The envelope method is one way of budgeting your money. Here how it is done:
Write down categories or labels of your monthly expenses on the back of the envelope and the corresponding amount:
FOOD (the money on this envelope will be used for the grocery and other food related expenses)
UTILITIES (electricity, telephone, water, cable, internet payments)
CREDIT CARD PAYMENTS
AMORTIZATION (house and car, if you have any)
TUITION AND ALLOWANCE
ENTERTAINMENT (watching movies, bar hopping, shopping)
GAS AND TRANSPORTATION ( fuel and transportation expenses)
and some other expenses that you have. But try to limit your envelopes to 7 or maximum of 10. You don't want to be carrying a lot of envelopes. When you receive your salary, try to set aside first the amount for your SAVINGS. Then allocate the remaining money on the envelopes that you have. Just be sure that you stick to your budget. If you find out that there is not enough money left for ENTERTAINMENT purposes, don't get money from the GAS and TRANSPORTATION envelope. I know this is difficult but if you are serious in achieving financial freedom, sticking to your budget is the first step towards it.
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