Envelope Used for Deposit of Valuables

1. Determine which parts of your budget will benefit from having their own designated cash reserve.

The envelope approach can be helpful for controlling out-of-control expenses. Don’t forget the basics like food, drink, fun, fuel, and garb. It’s up to you to select which parts of your budget should be assigned envelopes, but here are a handful that I find particularly useful:

·         Groceries
·         Gas
·         Makeup and hair care
·         Auto Repairs
·         Personal

2. Get a number for your budget.
Look into setting a monthly spending cap if you know you have a habit of going over budget on celebrations like baby showers, birthdays, and impulse buys. If you find that your grocery bills are eating into your budget, set a maximum amount that you are willing to spend and adhere to it. Ensure that you and your partner share a common understanding of the budget numbers. Also, if you’re going it alone, find someone to help keep you accountable to your financial plan. Someone that you know and trust and who shares your enthusiasm for the sound financial practices you’re adopting could serve this purpose.

3. prepare a cash envelope system for each budget category and fill them accordingly. To illustrate, imagine that you set aside $500 every month to spend on food. Make a habit of withdrawing $250 from your bank account each time you get paid at the beginning of the month, and store the money in an envelope until you need it. Scribble “Groceries” on that envelope. Repeat the same with your second paycheck, this time putting $250 away. You have $500 to spend on groceries this month. Bring along enough money to fulfill your grocery needs for the time you’ll be gone. If your total is more over $150 after using cash, you’ll need to remove certain items from your shopping cart. I understand your struggle. However, this is preferable than exceeding your grocery budget for the month and so causing you to go over your total monthly budget. If you don’t use up the entire amount of money in the grocery envelope, return any extra cash you receive to the cash envelope. That food envelope is used just for the purpose of purchasing food at the grocery store; no other expenses are allowed. If you forget to bring the envelope with you to the grocery store, you should turn around and go back home.

4. Spend only the amount of money that is in the corresponding cash envelope. When all of your cash is spent, that’s it; don’t forget that! If you need to get groceries but don’t have any cash, you can always rummage through the fridge for something to eat. Carry out the pantry test. Have a look in the cupboards to see if you can put up a meal without going out to buy any ingredients. This is a fantastic approach to finally taking control of your financial situation.