The ABCs of Saving Money will appear occasionally throughout 2010.
The Envelope System is one of those things that is often (always?) mentioned when you first start talking about trying to save money. I’m not a big fan of it, but others swear it works. By budgeting each paycheck, and separating the different categories of the budget into cold, hard cash that you then tuck into the appropriate envelope, proponents of cash swear that the system helps them live on a budget.
There are lots of ways to adapt the envelope system to meet your needs. Some people use cash for everything except for the big bills, like rent or mortgages, for which paying cash would be too much of a hassle. Others use envelopes for a limited range of budget categories- choosing only to pay for their groceries, for example, in cash. My mother puts every $5 bill she comes across in envelopes that she uses to save for different goals- a new computer, paying the cleaning lacy and so on.
I don’t like using cash because I find that I spend much more when I have cash in my wallet then if I limited myself to paying just by direct debit card.
The Elephant in the Room
The elephant in the room is that thing that no one wants to talk about…debt, or credit cards, or how much you earn or you paid for something. Money is a touchy subject, one that few people feel comfortable talking about openly- unless it’s to brag. Remember however, that appearances aren’t always what they seem. People may be bragging about their latest vacation or about the great deal they just scored but without talking about what’s underneath: a less than stellar retirement fund, or credit card debt. I read a great quote the other day, that went something like this:
Beware of trying to keep up with the Joneses- they just might be trying to keep up with you.
If it comes too easily, if it seems to good to be true- then it probably is. I think that the only way ‘easy money’ really is easy money, is when it comes from doing something you love. Otherwise, those get rich quick schemes, the instant internet fortune that comes with blogging- well, it’s probably not going to happen!
Eating in or out (or In ‘n Out)
I’m a big fan of eating out. I like trying new food, I enjoy the experience of eating at a nice restaurant or the burger joint down the street and I’m also lazy. Cooking every night can be a lot of work! But there are ways to make eating out more frugal: eating out for lunch, instead of dinner, going out by yourself (I sometimes squelch the eating out craving by having a lunch out with colleagues), making sure that you use coupons if possible, only ordering the main dish (if you’re ordering Chinese, for example, then make the rice at home) and so on.
What’s the E in the ABCs of Saving Money for you?