Money Saving Tips - Week One, Use Cash Envelopes
We are on a roll with our Money Saving Tips Series!
Did you do it?!
Your budget?
Did you write everything down that you spend money on?!
It's ok if you've missed some things. You can always add them in and re-balance your budget. It's important that you do. You want to make sure that you are accurate with money, keeping track of how much comes in, how much you keep and how much goes out. That's how you save more and spend carefully.
Ok, so you have your monthly budget in hand. Now what?!
I recommend that you assess where your money goes.
If you are married, living common law, etc. then do this exercise with your significant other.
Set a goal. Do you want to save up for a big trip. Need a new car. Want just a bit of breathing space?!
Whatever is important to you. Set it as a goal.
Once you have your goal, look at your monthly income and your monthly expenses.
Here's a few sheets that I made up for you to use.
{Yes, it's fun and pretty, shouldn't everything we do be?!!}
Total your monthly income and deduct your monthly expenses. Is your total in the positive or the negative? Do you want to have more left over at the end of the month?
This is where you should make some adjustments to your budget or just roll with what you have for the first week.
Here is what you have to do next.
Everything that you pay for each month that are fixed and planned expenses ie. mortgage, utilities, property taxes etc., you can schedule and plan for, by keeping the funds in your bank account and paying them automatically. However, all the other stuff, like groceries, gas for your car, clothing, entertainment, misc. like trips to the beauty department at the drug mart {oh, that's my big one}. All the other stuff you're spending money on {your variable spending}, you are going to start using cash and only cash for those.
Why? Those purchases are what can suck your budget dry and make you reach for the credit cards. Consumer spending and debt = bad news.
Next, total what you need each week to cover each of those categories, take the cash out of your bank account each week, put your money in individual envelopes like these...
Yes, they too have to be pretty because, well, it just makes life more fun for me. Here's the link to show you how I made my own envelopes, and it cost me pennies. You can even use wrapping paper, which I know you have a huge selection of at the moment!!
Now, you are to use cash and cash only. When you run out - guess what, you can't buy that shiny, dangly pair of earrings that you just have-to-have. Or, you can't get a grande, soy milk, extra hot, extra pump chai latte. {I'll show you how you can in fact have everything you want and stay within your budget in the next week's tips}.
Repeat after me, cash is king.
So, calculate your weekly needs, have your cash sorted in your envelopes, and when you are out and about, use your cash for spending.
At the end of the week, it's very important that you celebrate your discipline, and also make adjustments for the following week if needed. Fill your envelopes and make sure to stay within your monthly budget!
Let me know how you do. I'd love to hear about your experience.
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