You might have noticed that there’s a little line that moves across your Envelope bar during the month. This line can help you keep your budget!
Your Envelopes are represented by a green bar with a line that crosses through it. The green bar represents the funds you have left to spend in each Envelope. When your Envelope is full, the bar will be fully green. As you spend out of the Envelope, the green bar will decrease to the left.
The line represents where you would be if you were “on budget.” For example, imagine an Envelope with budget of $120 that is five days into a monthly budgeting period. Assuming there are 30 days this month that budget of $120 works out to about $4 a day (120/30 = 4). So, five days into the month the line would show where the green bar would be if you spent exactly $20 (4 x 5 = 20).
Unfortunately, this Groceries Envelope has $62.00 in expenses. The black line is showing the Envelope is “behind” by $18.90 — that’s the difference between the Envelope’s actual balance, and its theoretical on-budget balance. If the pace of spending from this Envelope continues, it will go into the red before the end of the month.
What do you do when you’re behind?
So what can you do if you’re behind the little line?
Option 1. Do Nothing
Being behind may not always be a problem. The little line assumes your spending will be consistent during the month, but this may not be true for you. If you spend more at the beginning of the month than at the end, you’ll likely be “behind” after the initial rush of spending. Wait for the month to end to see if your overall spending for the month still matches your budget.
Option 2. Stop Spending (for awhile)
If you’re behind in a discretionary Envelope, use some discretion and choose not to spend! Choose to live into the budget you’ve set for yourself.
Option 3. Change your Budget
If you can’t cut back, then it may be time to re-evaluate your budget. This isn’t a bad thing. Life brings change, so give your budget the freedom to change with you.
By comparing your actual spending to where you “should” be, you’ll be able to track your spending on even the busiest of Envelopes.