Mental checks are usually established by breaking mentally the allocations into units which can be related to actual expenditure. A family may usually check mentally to have an idea about the expenditure that has been done as well those to be done. It is a very simple method with out involving the use of a paper and pencil. A person need not have to spend any time by sitting and writing down the expenditures he has made. Many families may also find it easy to follow this method since they may not have to bother about the calculations. In this method, the family has no record for future references or for counter checks. Since the family has not maintained any record, at times, it leads to duplication of payments, expenditure etc. This method also has the chances of miscalculations or some items of expenditure may be forgotten.
A mechanical check which is frequently used is to set aside certain amount of money in cash in envelopes to be used for a particular item, and the actual disappearance of the money seems to show how much money is being spent. For example, a family may prepare a few envelopes on the various items of its expenditures such as food, clothing, medicine, etc. The amount of money as allotted in the family's budget is placed in these marked envelopes at the beginning of each month. At the time of expenditure on these items, the money is taken out from the corresponding envelope, and the balance, if any, is put back in the same envelope. The balance of money left in the envelope would indicate the amount of money available for expenditure for the remaining period of the month.
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