Tips for Using the Envelope System to Save Money

How many times have you had more bills than money at the end of the month? For some that happens every month while others it only happens occasionally. Whether you've had this happen or not, it's not a bad idea to look at your finances to see what you can do to stop or prevent it from happening. Here are some tips to help you save money.

One of the best ways to prevent overspending is to use the envelope system. While it takes dedication to make this system work, you'll find when you make it work each month, the end result will help you with your money.

When you decide you're going to do the envelope system the most important thing to remember is you pay cash for everything. This will help you to spend only what you have. It's easy to spend money when you use a debit or credit card, but harder when you only have a certain amount of cash in your purse.

To get started you need to get enough envelopes to cover every single bill you have. You'll want to write the vendor name on the outside of the envelope along with the due date and the monthly payment. You'll want to keep them in a place where they fit well and you'll have easy access to them. Keep them in order by the day you pay them so you don't forget to pay something.

While most vendors don't take cash any longer or they don't have local offices that accept payments, they do offer internet, mail, and phone options for payment. If this is the case, the most important thing to do is use your checking account specifically for these types of payments only. You need to pay cash for everything you can so you don't overspend. Groceries, meals out, bills, and any extra things you need should be paid with cash.

Are You Broke and Tired of It?

By now you are saying to yourself, how do I get my $1000 Emergency Nest Egg Fund set up? What's my first step? Gabby and Jay are going to tell us how they did it! For one week Gabby and Jay tracked every receipt and purchase they made including the ones for their computers. They kept all their receipts and expenses and wrote them down in a note book. They included every purchase they made even small purchases for sodas, snacks, lunches, dinners, breakfasts, groceries, going to the movies, purchasing snacks, gas for their cars, cigarettes, and any other items they purchased that week. Jay and Gabby also wrote down their weekly spending for pay pal accounts, group on offers, credit cards, game accounts and iTunes accounts on their computers.

Gabby saved all her receipts for one week and totaled all her receipts. She looked at her first couple of receipts and realized she had gone to Starbucks with her friends 5 times that week spending $4 a day for Coffee, a total of $20 for the week. She decided to go to Starbucks with her friends three times the next week, and invites her friends to share coffee at her house two days a week, and puts the $8 she saved into her Piggy Bank to start her $1000 Emergency Nest Egg Fund. In a months' time Gabby realizes she will save $32 and in 6 months she will save $192 towards her $1000 Emergency Nest Egg Fund.

Gabby continues looking at her receipts and realizes she bought 3 packs of cigarettes a week at $5.50 a package, $16.50 a week. Gabby says, "I spent $66 a month on cigarettes. If I cut down my smoking to a pack a week I can put $11 into my "Piggy Bank" for my Emergency Nest Egg Fund each week and in a month's time I will have saved a total of $44 in my "Piggy Bank" toward my $1000 Emergency Nest Egg Fund. In 6 months I will have saved $264 toward my $1000 Emergency Nest Egg Fund."

Gabby says, "If I continue to go through my receipts and eliminate the items I don't need or cut down other expenses I will have my Emergency Nest Egg Fund in place in less than 6 months. By cutting back on Cigarettes and coffee I've already saved $76 this month. I will go through my receipts and look at what else I can eliminate or cut down on. My goal is to have my Emergency Nest Egg Fund in place in 6 months. I am determined to do it!"

Jay has saved all his receipts for one week and totaled all his receipts. He looks at his first set of receipts and realizes he has 5 days of lunches at $8 a lunch for five days and he's spent $40 on lunches this week. He says, "If I bring a bag lunch to work three days a week, I can save $24 to put in my "Tin Can" to start my $1000 Emergency Nest Egg Fund. In a month's time I will have saved $96." Jay then goes to his computer receipts and realizes he's spend $45 a week on his computer for his PayPal accounts, Groupon offers, credit cards, game accounts and his iTunes account. He says, "Do I really need these accounts, are they going to help me get my Emergency Nest Egg Fund up and running? These purchases are bleeding away my hard earned money. I'm going to close these accounts. That way I can put $180 a month into my "Tin Can" to save for my $1000 Emergency Nest Egg Fund. I will go through my receipts and look at what else I can eliminate or cut down on. My goal is to have my Emergency Nest Egg Fund in place in 6 months. I know I can do it!"

