I'm on a very strict budget at the moment, so I'm using the envelope method, but rather than having envelopes for different areas of payment, I literally have four envelopes, one for each week of the month and they contain the amount of money I'm allowed to spend that week. That covers everything after rent/bills and I can put more money in an envelope if I know there's a social event etc in that week. This means that whenever I spend I can see my money going down, and it completely cuts off online spending. It's not something i could do forever but for these few months where I need to be really strict it's the best way to keep me on track.
I always find that digital money feels like 'not-actually-money', it's so easy to pretend spending £20 on makeup isn't denting your budget when you don't see the hole it makes. Definitely recommend the paper method, there's nothing quite like realising you've spent half your weekly food budget on shit you didn't even want to get you to be more frugal!
I have the exact same experience. Digitally doesn't work for me but my 4 envelopes of the month are fantastic though i only keep food and entertainment money and I automate the bills. Whatever is left over from the week's envelope I save for the one week I might need to buy more food because i am hosting. I hope I never forget to do this. It works great.
I struggled with budgeting for a long time. Everyone talks only about tracking every dollar which i could never do. Until I watched this video and discovered the envelope method. It is perfect for me. I was struggling with lifestyle inflation before this but now I am back to living within my means and building that all important emergency fund. Thanks a lot
I have a irregular income. I TEP. Do it one pen and paper on a clip board in my kitchen. I pretty much live like I'm poor and save the rest. It works for me.
I love YNAB. I use that for TEP, envelope, and zero sum budgeting. We live on last month’s income and it helped me pay off about 45 thousand dollars in debt, $27000 in just one year.
I have recently graduated college with my bachelors in nursing and have secured a career as a trauma nurse; however, as I have been watching your videos about post-graduation life/money advice I feel a lot of it is centered around jobs where you are paid salary. In nursing, and in most of the medical field we do not make salary. So I would love for you guys to share some thoughts and advice you think would be beneficial for people in a similar career as me. Your videos have been so helpful for me to set myself up for success these past few years, keep it up!
Iyx I'm in Boston, but it's just as expensive here. I'd love to live on less of my income. I'm living comfortably but not saving anymore... Gotta break that spending habit 😩
I live in Chicago as a single mother making a little less. We started out in a studio when my son was little and I had to pay for child care. Once I no longer had that expense, We upgraded to a 1 bedroom. When apartment hunting, look for places that had all utilities included or at least heat/cooking gas. I cut the cord and stream tv. None of my apartments have had anything more than a basic kitchen - no dishwasher- no in unit laundry. Our studio had laundry in the building, but it was faster and a little cheaper to go to the laundromat. To help reign in spending, I looked at an item, and would think, "If I can't eat it, I don't need it." We did a lot of thrift store shopping(still do) and I keep on the look out for bogo deals for our shoes. I make a 2 week menu and grocery list that coincides with it and then I grocery shop at Aldi/Save a lot. I cook a lot and even learned how to bake bread well enough that we can now use it for sandwiches instead of door stops. I learned how to make soap and other toiletries, and household cleaners as well. I analyzed who my true self really is, I sold a lot of stuff I'd always wanted to use for hobbies, but never did, clothes, we never wore or he'd out grown. I dropped my car and solely use public transit. If you're patient, you can find an apartment, like I did, that I literally walked to everything I do or needed. 2 grocery stores, my son's elementary school, and the train are all 5 to 15 minute walks from our building. As I said, I am a single mother, I have one job, a slowly budding side hustle, and a now 13 y/o son. We live in the space that we need and can afford. In our first 4 years in Chicago, I paid off all of my student loans, have no credit card debt. In the next 4, I saved for vacations to take my son on. While taking care of my father when he was ill, I saw what retirement can be if your only financial plan is your social security. So, I have a 401K through work, and manage to save in a regular savings account. It can be done. Learning the difference between want and need was a huge factor for us as well as learning what kind of "stuff" has true value to make a home a home and what stuff doesn't.
