Envelope budgeting is a simple method of managing finances by allocating cash into different envelopes for specific spending categories. Each envelope represents a budget category, such as groceries, entertainment, or utilities. Once the cash in an envelope is spent, no more money can be used for that category until the next budgeting period. This technique helps individuals visualize their spending and encourages them to stick to their budget. By using physical cash, it limits overspending and promotes mindful financial habits. Envelope budgeting can be adapted for digital use as well, using apps that simulate the envelope system.