Envelop System, more money?

 

Envelope System = More Money?

One of the Key element before we start is to know , how much your spending per month? How much you have left at the end and if you have anything left of course. No big deal, we will have system in place to help you control your money every month. Even have a Debt Payoff System to help you have more in your pocket.

 

If you implement this strategy, you will make it alive at the end of the month trust me. Of course there is so many systems that we could put in place to have a better control of our finances but let’s start with this one.

 

The infamous Envelop System!

What is it? It’s a simple system that you could implement by dividing your differents bills that you have every month coming in that you need to pay. You should start with at least 12 Envelops… Remember the last time i spoke about :”How to know ,how much your spending per month is?”.If you don’t remember click here and after come back to this page to follow along…

When you receive your pay check or any kind of money hopefuly once a month or more ,you will divide your payment accordingly to the amount that you need to pay per month and take into consideration if your spouse will give you any money to help you pay some bills,mortgage or anything else. Let’s see what are the main common envelop that you need to have in place for this system to work.

 

Twelve Options.

Envelop #1 Mortgage/Appartment

Envelop#2 Taxes

Envelop#3 Grocery

Envelop#4 Car payment

Envelop#5 Insurance

Envelop#6 Electric bill

Envelop#7 Gas

Envelop#8 Repairs

Envelop#9 Internet+cable+phone

Envelop#10 Emergency Fund

Envelop#11 Vacations

Envelope #12 Misc

 

What After?

We do have twelve envelops to work with or i must say 12 categories to consider.

 

Envelop #1 Mortgage/Appartment

What we should consider when dealing with the mortgage or appartment payment is the frequency you will receive your weekly or monthly income and from there you adjust how much you putting toward your payment. It is a question of getting use to it but at the beginning it is a adjustment in our spending habit.

 

Envelop#2 Taxes

We should not neglect this one, we have the tendency to wait  at the last minute to pay this one. We should be ready in advance because this is a good amount to pay every year. You should have a saving option of about 4 time a year, this should give you enough time to save this particular amount and less stress when you do get this invoice in the mail.

 

Envelop#3 Grocery

This is a easy one but again we should be really careful. One of the best trick that i use, is to have my list ready prior for me to go to the grocery store and also not to go there on a empty stomach. If your hungry ,let’s say at breakfast time … You will buy whatever is in site and maybe not buy you came for so be aware:) Have a set amount every week and stick to it, look for specials, use coupons (electronic),card points. This should help.

 

Envelop#4 Car payment

This one is interesting, you have categorie 1 (if you lease your car) , categorie 2( if your purchasing the car) and categorie 3(if you own the car).

• 1-Leasing a car is so convenient, the payment most of the time is affortable,don’t have to worry much about repairs but the main thing is the money… You will keep spending month after month until there is no end. But if it’s good for you, go for it. Have your envelop close buy,so your ready for those payments.

 

• 2-Your buying your car for the next 60 months… This is a good option if it’s brand new, it is part of a strict budget and doesn’t cost more than 10% of your household income. If it’s more than that, you will have to cut somewhere else and maybe this is not the best scenario, try to put money aside every week for this.

 

• 3- You own the car but we have to deal with all the car repairs and unexpected issues… We just have to be ready and have a emergency fund just for the car so when something happen we are not going crazy.Trying to have a last minute credit could cost a lot more than we can afford.

 

Envelop#5 Insurance

This is a important one, we do have insurance for almost everything in our life and we should be really on point for this one. There is no,maybe or i will pay it next week! When the payment is due, it’s need to be ready or else,it will get cancel on the spot.Try to have a envelop for this one in priority because you want your car, house and of course your life and family to be protected.

 

Envelop#6 Electric bill

This one is simple,the amount that you will have to pay will vary from one season to the other. Prepare yourself in a way that you save the same amount summer like winter.When you have a increase in your consumption it will not affect your pockets much because you are ready for the fluctuation.

 

Envelop#7 Gas

It could gas for your car and it could be gas for the barbecue or even to eat your house. There is so many use for gas but one thing they have in common, it cost a lot to use and we do need it. It is not easy to have a budget for this one because the price will change all the time depending on the weather , travelling, consumption again and other factors out of our control. Just set a budget base on your past spending regarding the 3 general gas category (Car,house,misc).

 

Envelop#8 Repairs

We always have repairs to take care around the house, for the car and other miscellaneous articles. This is more in a general form of saving but again treat it with a grain of salt. Try to think ahead of time especially for cars repairs, before each season try to go for a checkup for your car. Saving in advance to have cash ready for each seasons is the best, prior to go see mr.Garage.

 

Envelop#9 Internet+cable+phone

There is so much to watch online,your favorite movie is on TV tonight and for the phone, we use most of the time our cellphone.Maybe try shopping for a better deal for your cable service to have a combination of TV+Internet, you should have a fair price and save at the same time. At this point, you will know how much you need to put aside each month for your cable.

 

Envelop#10 Emergency Fund

This is a must to have this envelop mark in red, we should have at least 1k save in this envelop or at the bank. If there is any bad circumstances arriving, you will not be in a bad situation. You could even ask your employer to save a portion of your salary to a emergency fund (investment account that you have access). There is other ways but this one is easy to achieve.

 

Envelop#11 Vacations

Fun time, have money ready for the vacations is not always a easy walk in the park. There is so much going on that we forget sometime to put money aside for the vacations. One way to do it , is to book in advance our vacations with a travel agency, booking a hotel, renting a location (beach house). At this point, you will give a deposit to lock your date and the next day you start working on saving the remaining amount to be paid, this is way better and more convenient.

 

Envelope #12 Misc

I love to call it the Fun envelop. In there you should have money to be spend that you don’t think about. You want a watch go for it, movies, new pair of shoes, the nice jacket at the store, restaurant with the family and so much more.The percentage you should put aside for the fun money should be 10%, you work so hard so you are allowed to have fun and enjoy yourself. Always take care of yourself and family and you will smile a lot more with this.

 

Control your Money.

You get the point, this is to help you have more control over your money! Peoples may thing this is stupid to do somehitng like but hey give it a try you will be surprise.If it easy to implement of course not because it will force you to change your habbit.

We are so use to have our money deposit in our bank account and after we just pay the bills,take some money when we need to and so on but we never take the time to count, follow or know on what do we spend our hard earned money on !

This is a new era that we live in and we have to adjust for the better,if you are in a difficult money situation stay tune for my next intervention,it should help you.

 

Stanley

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