Happy Tuesday!
The other day I posted a rant about payday
and direct deposit.
I also mentioned that I live by the envelope system.
I've had a few people ask what that is.
So, here it is...how I budget our money!
#1 Create a budget. Include everything. Groceries, date night, gas money, all bills, how much to save for savings and checking accounts, and whatever "fun" money you may want to save for. (For example, we currently have grocery, date night, Disney, savings, money being direct deposited into the checking account, gas money, a Miley envelope and a "save" envelope that I usually just throw "extra" money into. We also save all of our change in our "vacation" jar.)
#2 Figure out how much you want to put into each envelope for each paycheck. You could do a dollar amount or a percentage. It could be the same every week or a different amount each week. I use a money amount and it's different every week. (Example, one week we might put $80 into the Disney fund and only $30 the next week.)
#3 Fill your envelopes. On payday take all your money and divide it into the appropriate envelopes. Make sure you keep track of how much is in each envelope.
#4 Spend the money. Grocery envelope pays for groceries...not a new pair of shoes. Once the money is gone, it's gone. (I typically plan ahead with how much I'm going to spend on groceries and date nights, if it's only $50, that's all you get..nothing more!)
#5 Refill envelopes after payday and repeat!
Our budget is written out and goes until August 2011. I usually tweak it about once a month, but nothing major. It's usually adding more money, not taking it out.
We do not use debit cards. I think you spend more money if you are not carrying actual money. I only use a credit card if I'm booking hotels or plane tickets.
This system might not work for you, but I've been doing it since I was 16. I've saved for numerous trips, have money in a few bank accounts, and have never felt like I was missing out on something.
When we opened our bank account in March the woman didn't believe I was 24..she said she has never seen a credit score that high for someone my age. I am very proud of that and love that I know how to handle our money.
How do you save money?
