|
|
Who's Laughing Now?Mar 14 '01 (Updated Mar 15 '01) Write an essay on this topic.
Popular Products in Building Supplies
The Bottom Line It takes planning ahead and commitment to the plan.
My friends used to laugh at me and my method of budgeting, but it worked. I had a collection of envelopes. Some of the envelopes were in my purse and came with me. Other envelopes stayed in a drawer at home. All the envelopes had either cash or index cards in them. The index cards had a specific number written on them that I could spend. Every two weeks when I got paid, I allocated my paycheck into these envelopes. In this way, I was able to budget as I went along. The in-purse envelopes included ones labeled as food, clothing, household, and gas. I carried these with me. I had money in them to spend as I needed while I was out. If I bought a pair of pantyhose, I paid from the clothing envelope. If I bought a pair of pears, I paid from the food envelope. At home was a drawer with names like rent, electric/gas, water/trash, phone, gifts, and insurance. Some of these bills were easy. My rent did not change from month to month. Others did vary, but by looking at the previous year's bills, I could estimate my current year's bills at other times of year. I always increased the amount I allocated for the previous year by a few dollars or a few percent on these sorts of bills. This gave me a bit more leeway. Often, I found I had something left over this way in certain categories. I should make a special note here that bills that came due at non-monthly intervals (like car insurance which I paid every 6 months), or items like gifts were budgeted on the same schedule as everything else. In this way, I didn't get hit with a big insurance bill all at once. I allocated as I went along. By putting aside $25/paycheck for gifts everytime, I had money for weddings and birthdays in their season. I rarely had to buy gifts in September or October. The money I put aside in those months, however, allowed me to have something to spend for the winter holidays. Since I was committed to this budget, I never overspent on gifts and never went into debt for them. Finally, there are three envelopes which had special meaning to me. They were my savings envelope, my charity envelope, and my whoopie envelope. Into my savings envelope went 10% of my paycheck. This was the first bill I paid. I used this money to buy into savings plans, to buy stocks I had researched and to otherwise make my money grow for me. When I quit working and went back to school, this money allowed me to go without taking out a student loan for over 2 years. Into my charity envelope went two kinds of money. One kind was money that was earmarked for my "pet" charities to which I made regular contributions. I had other money which I used for sponsoring people in walk-a-thons, buying Girl Scout cookies, or donating when requested by a good cause. The whoopie envelope was for money that came my way unexpectedly, or gifts. There are some basic rules to whoopie money, however. 1) There is no whoopie money if your bills aren't paid, and 2) If you don't spend whoopie money on whoopie, G-d won't give you more. The secret to budgeting is to plan ahead. By doing this, you will save yourself a lot of heartache and possible legal hassles. Finally, my best advice on money management is to read the book "The Richest Man In Babylon." I have given it for many years to friends who were graduating from college or getting married. No one who has ever followed its advice has failed to thank me. (And if you want more info on this book or just want to read another review by me, my review for it is at: http://www.epinions.com/book-review-5282-2F8F29FB-3A13CE36-prod3) And as long as I've included that shameless plug, I have one other review about selecting a tax preparer at: http://www.epinions.com/finc-review-4223-3CB9B35-3A24CB9A-prod1  |
| Read all comments (6)|Write your own comment |
|
Ads by Google
|
