L Bee Note: While I am working today enjoy this guest post from the folks over at Your Finances Simplified, another bang-on PF site. I’ve never used the envelope budgeting method (mostly because I was scared of running out!) but I appreciate the step-by-step how to below. Check it out!
Long before the iPhone, the Ipad and even before (gasp!) the Internet, our grandparents came up with some pretty powerful ways to set money aside. More and more people are starting to realize that their savings strategy just isn’t working. Worse still, some are just waking up to the fact that they might not even have a strategy at all.
Not So Ancient Wisdom
What is the ancient but effective savings strategy? Would you believe something as archaic as an envelope? That’s right, a real, hold it in your hand, paper envelope. Some modern financial pundits have uncovered this proven savings system and have renamed it as the “envelope savings system.” Most likely grandma didn’t use such a fancy sounding name, but it doesn’t matter what we call it, the system really does work.
How Does It Work?
The heart of this system involves putting cash into envelopes you label for specific bills. It is certainly true that using cash may sound quaint and more trouble than it’s worth. However, keep reading and you will soon understand the hidden power of this system. [Read more...]