I use the zero sum method in combination with tracking every penny. I like security, and the envelope system doesn't make sense to me (for example, one week of groceries costs more than the amount of cash I'm comfortable with carrying around) but I do (digitally) track every penny for the month in a document, and have a budget in checklist form in another document. That way I don't allocate a certain amount to say, medicine, when cost goes up unexpectedly and I need to pay for it.
Can you/TFD talk a little bit more about living on a variable income? My work is project based, and I have a hard time determining when to save/when not to save when months are slow. I'd love to hear your opinion, suggestions, tools etc. I'm an excel budgeter myself, so i'm always tracking my expenses, but saving and retirement alway seem to be on hold when I'm low on income for a period of time. And yes, i'm working on some side hustles :)
I funnel all of my payments to a single credit card with cashback, everything else is just there for credit history. When you check the credit statement every few days or so you start to notice how the outflow really start to add up. Envelop method is good too. My credit union offer this piechart that automatically cuts your expenditure into various categories. Tangerine , used to be called ING Direct. Outflow, inflow, FIFO. Budgeting is easy, the hard part is how to increase inflow cos there's a limit to how much outflow you can cut.
I used to do a kind of "envelope lite" system - I have 3 checking accounts that my paycheck was divided among; first a rent/bills account which had an extra $1,000 just in case; then a gas/groceries/medical expenses account; and all the remaining money went into a "fun" account. (plus a savings account with my emergency fund) I had a checkbook for the first account and debit cards for the other two. I liked the system a lot - I knew that if I had money building up in the fun account I could start planning a vacation, and I didn't feel at all guilty spending that money because I knew I could cover all of my living expenses without it.
Appreciate very much! Also, signed up for Skillshare, been wanting to but never seem to make the 1st 500 in time on other creators videos! Finally did!
I just started using ynab, it’s such a smart way to go. I’m still ironing out some kinks, but in the long run I hope we’ll be able to focus more toward saving up for a house and be more accountable with our eating out habits
I use the first method you mentioned. It works pretty well, but it’s kind of a catch-22 for my anxiety. I get so anxious that I feel the need to see where all my money goes. But checking it as frequently as I do is exhausting.
I'm sort of a TEP budgeter. I give myself £30 (~$42) a week which is purely for spending. No tracking whatsoever. My weekly food budget comes out of that and anything left over I can spend guilt free. Then everything else from my wage I track to the penny. Having some money I can spend guilt free without the need for tracking really helps keep me motivated to track everything else and save money.
I find the envelope system is a good option for jobs that see a heavier cash flow (like severs who see most, if not all, of their income come to them in cash) where it’s easy to spend on a bunch of little purchases and not realize you’ve just blown through what you needed for rent.
As someone who uses credit cards in order to get the rewards and pays them off every month, I found YNAB quite cumbersome. I even spoke with one of their experts about it, but got really lost when they explained how "easy" it was to use YNAB with the way I use credit cards. Idk I was probably doing something wrong, butttttt I'd rather have a budgeting program that is super simple to use.
Hi Erin! Thanks for sharing. Do you have any tips for those of us looking to purchase our first home? I’ve been living with my parents for a while to save and make more money in order to afford my own spot. I love them dearly-and appreciate them allowing me to stay with them rent-free - however, they’re driving me nuts and so it’s time I leave the nest. I don’t know what I’m doing nor do I have any idea where to start, which makes me quite anxious. Any tips, links, books, etc. you could provide would be appreciated. 😊😊
Hi Marsalla, I highly recommend seeing if there are first time home buyer classes available to take where you live! I live in Colorado and these classes are free to take (and are a requirement if you are wanting to utilize the first time home buyer's program here) and are incredibly informative! The organization I took the class through also offers free counseling for first time home buyers. I would also recommend a couple other resources: 100 Questions Every First-Time Home Buyer Should Ask by Ilyce R. Glink; NerdWallet has a good article titled 25 Tips for First Time Home Buyers; and lastly, I'm going to reiterate this, research first time home buyer programs in your area! Even if classes aren't available, there are likely to be webpages that outline any programs and will possibly also have articles that discuss home buying tips that are specific to your area! Hope this helps!
