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Re:Simple Bank Is Closing by 1123581321 on Friday January 08, 2021 @08:40AM (#25684594)
In the computer example, someone using the envelope system would decide not to buy the computer if the balance in the appropriate account was short. It’s just a different approach to timing and limiting purchases.
Re:Simple Bank Is Closing by saiya-jin on Friday January 08, 2021 @10:34AM (#25685667)
It still sounds a bit weird to me. If I need something, I will buy it unless I don't have cash for it. The concept of buying stuff just because I still have some spare cash in some bucket but I stop once bucket is empty feels so strange to me, some sort of forced self-check on compulsive buyers. If that's the case, I would rather look for solution in the root cause of such behavior rather than symptoms.

Maybe the motivation for some ordinary folks (that don't really need structured accounting, then it might be great) is different than mine. Or if I would be on a really tight budget combined with having to juggle tons of various mandatory expenses (household, kids, whatnot).

Re:Simple Bank Is Closing by pythonaut_16 on Friday January 08, 2021 @11:19AM (#25686191)
You don't have to buy something once the bucket is full. The idea is just to have the money allocated so it's ready when you need it.

For some things those will be fixed monthly expenses (rent, insurance, mortgage. Others will be variable, like grocery shopping, maybe clothing. And others will be bigger purchases like a computer.

It's just another framework or set of tools for budgeting your money out into the future. YNAB (You Need a Budget) has some decent articles on their blog about the concept. Dave Ramsey might be helpful too if you really want to understand the motivation behind this kind of system.

Re:Simple Bank Is Closing by mattarm on Saturday January 09, 2021 @12:38PM (#25702403)
> It still sounds a bit weird to me. If I need something, I will buy it unless I don't have cash for it.

Yes, and envelopes make it easier for many people to figure out if they have the cash for it. They let you "spend" the money the instant you get it, in a virtual way, even if you don't really need to spend it until later. This way you know that when it comes time to pay rent/mortgage, property tax, etc., you're good.

I think you are right though: I think the envelope idea is primarily targeted at people on a tight budget, where you really are trading off pros and cons of spending relatively small sums of money, and where the usual question is what gets sacrificed if this or that is purchased.

You suggest that in such a situation you'd look at the root cause of such behavior (e.g. compulsive spending). Often, the "root cause" is simply unawareness of spending patterns, and envelope spending is a useful technique for a lot of people. It isn't a crutch to cover up some sort of underlying personality flaw that has a deeper "root cause" -- It is just a way of tracking earmarked spending.

Re:Simple Bank Is Closing by 1123581321 on Friday January 08, 2021 @11:20AM (#25686202)
Yes, exactly—-you don’t have the spending problem that some people have, or don’t have the desire to save money to the same extent that some have.

Root cause analysis is of course best if successful and can be completed quickly enough.

Re:Simple Bank Is Closing by lazylizard on Saturday January 09, 2021 @08:28AM (#25700163)
what if its just a want? i can upgrade the gpu now or next month. I'd already bought a birthday gift this month.