The envelope method, notebook and pencil, and online software are all methods of _____.

Estimating your unexpected expenses

Planning for your future

Tracking your spending

Understanding your current expenses 

The right answer to the question “the envelope method, notebook and pencil, and online software are all methods of” is option (C) tracking your spending.

Explanation with Examples

Through tracking your spending you can monitor your expenses and get a better understanding of where your money goes. This will help you know about your spending pattern, gain control over your unnecessary spending and make better financial decisions. You can do this through different methods such as the envelope method, notebook and pencil, and online software.

Envelope Method

With the envelope method, you can track your spending through a physical approach which is often referred to as a cash envelope system. Here you make labelled envelopes for spending groups and allocate an exact amount of cash to each and every envelope depending on your budget.

Now throughout the month, you can only send the money allotted in the envelope for that specified category. Once you have spent all your envelope money, you will now have to wait for the next budgeting period or redirect money from other labelled envelopes.

Example: Suppose you have allocated $200 for “Fast Food” and put it in an envelope. Now every time you want to buy fast food you use the envelope money. That money will be spent anywhere else and you will also be conscious about overspending.

Notebook and Pencil

The manual way to track your spending with flexibility is by using Notebook and Pencil method. Here you will record all of your spending as well as your income in a dedicated notebook. This will help you see the flow of money you earn and spend.

Example: In a notebook, you record your income report as well as your expenses like food, rent, or, traveling. You also note down the amount, time, and description of each spending. Through this method, you will have a clear image of how you spend your money.

Online Software

To simplify the task of keeping track of your spending you can use online software or online budgeting tools. These software connects to your online bank account and your credit card to automatically categorize your transactions.

Example: You purchase a reputable online budgeting software and connect your bank account. The application will automatically track all of your spending and sort them into different categories. You can also generate reports and insights into your spending behavior to make the necessary adjustments. 


Tracking your spending is the right answer for “The envelope method, notebook and pencil, and online software are all methods of”. We have also provided a detailed explain why it is the correct answer with examples.

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