When my Mom was managing my money with envelopes there were times I'd say I'd really like a ..... She'd say no problem we'll start an envelope for it. When paychecks were bigger or I just paid something off she'd stuff a $20 or even a $5 in the envelope. Quickly I had all or most the money for the thing I wanted. If I found a Great deal on something and must act now...it was up to me to pull money from other envelopes that had been growing for other things...Say shoes I'd been saving for but now this thing whatever it was totally trumped these shoes that held little importance and suddenly I had all the money and unfortunately would have to start over for the shoes. Envelopes like Christmas or Personal Property Tax etc. were never used for any reason. She juggled those envelopes with such quiet stealth that I paid my truck off 5 months early.... We all know that eventually we are going to need new tires...so unbeknownst me she'd have $50 extra that needed a good envelope home...hmmm winter will be here soon and I'm going to need good tires....there's where she'd slip it. Then come winter I'd have 90% of the money ready for really great tires verses panicking and scraping together from other luxury envelopes enough to buy some used retreads! This system worked so well that not only could I afford great tires but could easily afford a good warranty and she'd send me off with the money for oil change and great quality wipers from my Car Maint envelopes. All growing from little $5.00 here and $10 there. ZERO PANIC! Never had to begrudgingly touch my wallet cash or my rainy day savings...because there was envelope for just that need!
If you use the envelope method, what do you do if one of your categories has has extra cash at the end of the month? Should it automatically go into savings or can you create another category, such as emergency funds? I'm curious as to your recommendations. Thanks :)
Hi Pina, my opinion is if you don't already have an emergency fund equaling 3-6 months of expenses, then you should dedicate your extra cash towards that! After funding your emergency fund, I would put the cash towards retirement (if you're not doing so already) and then from there I would put the money towards savings! Hope this helps!
When my Mom was managing my money with envelopes there were times I'd say I'd really like a ..... She'd say no problem we'll start an envelope for it. When paychecks were bigger or I just paid something off she'd stuff a $20 or even a $5 in the envelope. Quickly I had all or most the money for the thing I wanted. If I found a Great deal on something and must act now...it was up to me to pull money from other envelopes that had been growing for other things...Say shoes I'd been saving for but now this thing whatever it was totally trumped these shoes that held little importance and suddenly I had all the money and unfortunately would have to start over for the shoes. Envelopes like Christmas or Personal Property Tax etc. were never used for any reason. She juggled those envelopes with such quiet stealth that I paid my truck off 5 months early.... We all know that eventually we are going to need new tires...so unbeknownst me she'd have $50 extra that needed a good envelope home...hmmm winter will be here soon and I'm going to need good tires....there's where she'd slip it. Then come winter I'd have 90% of the money ready for really great tires verses panicking and scraping together from other luxury envelopes enough to buy some used retreads! This system worked so well that not only could I afford great tires but could easily afford a good warranty and she'd send me off with the money for oil change and great quality wipers from my Car Maint envelopes. All growing from little $5.00 here and $10 there. ZERO PANIC! Never had to begrudgingly touch my wallet cash or my rainy day savings...because there was envelope for just that need!
Do you have any advice on how to help friends who do not invest/think about retirement? We are all in our mid twenties, have savings but I know they do not invest, how should I bring up the topic? What are the best ways to help educate them about retirement/investing? Thanks, great videos as always, and keep it up!
You might start by asking them if they have a company 401k match and show them they are passing up on free money by not investing in it. And then show them how critical it is that they start saving now with compound interest charts like these: www.businessinsider.com/amazing-power-of-compound-interest-2014-7
Hi Courtney, I agree with barretjd, that exact article was what helped me become incredibly motivated to start dedicating money towards retirement when I was younger! (I still have that article bookmarked to this day) I also highly recommend just talking with them about what you do for investing and planning towards retirement. I don't know how many of my friends who have started putting at least a little money away after I talked their ear off (with an incredible amount of excitement) about planning towards the future and my goal to retire at 45. I've introduced many of my friends to the podcast Radical Personal Finance (if you haven't heard it before, I highly recommend checking it out.) and even though many of them don't listen to it as much as I do, I know that I'm at least planting a seed. You can also recommend books like Millionaire Next Door, Your Money or Your Life, and even The Tipping Point by Malcolm Gladwell. Hope this helps!
