Spending less in 2013 might require you to be more hands on with the money exchange and use the Cash Envelopes system to really see where you money is going.
For some people using the debit card or the credit card is not a good idea. It is easy to swipe a card and not remember what you spent until you see it hit your bank account or you get the statement from the credit card. By that time, if you had over spent, it is too late. The damage is already done.
The Cash Envelopes system is a great way to get a handle on your everyday spending. This system is great for your entertainment money, gas, groceries, clothing, etc. Your monthly set bills can still be paid online or how ever you have been doing it but the expenses that are variables each month would be what you would use the envelope system for.
How can you set this up? Here are a few steps to get you started.
- Gather either ziploc sandwich bags, envelopes or maybe a purse size coupon organizer to hold the money in.
- Put the alloted amount for each budget line in each individual envelope. For example, Groceries will have it’s own envelope.
- When you make a purchase, take the money out of the envelope that the purchase reflects. Don’t borrow from other envelopes. This will keep you from over spending. (don’t borrow from Peter to pay Paul)
- After the purchase, place the receipt in the envelope. At the end of the month you will be able to look at the purchases from each category and evaluate your spending habits.
- Any money left over from that month’s budget can either stay in that envelope for special purchases in that category or moved to savings. I like using the extra money for vacation and Christmas.
Amazon has some great Cash Envelopes to check out. Even if you don’t purchase from Amazon, it will give you some ideas to make your own.