So, what are the three steps for you to save for your $1000 Emergency Nest Egg Fund just like Jay and Gabby?

Track your spending for one week. Keep all your receipts and expenses for the week, writing them down in a note book, and at the end of the week add them together to get your total expenses for the week. Include every purchase you make even small purchases for sodas, snacks, lunches, dinners, breakfasts, groceries, going to the movies, purchasing snacks, gas for your car, cigarettes, and any other items you purchased that week. Also list your weekly spending for pay pal accounts, group on offers, credit cards, game accounts and iTunes accounts on your computer.

2. Evaluate each of your receipts, just like Gabby and Jay did, and decide if it is a needed expense or not and start putting your saved money into your Emergency Nest Egg Fund "Piggy Bank or Tin Bank".

3) Look at your computer receipts like Jay did and decide if your weekly pay pal accounts, group on offers, credit cards, game accounts, and iTunes accounts on your computer can be eliminated or cut back. Jay turned off his pay pal account, his Groupon offers, his game accounts, his iTunes account and stopped spending his credit card money on things he didn't need. Jay said, "These purchases are bleeding away my hard earned money."

By following these three steps and being determined and disciplined to do it, you will be like Gabby and Jay, able to set up your $1000 Emergency Nest Egg Fund. You can also save on gas for your car each week by being aware of which gas station has a special day for saving 5cents for each gallon you purchase.In our City it's every Thursday. What day is it in your City or town? Every penny you save can go into your $1000 Emergency Nest Egg Fund. The sooner you start the sooner you will have your $1000 Emergency Nest Egg Fund in place.

Six Budget Items You Shouldn't Forget

When setting up a budget there are many items that you may leave out thinking they aren't important or you may simply forget about them until it's too late. Many times these items can bust your budget very quickly when the "unexpectedly" sneak up on you. When we first started, we found a few things we were lacking and worked to quickly fund them. These are six items we overlooked but you should consider and be sure to include.

    Allowances - This is extremely important in being happy while budgeting. Consider a small amount each week to cover lunches. Then you won't feel you need to justify to anyone spending from this account.

    Prescriptions - If you have prescriptions that you or your family need on a regular basis, don't forget to include these. Since prescriptions are typically given out in 30, 60 or 90 day fills, it is relatively easy to calculate how much cash to set aside for this expense.

    School Incidentals - This is a category that can be difficult to fund. This can be used for incidentals such as pictures, mid-year fees, uniforms, etc. 1). One big one that got us is we knew our kids were going to go into band when they got into the upper levels of grade school and could have saved for a band instrument over the summer. We didn't do that and it was difficult to make it work when the time came.

    Auto repairs - Having a fund that will pay for oil changes and other routine maintenance is something we set up right away. What we hadn't done right away was to start funding an account that would pay for either an insurance deductible in case of an accident or medium cost car repairs. These are repairs that are necessary but are hard to predict when they may occur. Things like breaks, water pumps, etc. Funding this account can be done gradually over time until you get to an amount you feel comfortable with.

    Family entertainment - This is a budget buster if you expect to just take $10 - $20 here and there from your household budget to rent movies, etc. Once we had this account established, we found we were better able to keep our household items budget in check.

    Gifts - The holidays are always stressful unless you have an account ready for this time of year. It can be used for birthdays as well. Having this budget item really makes the holidays enjoyable. Without it, you may end up in trouble and breaking out the credit cards again

How To Make A Budget In 3 Easy Steps

Planning a major event, vacation or making a major purchase takes a lot of planning. And so does creating a new product or service or starting a major project. And the first thing people do for each of these tasks is create a budget, right? So why is it that when it's time to start a business you don't create a budget??

Budgeting and accounting are necessary evils. No matter what - they have to be done. And no one wants to do it. People dread it as if it is the black plague. But you must perform these tasks regularly in order to manage you business finances.

So I am going to share with you three simple steps to create and maintain a budget. These steps can be done by anyone for any one of the major activities I mentioned above. And I am giving them to you because I don't want you to have ANY excuse as to why you didn't create a budget.

So here goes...