For the envelope method, is it realistic to buy everything with cash in America, especially at universities? At my campus in the Netherlands, you can only pay by debit card.. I will be studying in America in the fall so I'm wondering if it will be different
By tracking every penny, I set up an accurate budget each month with categories with limits. By doing this, I've cut my spending in half and I have a better idea of what I can afford.
I'd tell my Mom that a friend is getting married in 6 months. she'd ask how much I want to give to them I'd say a 100, and Oh I'm a groomsmen and have to buy him a gift and pay for my tux...and Oh the bride is having her bachelorette party (I'm gay so it's required I go) so I'll need money for that and her gift. Come time for the wedding I'd say okay Mom how much we got in the envelope and she'd say Uhhhh I've had $400 in the envelope for a couple months but if you need more there's 100 in another envelope that we could use! WOW! For the 1st time in my life I had more than enough and could give a crisp $100 Bill instead of a lousy last minute $25 from my weekly money. Just by stashing little. I may have to delay some other luxury or two....but to have that $400 just ready for the wedding - THAT IS FREEDOM AND PRECIOUS PEACE OF MIND AND LUXURY....ALL IN 1 LITTLE ENVELOPE!
Yeah, that too - who spends 8$ on Coffee every fricking day :D? I mean, no shaming, everyone has their thing - it's embarassing how much I've spend on fines on stupid stuff like libary cards...
Pauline Ahhh as I read this thread I was thinking about my library fines. It's so embarrassing honestly. Just as embarrassing as unintentionally spending hundreds on bottled water
#FinNexus FNX bought during the token sale will be convertible to our second token model at same price of 0.1$ irrespective of the current market price
Oh man, zero sum budget is what I need. My company switched payroll from 1st/15th of every month, to every other week. I had all auto payments set on fixed days and the switch really messed me up.
Looking to get your financial life in order? Check out this 3-Minute Guide: ua-cam.com/video/HzuU259Y1qA/v-deo.html.
I'm on a very strict budget at the moment, so I'm using the envelope method, but rather than having envelopes for different areas of payment, I literally have four envelopes, one for each week of the month and they contain the amount of money I'm allowed to spend that week. That covers everything after rent/bills and I can put more money in an envelope if I know there's a social event etc in that week. This means that whenever I spend I can see my money going down, and it completely cuts off online spending. It's not something i could do forever but for these few months where I need to be really strict it's the best way to keep me on track.
I S A B E L L E F L Y N N I need to get back to doing this. Doing it digitally isn't working at all...
I always find that digital money feels like 'not-actually-money', it's so easy to pretend spending £20 on makeup isn't denting your budget when you don't see the hole it makes. Definitely recommend the paper method, there's nothing quite like realising you've spent half your weekly food budget on shit you didn't even want to get you to be more frugal!
I have the exact same experience. Digitally doesn't work for me but my 4 envelopes of the month are fantastic though i only keep food and entertainment money and I automate the bills. Whatever is left over from the week's envelope I save for the one week I might need to buy more food because i am hosting. I hope I never forget to do this. It works great.
I struggled with budgeting for a long time. Everyone talks only about tracking every dollar which i could never do. Until I watched this video and discovered the envelope method. It is perfect for me. I was struggling with lifestyle inflation before this but now I am back to living within my means and building that all important emergency fund. Thanks a lot
I have a irregular income. I TEP. Do it one pen and paper on a clip board in my kitchen. I pretty much live like I'm poor and save the rest. It works for me.
I love YNAB. I use that for TEP, envelope, and zero sum budgeting. We live on last month’s income and it helped me pay off about 45 thousand dollars in debt, $27000 in just one year.
