to dig deep into envelope budgeting, i must simplify the term first. hence, i need to make sure i understand the word budgeting... budget.
A budget (from old French bougette, purse) is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spendingso, basing from the definition, it can be simplified as... (income - expense = 0) where income is defined(in my own words) as any monetary device labeled with currency which was received and/or is available to be consumed by the calculated expenses. while expense is a calculation of how the income will be used.
some might ask where saving lies in the formula. since, i believe that it is one of the elements of expenses, let me extend the formula to: [income - (saving +other expenses) = 0]
i still have doubts on this calculations, though. so, any comments and suggestions are encouraged for a healthy discussion.
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