1. Determine your monthly income. Most business owners, well people in general, budget for expenses. No one ever thinks about the revenue. In order to have a complete budget you have to factor in the revenues and the expenses. Think about it - if you only budget for the expenses you are already at a loss. Never thought about it that way before have you? So figure out how much income you want to earn per month and then multiply it by twelve to determine the total for the year. I also suggest adding 5% - 10% cushion to cover unexpected expenses that may not be accounted for.

2. List ALL of your monthly expenses. There are so many costs built into a budget. And often times people budget for the big items but not the little incidentals. And it is those little items that can cause you to blow your budget. So don't forget about the little expenses, such as office supplies, internet fees, and even parking. List them ALL by month and then multiply those figures by twelve to determine your total spend for the year. Now if you notice that this fee is close to or higher than your revenues then you need to do one of two things:

a. Revisit step one and update your revenue or

b. Go through your expenses and make sure all of the costs are reasonable. You may need to push some items to succeeding years or find new vendors with lower costs..

3. Track it. Whether you maintain this budget within your accounting package or in an excel model, it doesn't matter just track it somewhere. Don't create a budget and then try to manage it in your head. It won't work. You can't remember it all. Input your actual figures monthly or weekly, depending on the project, and compare your actual figures against your budget. This will help you monitor your spending and better manage your cash flow. It's a simple process that can take as little as five minutes. This process will help you keep a handle on not just the items budgeted but also those incidental items that you didn't budget for. Again, these expenses are what can blow your entire plan and if you don't know they are there you can't take a recourse action.

Money Saving Tips in 2013

Make a shopping list

Food shopping forms a significant part of our monthly outgoings and the supermarket is where the bulk of the money is spent. Tesco takes £1 in every £8 spent by UK shoppers. But be warned, stores spend a small fortune studying ways of making us part with more of our money than we would otherwise intend to. Have you ever wondered why your favourite song is playing in the background as you navigate the aisles? Have you even noticed the background music? Possibly not, but you will have noticed at the checkout that the bill is often more than expected. To circumvent this, simply make a shopping list. Dig out the cookery books, plan a few meals and only buy what you need.

Shop online

The internet is gradually taking over. Online grocery shopping is getting better all the time and there are plenty of comparison websites to help find the best prices for bigger items. Give it a try, unless of course you like fighting your way through supermarket crowds.

Consider own-brand goods

You can buy a tin of Asda own-brand baked beans for 14p and a loaf bread at Asda, Tesco or Sainsbury's for 19p. Enough said.

Sell your clutter on eBay

Take this quick test: You're at home. Open a cupboard. Look inside. If it's full of clothes you haven't worn, or 'good ideas a the time' you haven't used, for, let's say, three years - you don't need them. So why not sell them to someone else who does? eBay, the online auction house, has opened individual sellers to a world of buyers. And you can flog anything for the cost of a small commission. Tip: you may want to buy a few items first to build up your rating as a respectable eBayer before you start selling.

Ask yourself: do I really need this?

Imagine the scenario. It's lunchtime and you've got an hour to kill. You find yourself in a department store and there's a sale on. You pick up a beautifully packaged selection of barbecue tools and associated garden paraphernalia. And it's half price. Now, stop! Ask yourself: Do I really need this? Exactly. Now, put it down and walk away.

Cancel your gym membership

Recent figures show that 77% of UK adults sign up for Gym memberships then fail to attend, with the average person wasting £303 per year totalling a massive £37 million waste by consumers on Gym memberships. If you are one of these statistics, cancel your membership immediately and look at alternative ways to improve your fitness, such as walking or cycling to work.

Do you need all those TV channels?

Britain is switching to digital-only television and time is running out for you to choose your new digital TV provider. The choice is already bewildering and with telephone-based services now being launched it's going to get more complicated. Packages range from full the monty, including every sports and movie channel costing around £50 a month, down to Freeview, which is free

Is It Costing You More To Go To Work?

No matter how long our work week is, we always look forward to pay-day. However, is it costing you more to go to work? Sound rather strange and it is ironic that we work to earn money but some have not really put pen to paper to see the exact revenue against our expenditures. Some say "A dollar in is better than a dollar out" and they will do anything to classify themselves as being employed. We will look at various factors to see if we are actually losing more than we are gaining.

Cost Of Child Care

Some people who have children employ, nannies, caregivers and babysitters and the cost of such services is strenuous to our pockets. Nevertheless, it is necessary, as we can't leave the kids by themselves. If we were working from home we would have saved the extra expense.