I have recently graduated college with my bachelors in nursing and have secured a career as a trauma nurse; however, as I have been watching your videos about post-graduation life/money advice I feel a lot of it is centered around jobs where you are paid salary. In nursing, and in most of the medical field we do not make salary. So I would love for you guys to share some thoughts and advice you think would be beneficial for people in a similar career as me. Your videos have been so helpful for me to set myself up for success these past few years, keep it up!
Ma'am! Did you just say you lived in NY ON $23K??? Can we get a video on how you made that work?
knittingarch Please!!!! We need this!!!
Iyx I'm in Boston, but it's just as expensive here. I'd love to live on less of my income. I'm living comfortably but not saving anymore... Gotta break that spending habit 😩
I live in Chicago as a single mother making a little less. We started out in a studio when my son was little and I had to pay for child care. Once I no longer had that expense, We upgraded to a 1 bedroom. When apartment hunting, look for places that had all utilities included or at least heat/cooking gas. I cut the cord and stream tv. None of my apartments have had anything more than a basic kitchen - no dishwasher- no in unit laundry. Our studio had laundry in the building, but it was faster and a little cheaper to go to the laundromat. To help reign in spending, I looked at an item, and would think, "If I can't eat it, I don't need it." We did a lot of thrift store shopping(still do) and I keep on the look out for bogo deals for our shoes. I make a 2 week menu and grocery list that coincides with it and then I grocery shop at Aldi/Save a lot. I cook a lot and even learned how to bake bread well enough that we can now use it for sandwiches instead of door stops. I learned how to make soap and other toiletries, and household cleaners as well. I analyzed who my true self really is, I sold a lot of stuff I'd always wanted to use for hobbies, but never did, clothes, we never wore or he'd out grown. I dropped my car and solely use public transit. If you're patient, you can find an apartment, like I did, that I literally walked to everything I do or needed. 2 grocery stores, my son's elementary school, and the train are all 5 to 15 minute walks from our building. As I said, I am a single mother, I have one job, a slowly budding side hustle, and a now 13 y/o son. We live in the space that we need and can afford. In our first 4 years in Chicago, I paid off all of my student loans, have no credit card debt. In the next 4, I saved for vacations to take my son on. While taking care of my father when he was ill, I saw what retirement can be if your only financial plan is your social security. So, I have a 401K through work, and manage to save in a regular savings account. It can be done. Learning the difference between want and need was a huge factor for us as well as learning what kind of "stuff" has true value to make a home a home and what stuff doesn't.
It has to be with 3-4 roommates.
+Chell Prince I've got so much respect for you right now, I cannot put it into words!
I use the zero sum method in combination with tracking every penny. I like security, and the envelope system doesn't make sense to me (for example, one week of groceries costs more than the amount of cash I'm comfortable with carrying around) but I do (digitally) track every penny for the month in a document, and have a budget in checklist form in another document. That way I don't allocate a certain amount to say, medicine, when cost goes up unexpectedly and I need to pay for it.
Can you/TFD talk a little bit more about living on a variable income? My work is project based, and I have a hard time determining when to save/when not to save when months are slow. I'd love to hear your opinion, suggestions, tools etc. I'm an excel budgeter myself, so i'm always tracking my expenses, but saving and retirement alway seem to be on hold when I'm low on income for a period of time. And yes, i'm working on some side hustles :)
I love that you mention YNAB! I love their system and they don’t get enough buzz
I funnel all of my payments to a single credit card with cashback, everything else is just there for credit history. When you check the credit statement every few days or so you start to notice how the outflow really start to add up.
Envelop method is good too. My credit union offer this piechart that automatically cuts your expenditure into various categories. Tangerine , used to be called ING Direct. Outflow, inflow, FIFO.
Budgeting is easy, the hard part is how to increase inflow cos there's a limit to how much outflow you can cut.
