Archive for frugal living
4 basic steps to start a budget
Posted by: | CommentsAre you one of the many people trying to develop a budget that works. Especially with kids, having a budget is hard work.
Here are the 4 basic steps to start a budget
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The first thing you want to do is keep track of where all your money is going. You would want to save your receipts. You would want to separate in house, food, eating out, miscellaneous, cigarettes (if you smoke), clothes, kids, electric, and so fourth
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Then you would want to cut back on the items that you do not need, which is also known as the the latte factor ( For more info see What is Latte factor). What you definitely do not need is cigarettes for example.
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Stick to it: if it is not in the budget, then do not get it. Make sure you plan ahead. If you want to take a vacation plan for that in each paycheck
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Use the envelope system instead of using your debit or credit card. What you do is mark the envelopes as rent, groceries, eat out, clothes, etc, then you put a portion of each paycheck into the envelope. Make sure you use cash in the envelope, and make sure nobody can find it, or it is not in plain sight.
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What is the envelope system
Posted by: | CommentsThe envelope system is a great way to help make budgeting easier. You would want to start listing all your expenses that spend each month. Then you make categories such as food, auto, rent, clothes, etc.
Then each paycheck you would want to deposit a certain amount of money into each envelope. You would want to split the amount you put in, buy the number of times you are paid each month.
For example, you are paid twice a month and rent is 1000 dollars a month. So you would want to put 500 dollars each paycheck and put it in the envelope.
Important points
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do not leave your envelopes laying around where anybody can find them, make sure you hide them where you and your trusted spouse can find it. You do not want your kids or anybody else that comes to your house to find it.
- With rent and major expense it is a different story about putting into an envelope, obviously you do not want somebody to steal it or gets misplace and for two you can be earning interest on your account. What I do is have a separate bank account that gets direct deposited into my account. In fact I have 3 bank accounts because I do not trust myself) , one for rent, one for spending money, and the other for emergency money.
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