Eating Out

Some persons work long hours and they will have to either take a sandwich to work or eat out during work hours. This is also an additional cost borne on the pocket that might not be taken in consideration. If you were operating from home, maybe it would have been easier to eat leftovers or skip lunch until dinner time. Psychologically, most person might abstain from eating frequently when they are at home as opposed to being somewhere else. It is not safe to take cooked food in your bag the entire day unless you have a refrigerator at work to store the food. Some individuals do not have the privilege of storing meals and therefore have to purchase fresh food during breaks. Whichever way we choose to eat, it affects our budget.

Cost Of Transportation

This is expense is mandatory if you are not working from home. Some persons drive to work while others commute by train, ferry, taxi or bus. It would be wise to probably find employment in reasonable proximity to home to limit transportation cost.

Stress Factor

This is the most critical factor in determining whether it is worth working for your current employer. Some workers are victims of psychological and emotional abuse at the work-place. There is also physical pressure when some have to double-up due to frequent staff shortage. This becomes unbearable over long period of time when the boss is reluctant to fill the vacant post.

Consequently, employees spend hundreds of dollars on stress medication and hospitality bill as a result of work pressure. High blood pressure or hypertension is the order of the day.and one considers whether it is worthwhile staying home instead. Suppression from higher authorities can also add to your dilemma at work.

Cost Of Credit

If you are basically living from pay check to pay check, you might find yourself buying things on credit until pay-day. This incur charges if you don't pay off your balance before your next credit card bill cycle.

Think Smart

If you are paying out $100 and earning $60, then obviously you are living above your means. If you are living in deficit, you might want to find a job that pays over $100 or stay home and manage your own home business.This can be a tedious route as well but you are able to manage your kids and work at the same time. You could be saving hundreds of dollars per month by cutting significantly on:

    Cost of Child-Care
    Food
    Transportation and possibly stress

Finding a job that pays more is also another option to consider. but it would be remiss of me to over-look these factors:

    New Challenges to confront
    Working in unfavorable conditions just for the pay
    Lack of flexible or extra time for your family
    If you are a female and thinking of extending your family, you are not entitled to any maternity benefit until you are qualified

These might be few factors to be aware of before leaving your current employer. The bible says "By the sweat of our brows we shall eat bread" but some are actually eating water crackers while they work, because of limited resources. Work is honorable and good but if it is at a higher cost, you might want to weigh other options.

A Budget Item You Can Stick To

Budgets never deliver the results. Have you actually discovered your self, or anyone else saying that in the past?

I think that budgets unquestionably work. The main problem is that most people do not work at keeping with tips on budgeting. The principle of a budget is incredibly simple, and to claim that it does not work is simply ridiculous.

Budgeting and financial planning are the cornerstones of responsible money management. Not only that, but they are vital in developing a workable plan for the future, and can even reduce stress.

While many people shy away from the accountability and responsibility required to create and maintain an accurate budget, buckling down and building a budget can ultimately help reduce stress and worry, and lead to a more pleasant and fulfilling life.

It is normal to find ourselves asking, HOW TO START A BUDGET? Making a suitable budget and sticking to it will come naturally to you in no time. Also, it is not uncommon for many people to need assistance in planning for a budget. Many people who earn a good income often get complacent and neglect the importance of budgeting, but in my opinion, having more money makes it even more necessary to have a fixed plan on how best to spend and save it.

Financial problems are some of the most common causes for stress and frustration. If you have had problems with your finances, it is time to take action. You can begin the process of resolving your financial woes by beginning to make a budget. Many people don't use a budget but once you begin to use one, you'll have a much better idea of where your money is going.

It is important, no matter how much you make, to manage your finances wisely. An important tool in personal financial management is the budget. Although the concept can be intimidating, a budget is nothing more than a monetary breakdown of income vs. expenditures. There are many logical reasons for creating and following a budget, such as planning for unexpected expenses or the loss of a job, saving for your retirement or your children's education, and getting out of debt.

You say you know where your money goes and don't need it all written down to keep up with it? I issue you this challenge. Keep track of every cent you spend for one month and I do mean every cent. You will be shocked at what the itty-bitty expenses add up to.