Wednesday, January 23, 2013

Use The Envelope System To Easily Track Your Personal Expenses



Most people find budgeting to be a fearful, worrisome exercise. There are simply too many things you need and too little cash. Here’s a simple method that will teach you to keep track of your expenses by focusing only on your regular, recurring expenses by setting money aside in envelopes.
Let’s say you set aside four amounts in your budget each payday —
  • one for filling up petrol,
  • one for groceries,
  • one for kids school fees & expenses
  • one for weekends, entertainment and eating out

Withdraw those amounts on payday, and put them in three separate envelopes. That way, you can easily track how much you have left for each of these expenses, and when you run out of money, you know it immediately.
You don’t overspend in these categories. If you regularly run out too fast though, you may need to rethink your budget.
Bonus: You can now easily decide on your long term savings plan with whatever you’re left with.
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