Last week I posted my main goals for 2014. In case you missed it, they were:
I plan on tackling them all head on. Last night I got started on saving money. A few years ago when I was bartending full time, I developed a highly advanced and sophisticated system of secure money organization. I aptly named it,
The Envelope System.
Ok…so it’s neither advanced or sophisticated. But it does work. With bartending, you are always walking out of work with a pretty good amount of cash in hand (you hope, unless the night sucked). I would spent it as soon as I got it. I used to be a really great money manager, but after moving to Austin I traded in financial discipline for lots of good times instead (having fun is expensive). I also cashed out all of my savings and mutual funds to fund our start-up business. So I’m now in the hole. But the envelope system, without fail, always manages to get me back on track.
It’s simple and effective. Here’s how I do it:
1. I start by creating envelopes of the categories I am saving for. Right now I just have 2, personal savings and our Valentine’s trip to Brekenridge.
2. I then determine how much of my pay I want to put towards each category and how aggressively I want to save. Normally 10%-15% of what you bring in is a good starting point. So if you bring home $2,500 a month, take $250 out of that and divide it up amongst your envelopes.
3. If you have any secondary income or have a side business, consider putting a more aggressive amount from that aside. I’ve committed to putting aside 50% of whatever I make from picking up bartending shifts. This will help you reach your goals even faster without putting a stress on your budget. (what budget?! Am I right?! That’s another day, another post)
4. This is the most important part: Put the envelopes somewhere OUT OF SIGHT and of course in a safe spot. You simply cannot spend money you don’t have on hand. I’m the worst about not keeping track of how much I have in my debit account or justifying putting purchases on plastic. NO GOOD!
5. I keep a running ledger either on paper or on my phone of when and how much I “deposited” in my envelopes. This is just a personal thing so I can keep myself accountable and see a running total. It’s pretty satisfying to watch the envelope get full.
6. Here’s the best part. When you reach your goal, go deposit that baby and pay for what you have been saving for!!! And feel rich and good about it!
Saving money is not fun or easy. I love to buy things, but this year I’m going to be a lot more conscious of how and what I choose to spend my money on. I’ve always tried to create budgets for myself, but they just don’t seem to work that well. I do always pay my bills FIRST, then use money left over for any must-haves. Another financial goal I hope to achieve this year is to pay off both of my credit cards and start paying back my student loan.
But those envelopes will come after our Brekenridge trip of course.
Who else is trying to save money and get out of debt this year? What are some methods that work for you? I want to hear!