# Envelope Budgeting

*Everyday Money — Finicade finance glossary*

Envelope budgeting splits your spending money into physical or digital envelopes by category, and when an envelope is empty that category is done for the month. It works because it converts an abstract limit into a visible one — the friction of watching cash run out is far stronger than a number in an app. The classic failure mode is borrowing from the grocery envelope to cover the dining envelope, which quietly turns the system back into an ordinary unbudgeted month.

**Also known as:** cash envelopes, envelope system, envelope method

**Related terms:** [Zero-Based Budgeting](https://finicade.com/glossary/zero-based-budgeting), [Budget](https://finicade.com/glossary/budget), [Cash Stuffing](https://finicade.com/glossary/cash-stuffing), [Expenses](https://finicade.com/glossary/expenses)

Source: https://finicade.com/glossary/envelope-budgeting