Envelope System for Budgeting
For many people, regardless if they are single, in a couple or part of a family, one of the top complaints is lack of cash and not being able to put money into savings. It can be frustrating and seem unachievable at times, but by taking a much simpler approach, you may find saving is much easier than you thought.
Gather your bills together and make two lists. On one list, write out the monthly bills that will come in regardless of what you do. This includes your utilities, phone bills, etc. On the other list, write out what you owe in car payments, etc.
The first thing you want to do is list the current payment and then the balance due.
Place an asterisk by the bills that you can pay off indefinitely such as department store credit cards, gas cards, and other credit cards.
Next take a look at all your bills and see what you can do to bring down the bill. If your water bill is $100 per month and you think you can lower it by taking showers instead of baths or by washing your car once a week rather than twice, then consider doing it. Another fast way to keep costs down is to make sure you keep the lights off in the house when you leave a room or when you're not home. Whenever possible use the temperatures of the season to heat or cool your home. During summer, close off windows with light colored heavy fabric drapes and use fans to circulate air. In the winter, use darker drapes to bring in more heat and consider using a space heater. Do what it takes to bring your bills down to a minimum.
For all remaining bills, try calling those that have been asking for payments and see if they will lower your interest rates to make your minimum payment more affordable.
After you've listed all that you owe, begin an envelope system and budget accordingly. Each envelope should be marked with the bill owed. When you're paid, drop the money in the envelope and pay the bill.
After the bills have been dealt with, start thinking of ways to save else where. Begin clipping coupons again but do it with the new age! Online, you can find a lot of coupon codes that you can use for savings on grocery items. You may also want to consider having a garage sale or opening an Ebay store to not only declutter your home, but to bring in some extra cash as well. You can get the children involved as well and have them take on odd jobs around the neighborhood to help them learn the concept of working for money and the importance of saving. The most important thing to keep in mind is to have a goal. Whether it be a buying a new house, a new car or going on vacation, have a clear goal in mind so that once you have something to strive for.
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