Cash Envelope System- The Benefits

I’ve written a post about the cash envelope system before, it explained how this system works. I’ve used this System for a while now, so I decided to make a post about the benefits of it.

I’ll leave the link of that post here, in case you’re interested.

1.Organisation 

In order to fill in the envelopes, I needed to get my budget right. So, I started to be more meticulous with it, and it made me a lot more organised with my finances.

2. Saved More Money

This was the only method that actually made me save a good chunk of money! For me, it’s the one that makes me be more accurate with my budget, and since I always pay things with cash, I started to realise the actual amount of money I was spending. It’s funny because when you pay things with your card, everything seems less expensive (at least for me haha). I was able to increase my percentage of savings due to this.

3. Under Budget

At the begging of the month, when I’d fill up the envelopes, I’d always hope to find some leftovers. So, I began to challenge myself to try to stay under budget. Obviously, I wasn’t able to achieve it every time, but whenever I did, I felt really accomplished.

Since I love this system, I decided to make downloadable envelopes that have the same theme as the Money Planner that I use.
There are different categories written on the envelopes, and the last envelope has no category in case you want to add a different one. The existing categories are Groceries, Rent, Household, Bills, Phone, Health, Clothing, Bank, Car, Personal, School, Kids, Pets, Travel, Savings, Restaurants, Entertainment, and Fun.
Every single envelope has a Budget Chart.

So, if you’re interested in them, I’ll leave the link here.

Envelopes

Thank you so much for reading it, and I’ll see you in my next post.

What you should do to stop being broke

This could happen to anyone. Sometimes, things don’t go according to what we previously planned, but it doesn’t mean everything is lost. You can take this as an opportunity to learn and grow new habits.

Here are 6 tips that will help you get out of your reality.

1.Write down all your expenses

Know exactly where you’re spending your money on. Write down every single item that you buy during the month.

2. Divide them

Divide all the items into two categories.

Wants: all the things you are perfectly fine living without.

Needs: all the things you can’t live without.

Also, make sure to figure out how much you spend on each category.

3. Cancel your subscriptions

Cancel all the unnecessary subscriptions, for example, your Netflix subscription or your gym membership. This step will make you have more money on the side.

4. Sell items you no longer need

This is a fast way of making some extra money. I have a post that goes a bit more in debt about this tip.

5 simple ways to make extra money”.

5. Downsize your lifestyle

Try to move to a smaller house so you can pay a lower rent or, move back to your parent’s. Be aware this is only a temporary situation, so don’t be afraid to live with them for a while.

If you’re paying a car debt, you could try to sell it, pay off your debt and get a cheaper one or, instead, you could use public transportation. Again, this is temporary.

6. Get new habits

Start cooking your own meals instead of going out to eat. Clothe shop only when necessary. Quit outside coffee and snacks, bring your own coffee and snacks with you. Make, the start of an emergency fund, a priority.

These are all the tips I have for you. I’d like to highlight the importance of an emergency fund. It’s definitely something, that in case of losing a job or any other unpredictable event, will help you get back on your feet.

Once you move forward from this moment and are finally back on you’re feet, make sure not to stop doing some of the steps on this post. Continue to stay on track of your expenses and don’t live above your means. For example, save money to buy a car instead of getting a loan. This will completely change your reality.

Thank you so much for reading it, I really hope this post helped you and, I’ll see you in my next.

Beginners Guide to the “50/30/20” System

There are several budgeting techniques and it makes the process of choosing which one works best for us a bit overwhelming. So, my goal is to explain the several existing methods, in order to make your decision slightly easier.

I also have a Beginners guide to the “cash envelope” system, if you want to learn a bit more about it.

The 50/30/20 categories

50%- corresponds to every need you have throughout the month. These needs might be rent/mortgage, utilities, groceries, car payments, etc.

30%- corresponds to your wants. For example clothes, memberships, subscriptions, dining out, etc.

20%- corresponds to your savings.

How to budget according to this system?

1.Figure out the exact amount you can work with

I always start with this step in all my budgeting posts but trust me, this is crucial in for you to succeed at it. You need to know the amount that is left after deducting your taxes, social security, etc.

2.Calculate the amount for each category 

Income (step1) * 0,5= Needs

Income (step1) * 0,3= Wants

Income (step1) * 0,2= Savings

These will be the exact amounts you’ll be able to spend on each category.

Tip: try to stay under budget in the needs and wants categories, that way, you will be able to add more to your savings. Enabling you to create future investments, savings account, an emergency fund or even pay off any debt quicker.

Feel free to adjust the percentages if you think that will benefit you. Overall, it’s a really good method to start a budgeting journey and increase your savings.

Thank you for reading it, and I’ll see you in my next post.

Beginners Guide to the “Cash Envelope” System

The “cash envelope” method is a great way to save money, to pay off debt and even to build your retirement account. It’s actually an easy way of achieving some of your goals, you get to save for that dream holiday, for the house of your dreams, for the huge wedding you’ve always dreamt of or even to plan the move for the country you’ve always wanted to live in.