Brian LO My bank(RBC) does this as well. It's handy but sometimes it mislabels my expenses :/
I used to do a kind of "envelope lite" system - I have 3 checking accounts that my paycheck was divided among; first a rent/bills account which had an extra $1,000 just in case; then a gas/groceries/medical expenses account; and all the remaining money went into a "fun" account. (plus a savings account with my emergency fund) I had a checkbook for the first account and debit cards for the other two. I liked the system a lot - I knew that if I had money building up in the fun account I could start planning a vacation, and I didn't feel at all guilty spending that money because I knew I could cover all of my living expenses without it.
I have been using YNAB for about a year now and I really enjoy using it and find it actually useful.
Appreciate very much! Also, signed up for Skillshare, been wanting to but never seem to make the 1st 500 in time on other creators videos! Finally did!
Glad you were able to take advantage of the offer, enjoy the classes!
- Annie
I just started using ynab, it’s such a smart way to go. I’m still ironing out some kinks, but in the long run I hope we’ll be able to focus more toward saving up for a house and be more accountable with our eating out habits
I use the first method you mentioned. It works pretty well, but it’s kind of a catch-22 for my anxiety. I get so anxious that I feel the need to see where all my money goes. But checking it as frequently as I do is exhausting.
I'm sort of a TEP budgeter. I give myself £30 (~$42) a week which is purely for spending. No tracking whatsoever. My weekly food budget comes out of that and anything left over I can spend guilt free. Then everything else from my wage I track to the penny. Having some money I can spend guilt free without the need for tracking really helps keep me motivated to track everything else and save money.
I budget in paper and envelope cash only for food budget and track other things with mobile app.
Digit rounds up your money to save you cash. It's a pretty cool way of putting money away without really noticing. Great for those who forget to save.
digit.co/r/WJ6BQSqvHQ?ai
I love these, and really love that Erin has decided to join in on this channel.
Wow, I have been using combination of all thrre methods🤷🏽♀️
This is very practical and helpful. I would love to see more videos like this. Perhaps, something like ways to save more for retirement?
I find the envelope system is a good option for jobs that see a heavier cash flow (like severs who see most, if not all, of their income come to them in cash) where it’s easy to spend on a bunch of little purchases and not realize you’ve just blown through what you needed for rent.
I love the envelope system. It works wonderful.
This is really helpful. Might try the track every penny method because don't really think when I spend.
As someone who uses credit cards in order to get the rewards and pays them off every month, I found YNAB quite cumbersome. I even spoke with one of their experts about it, but got really lost when they explained how "easy" it was to use YNAB with the way I use credit cards. Idk I was probably doing something wrong, butttttt I'd rather have a budgeting program that is super simple to use.
I actually use the penny tracking method, and it's quite intresting to see where your money is going! To me it works quite well.
Hi Erin! Thanks for sharing. Do you have any tips for those of us looking to purchase our first home? I’ve been living with my parents for a while to save and make more money in order to afford my own spot. I love them dearly-and appreciate them allowing me to stay with them rent-free - however, they’re driving me nuts and so it’s time I leave the nest. I don’t know what I’m doing nor do I have any idea where to start, which makes me quite anxious. Any tips, links, books, etc. you could provide would be appreciated. 😊😊
Hi Marsalla, I highly recommend seeing if there are first time home buyer classes available to take where you live! I live in Colorado and these classes are free to take (and are a requirement if you are wanting to utilize the first time home buyer's program here) and are incredibly informative! The organization I took the class through also offers free counseling for first time home buyers.
I would also recommend a couple other resources: 100 Questions Every First-Time Home Buyer Should Ask by Ilyce R. Glink; NerdWallet has a good article titled 25 Tips for First Time Home Buyers; and lastly, I'm going to reiterate this, research first time home buyer programs in your area! Even if classes aren't available, there are likely to be webpages that outline any programs and will possibly also have articles that discuss home buying tips that are specific to your area! Hope this helps!
I think all three fit my personality!!!!
LOVE this. The article on the site that was about the different financial personality types was very cool, I'm pretty sure I pinned it to Pinterest.
I'm the TEP, lol
I have 2 credit cards, 2 bank accounts and no debt. I only spend 1/3 of my salary and putting some into investment.
JӦYの貓
Amazing.
