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Envelope budgeting is a method where each spending category gets a separate "envelope" of money. When the envelope is empty, you stop spending in that category.
Envelope budgeting forces hard constraints on category spending — you can't accidentally overspend on dining out without literally taking money from another envelope. The original physical-cash version was popularized in the 1990s; modern apps (Goodbudget, YNAB to some extent) implement digital envelopes. The method's strength is the friction it creates around overspending; its weakness is monthly bills don't fit naturally into the envelope model.
A budgeter loads $400 into the 'groceries' envelope, $100 into 'dining out', $80 into 'entertainment'. Mid-month, the dining envelope is empty. Choices: stop dining out for the month, or move money from another envelope (with the awareness that the source category will run short).
Compared to zero-based budgeting: Both assign money to categories upfront. Envelope is more rigid (no spillover) and visual; zero-based is more flexible. Compared to 50/30/20: Envelope is more granular per category; 50/30/20 is three big buckets.