Envelope budgeting is the oldest budgeting method there is. At the start of the month you decide how much goes to groceries, gas, dining out, and so on, and put that cash into a labeled envelope for each. You spend from the envelope. When it is empty, that category is done until next month. Money can be moved between envelopes, but only on purpose.
The original version used paper envelopes and cash. Most people now use a digital version: separate bank sub-accounts, category balances in a budgeting app, or a set of prepaid cards. The mechanism is the same. Each category has a hard limit that is visible before you spend, not after.
Example: $600 in the groceries envelope. On the 20th it holds $140. That number tells you what the next ten days of shopping can look like, without any math. Contrast that with a credit card statement that arrives after the month is over and reports what already happened.
The method works because it makes limits physical and forward-looking. It works less well for bills paid automatically, which do not need envelopes, and for large irregular expenses, which are better handled as sinking funds.
The common mistake is creating too many envelopes. Five or six discretionary categories are manageable; twenty become a chore. The second is borrowing from next month's envelope, which quietly turns the system back into a credit card.