If you’re able to budget every dollar you spend into separate categories, that’s great. However, if that seems like too much for you, try a system that only asks you to monitor your money.
As advice site Daily Worth explains, not everyone needs to make sure that every cent in their budget is allocated to a pre-determined category. In short, who cares if your food budget goes over if you spent nothing in your entertainment budget that month? All that matters is reducing your spending, not the labels that are attached to your money. If that sounds like a less stressful system to you (it’s not for everyone!) then try simply monitoring your money:
What if, instead of trying to figure out how much money you have left to spend daily — for lots of different categories for the rest of the month — you only had to check one account to see how much money was in it? Decision-making made easy: If you have enough, you can spend it and if you don’t, you wait until next month. No more fumbling with a half-dozen envelopes full of cash or doing calculations in your head.
One of the simpler ways to do this is with multiple accounts. If your savings are automatically deducted and you use one account for your bills and a separate one for your daily spending, you only have to watch the later to make sure there’s money in it. When there’s isn’t, stop buying things.
Of course, categorisation has some benefits. Namely that it helps you find out where your money is going if you’re not paying very close attention. You might be spending way more cash on the movies during the winter or on eating out around the holidays. That information is very useful. However, you can decide which method is less stressful for you versus the benefit you get from that information.