If you just use a third why not have just one acount and a debit card Only?:)
one account is for investment.
And you live where
I use the minimalist method.
I don’t get how anyone pays rent and utilities with the cash from the envelope system? Good system but that just seems like a hole to me
must have missed the part where she says theres a digital version
fillibustercat totally! I do envelopes for treat money and groceries 😊😊
Why can't you pay those on cash? your rent and utilities? I do it.
in my country everything goes digitally, if I would try to pay in cash I'll have a visit of the police within a hour. XD
Money orders. Some people don't have bank accounts if their credit is too bad.
When my Mom was managing my money with envelopes there were times I'd say I'd really like a ..... She'd say no problem we'll start an envelope for it. When paychecks were bigger or I just paid something off she'd stuff a $20 or even a $5 in the envelope. Quickly I had all or most the money for the thing I wanted. If I found a Great deal on something and must act now...it was up to me to pull money from other envelopes that had been growing for other things...Say shoes I'd been saving for but now this thing whatever it was totally trumped these shoes that held little importance and suddenly I had all the money and unfortunately would have to start over for the shoes. Envelopes like Christmas or Personal Property Tax etc. were never used for any reason. She juggled those envelopes with such quiet stealth that I paid my truck off 5 months early.... We all know that eventually we are going to need new tires...so unbeknownst me she'd have $50 extra that needed a good envelope home...hmmm winter will be here soon and I'm going to need good tires....there's where she'd slip it. Then come winter I'd have 90% of the money ready for really great tires verses panicking and scraping together from other luxury envelopes enough to buy some used retreads! This system worked so well that not only could I afford great tires but could easily afford a good warranty and she'd send me off with the money for oil change and great quality wipers from my Car Maint envelopes. All growing from little $5.00 here and $10 there. ZERO PANIC! Never had to begrudgingly touch my wallet cash or my rainy day savings...because there was envelope for just that need!
The envelope system works well for me.
If you use the envelope method, what do you do if one of your categories has has extra cash at the end of the month? Should it automatically go into savings or can you create another category, such as emergency funds? I'm curious as to your recommendations. Thanks :)
Hi Pina, my opinion is if you don't already have an emergency fund equaling 3-6 months of expenses, then you should dedicate your extra cash towards that! After funding your emergency fund, I would put the cash towards retirement (if you're not doing so already) and then from there I would put the money towards savings! Hope this helps!
When my Mom was managing my money with envelopes there were times I'd say I'd really like a ..... She'd say no problem we'll start an envelope for it. When paychecks were bigger or I just paid something off she'd stuff a $20 or even a $5 in the envelope. Quickly I had all or most the money for the thing I wanted. If I found a Great deal on something and must act now...it was up to me to pull money from other envelopes that had been growing for other things...Say shoes I'd been saving for but now this thing whatever it was totally trumped these shoes that held little importance and suddenly I had all the money and unfortunately would have to start over for the shoes. Envelopes like Christmas or Personal Property Tax etc. were never used for any reason. She juggled those envelopes with such quiet stealth that I paid my truck off 5 months early.... We all know that eventually we are going to need new tires...so unbeknownst me she'd have $50 extra that needed a good envelope home...hmmm winter will be here soon and I'm going to need good tires....there's where she'd slip it. Then come winter I'd have 90% of the money ready for really great tires verses panicking and scraping together from other luxury envelopes enough to buy some used retreads! This system worked so well that not only could I afford great tires but could easily afford a good warranty and she'd send me off with the money for oil change and great quality wipers from my Car Maint envelopes. All growing from little $5.00 here and $10 there. ZERO PANIC! Never had to begrudgingly touch my wallet cash or my rainy day savings...because there was envelope for just that need!
Do you have any advice on how to help friends who do not invest/think about retirement? We are all in our mid twenties, have savings but I know they do not invest, how should I bring up the topic? What are the best ways to help educate them about retirement/investing? Thanks, great videos as always, and keep it up!
