There are many different ways to budget your money. For those who lack will power or often go over budget, methods like the envelope method work wonders. This method teaches budgeting by strictly cutting off your resources and allowing you a very small amount of money to work with each week. It sounds harsh, but by the end of just a few months you will be living like you were never on a budget and saving a lot of money at the same time!
How it works
The envelope method is simple. You are going to pay your bills like normal, but for things like groceries, entertainment, gifts and eating out, you are going to have a specific budget to follow. These are the areas that people often struggle in. So you need six envelopes. Figure out how much you want to spend weekly in each area. For my husband and I, we spend $60 on groceries, and $30 on entertainment weekly. For the month we have $60 dollars in the miscellaneous envelope, $50 dollars in the gift fund and $60 in the eating out fund. Every time I buy groceries I take out $60 dollars and just bring that to the grocery store. I can’t spend more because I can’t afford it, I don’t have any other money with me. When I get home I put the receipt in the envelope. This way I can see exactly how much I have spent and I can only spend a certain amount.
Why it works
It seems harsh, but the envelope works because it becomes a sort of competition with yourself. You will quickly find yourself trying to not spend all the money in the envelopes, and every bit that you save each month can go towards savings or paying off debt whichever. As your debt shrinks and your savings grows, you will be more and more motivated to save money