help

[moneymom]

HELLO.
THIS IS THE FIRST TIME THAT I HAVE POSTED ON THIS SITE. I JUST NEED
SOME ADVICE ON HOW TO START USING THE ENVELOPE SYSTEM WHERE
YOU PUT CASH IN ENVELOPES AND WHAT AMOUNTS SHOULD YOU PUT IN
THEM I HAVE SOME VERY LARGE DEBTS AND I NEED SOME HELP I GET PAID
EVERY TWO WEEKS FROM MY FIRST JOB AND ONCE A WEEK FROM MY 2ND
JOB I HAVE ALL THE MONTHLY EXPENSES AND I MAKE A CAR PAYMENT ON
A WEEKLY BASCIS. i JUST NEED SOME ADVICE I JUST WASTE MY MONEY ON
STUPID STUFF AND DON'T HAVE A DIME THE NEXT DAY I CANT EVEN DO THE
FOOD SHOPPING BECAUSE OF NO MONEY. PLEASE HELP ME WITH THIS I
WILL TAKE ANY PLAN OR ADVICE.

LOST MONEYMOM

[Broken Arrow]

Re: help

Hello moneymom.

Don't worry, you're in good company.

Perhaps this is me being picky about netiquette, but there is no need to use all caps if it can be avoided. It makes things a bit harder to read, that's all.

Also, can you provide us with some numbers? It helps tremendously to know what you're up against and what you're working with.

The old-fashioned envelope system is the essentially the following:

You write all your bills on each envelope. It may help to write on it how much you need to put in each envelopes each time you get paid. Then, when you get paid, convert it all into cash and put in the allotted amount. When a bill comes up, you pay it with said envelope.

That's the gist of it anyways. I recommend that you experiment to find a system that works best for you.

The prerequisite to the envelope system, however, is having a budget, but again, we'll need some concrete numbers to help you on that.

[debtdude]

Re: help

The first step in budgeting is creating a spending diary. Budgeting is the process of balancing your income with your expenses so your income covers your expenses. Calculating your expenses is more than saying you spend $100 a week in groceries and $x on electrical bills and so forth. Calculating expenses is about knowing where ALL of your money is going. Snacks, parking meter, spare change in the Salvation Army bucket, if you spend money, you much know where you are spending it.

The first step in creating a spending diary is obtaining the proper materials. You should be able to do this for under three dollars. You'll need to buy a pocket notebook. These are usually spiral-bound and about the size of a half a deck of playing cards. Next, buy a couple of cheap pens. You can buy a bag of 10 Bic pens for under $1.50. You now have the materials for developing a spending diary.

Everywhere you go, take the notebook and a pen with you. Record every purchase. This could include gasoline, fast food meals, groceries, utility bills, and even quarters in the gumball machine. Write down the date, the price, and the item. Item might be written as "eating out," "coffee," "gas bill," etc. Keep this going for three months. You might consider a new notebook for each month. Do whatever tracks best for you.

A spending diary should be kept for at least three months. Starting a spending diary in December wouldn't show an accurate average spending for you as you've got additional travel and gift purchases. At the end of three months, you've recorded a fairly accurate representation of your expenses. This makes creating a budget so much easier.

Visit your local office supply store or superstore and check out their filing folders. You'll want an accordion-style filing folder that has tabbed separators. The wider they are, the more information you can keep. Find one with a secure handle. Once you buy one you like, label the tabs. You'll want to label them as they apply to you. Here is a suggest list.

Pay Stubs
Tax Returns
Checkbook Registers
Credit Card Statements
Receipts (this covers ATM's and store receipts)
Bank Statements
Mortgage
Interest Statements
Auto Loan / Insurance

Gather the most recent pay stubs from you (and your spouse, if applicable). Budgeting includes tracking your income accurately. If your paycheck varies from month to month, get the last three months and place them in the file folder.

Tax returns are a great help if you itemize your taxes each year. This is a great way for looking back at your spending. This also provides your annual income. Find them for the last year or two and place them in the folder. One year is enough if you can't find your returns from earlier.

Your check register is a gold mine of information. Having the last year's register will make averaging your expenses a breeze, especially for seasons purchases and vacations.

Credit card statements are another gold mine of information. Place the last year of statements in the folder. Additionally, as you get new statements from this point on, place them into this folder.

Receipts are good for keeping for a number of reasons. If you need to return an item, you know where the receipts are located. Additionally, you can use these to reconcile against your spending diary so you know you are up to date and current in your diary.

Bank statements can help you track the ATM's you take out. ATM's are easy to forget and can easily trash a budget. Many banks now include mini-photo's of your cleared checks. This also helps keep your spending diary up to date.

Mortgage statements are great as they show interest rates and remaining length of loan. There might come a time when you think about refinancing so having this material handy will be great. This folder should also include home owner's insurance and property tax information.

Interest-bearing accounts like savings accounts, money markets, stocks, etc are all types of income. Keep a record of this information be it's money you can put towards debt.