope budgeting better than the 50/30/20 rule?
Neither is universally better - they serve different needs. Envelope budgeting offers more granular control with specific limits per category, making it ideal for those who overspend in certain areas. The 50/30/20 rule is simpler with just three broad categories, better for beginners or those who want less tracking. Many people combine both approaches.
Can I do envelope budgeting without cash?
Yes! Digital envelope budgeting with apps like Wallyo is actually more practical than physical cash. You get the same spending limits and category tracking without the inconvenience of carrying cash. Digital envelopes also make it easier to track, adjust, and analyze your spending over time.