You might start by asking them if they have a company 401k match and show them they are passing up on free money by not investing in it. And then show them how critical it is that they start saving now with compound interest charts like these: www.businessinsider.com/amazing-power-of-compound-interest-2014-7
Thanks!
Hi Courtney, I agree with barretjd, that exact article was what helped me become incredibly motivated to start dedicating money towards retirement when I was younger! (I still have that article bookmarked to this day)
I also highly recommend just talking with them about what you do for investing and planning towards retirement. I don't know how many of my friends who have started putting at least a little money away after I talked their ear off (with an incredible amount of excitement) about planning towards the future and my goal to retire at 45. I've introduced many of my friends to the podcast Radical Personal Finance (if you haven't heard it before, I highly recommend checking it out.) and even though many of them don't listen to it as much as I do, I know that I'm at least planting a seed. You can also recommend books like Millionaire Next Door, Your Money or Your Life, and even The Tipping Point by Malcolm Gladwell. Hope this helps!
Success! I helped my friend open an IRA, thanks for all the advice!
Can't spend money if you don't have money.
can you tho? more often than people 'borrow' money. that's spending money you don't have.
Cept for credit cards
This video is on point!
For the envelope method, is it realistic to buy everything with cash in America, especially at universities? At my campus in the Netherlands, you can only pay by debit card.. I will be studying in America in the fall so I'm wondering if it will be different
a digital envelope system works perfect for me.
By tracking every penny, I set up an accurate budget each month with categories with limits. By doing this, I've cut my spending in half and I have a better idea of what I can afford.
i track my expenses with the notes app on my phone
I've been able to save $1000+ using YNAB and barefoot investor budgeting styles since the start of January and I'm only on disability
👌
I'd tell my Mom that a friend is getting married in 6 months. she'd ask how much I want to give to them I'd say a 100, and Oh I'm a groomsmen and have to buy him a gift and pay for my tux...and Oh the bride is having her bachelorette party (I'm gay so it's required I go) so I'll need money for that and her gift. Come time for the wedding I'd say okay Mom how much we got in the envelope and she'd say Uhhhh I've had $400 in the envelope for a couple months but if you need more there's 100 in another envelope that we could use! WOW! For the 1st time in my life I had more than enough and could give a crisp $100 Bill instead of a lousy last minute $25 from my weekly money. Just by stashing little. I may have to delay some other luxury or two....but to have that $400 just ready for the wedding - THAT IS FREEDOM AND PRECIOUS PEACE OF MIND AND LUXURY....ALL IN 1 LITTLE ENVELOPE!
🙏🏾😊
I track my expenses with my bank’s app, GRIP (ABN AMRO)
Ok
4:50
I really like your show, but sometimes these stories are just so bizarre, like who spends three dollars on water :D?
The same people who spend $16 on an acai bowl haha! Spending comes in all shapes and sizes x).
As opposed to sending $8 on coffee...it happens. *shrug*
Yeah, that too - who spends 8$ on Coffee every fricking day :D? I mean, no shaming, everyone has their thing - it's embarassing how much I've spend on fines on stupid stuff like libary cards...
Pauline Ahhh as I read this thread I was thinking about my library fines. It's so embarrassing honestly. Just as embarrassing as unintentionally spending hundreds on bottled water
#FinNexus FNX bought during the token sale will be convertible to our second token model at same price of 0.1$ irrespective of the current market price
Oh man, zero sum budget is what I need. My company switched payroll from 1st/15th of every month, to every other week. I had all auto payments set on fixed days and the switch really messed me up.
Got a thumbs-up for starting the conversation, but there are a ton more than 3 budgeting styles, much less financial personality types.
lord of the rings (budget) ref lol
I'd rather make enough so I don't need to budget.
Don Wald does it work for you? And how?
I doesn't matter how much you make, you always need a budget... That's how Hollywood stars with millions of dollars go bankrupt
Shradz Pathare I don't know, my card balance always comes out the same every month. Maybe I'm boring.
Estefany Cáceres Or you can live below your means then it's never a problem.
Im SO NOT interested i her. Get in your own f videos!!!!