So, here’s how this method works:

1.Figure out what you can work with.

Start with your tax and expenses free income. Know exactly the amount you’ll be able to take out of your bank to use it on the envelopes. Keep in mind, some things are paid with your debit card, just make sure to incorporate them on your budget.

If you need help making your budget, you can read this post that I wrote on How to budget your income.

2. The categories

This step may be different from mine. I’ll give a few examples with my categories, but you should adjust them to your life. Mine are: Groceries, needs, knowledge investment and fun money.

3. Choose the envelopes

Try to get envelopes with different colours, this will help you memorize which envelopes correspond to which categories and also because they’re cuter! I use paper envelopes but there are other envelope systems, for example, the Dave Ramsey’s.

4. Fill your envelopes

Now that you know your budget and you have the categories on your envelopes, you can start filling them with the specific amount that you designated for each.

Don’t forget to leave the money meant for the things you’ll pay with the debit card in the bank.

5. What’s next?

Well, now you go shopping and only spend what’s in the envelopes. Some people like to just have their envelops when they’re going shopping. To be quite honest, it’s something that bothers me, so when I go shopping I take the amount from the specific category and put it in my purse.

6. At the end of the month

Whatever is left on the envelopes and on my bank account that I didn’t use that month, I put it into savings. That was key to sky-rocket my savings account.

I really hope you try this method. Thank you for reading it. I will see you in my next post.

5 Simple ways to make extra money

Who wouldn’t want some extra dollars at the end of the month? In this post I’ll be sharing 5 simple ways to make money.

1.Sell your books

The books that you no longer read or have more than one copy (trust me, you’re not the only one!), you could sell them online or to those small second hand book fairs and make a few extra dollars.

2. Sell your clothes

I don’t know about you but I own a lot of clothes that I no longer use. They take up a lot of space in my closet. So, if you’re like me, selling them is the best option.

3. Sell old furniture

If you have old furniture that just taking up space and has no use, then this is a good option and you make money out of it! You can sell them to second-hand shops or to antique shops.

4. Create your own products

If you have any talent then you should take advantage of it and start creating your own products and sell them online. There are so many platforms where you can do it and you’ll be able to make really good money from it.

5. Become a Tutor

Regardless of where you are now professionally if you were good at any subject when you were in school, you should definitely give this one a try. You can even do it online!

I hope you found this useful! Thank you for reading it and I’ll see you in my next post.

5 things you should stop buying

We all are affected by consumerism, and everything is so reachable nowadays, that we often don’t realize how much money we are overspending on our day-to-day lives.

So, here’s a small list of tips you can incorporate in your routines, that will have a huge impact on your savings at the end of the month.

1.Stop buying coffee outside

You can make your own coffee and bring it with you instead. Those fancy coffee shops are usually extremely expensive, plus those drinks have too much sugar in it. Your health and your wallet will appreciate it.

2. Join your local library

If you’re as addicted to books as I am, you’ll find that at the end of the month you’re practically broke. To change this, I joined my local library. I pay a low monthly fee and I get to loan tons of books. You should definitely try it.

3. Get reusable water bottles

First, we all know that we need to drink a couple of liters of water per day. That equals 4 small plastic bottles. This isn’t just affecting the environment but is also making you overspend every day. If you get those reusable bottles, you’ll be saving both your money and the environment.

4. Quit or decrease dine outs

This is pretty self-explanatory. If you decrease going out for meals you’ll save more money, but obviously, don’t make this a strict rule, you can be flexible. The point is to save money but still enjoy life!  

5. Review your subscriptions

Go through your subscriptions and figure out what you actually consume. You should finish or adjust the ones that you are no longer using.

That is it, thank you for reading it. I’ll see you in my next post.

How to budget your income

1. Taxes, how much you’ll have to pay
In some countries taxes are deductible before you get your income and in others you’ll have to pay it yourself. How much you’ll pay will depend on your situation.

2. Make a list of your monthly obligations
Figure out how much you’ll spend on rent, bills, monthly subscriptions, etc.

3. Make a list of your monthly needs
Write down every single need that you have every month. For example: your hygiene items, household products, food, medicine you might need, etc.

4. Budget your income 
4.1 Start by subtracting your taxes and your monthly obligations to your income. Then split that amount by 2. One half will go to savings and the other will be the amount you’ll use for the month.

4.2 Now that you know exactly how much you can spend during the month, you can start budgeting. 15% of that amount will be your “fun money”. You get to use it for things that aren’t a necessity but will bring you happiness! For example, use it for going to the cinema, buy that makeup that you wanted, etc.
The rest, the remaining 85%, will cover the list you made prior: your necessities.
Tip: try to be under budget on the last segment, you’ll get to use the money for savings or for other fun moments.

Thank you for reading this and I’ll see you in my next post.