How to control spending and save money: the rule of the “four envelopes”

Ways to save there are many. Most of them involve careful analysis of spending and a certain restraint. The method of “four envelopes” is more appropriate for those who constantly go into debt because it spends more than it earns, or in the first days after receiving the money “pulls” most of them. This method will help not only the rational approach to the expenses, but also unwittingly accumulate a certain amount.

So, in order to plan spending on a month will need quite a bit of time. You first need to calculate your total income (or family income) per month. From this amount, subtract 10% and set it aside. Some people prefer to save money just for a “rainy day”, but it’s much better to invest or to put on Deposit.

Of the remaining amount you need to subtract the major and the largest items of expenditure – utility bills and Internet, mortgage payments, tuition for children, courses and other expenses. Now all that is left, divide into four parts and place in separate envelopes. The amount in the envelope is the money that you can spend in one week. To exceed this limit it is impossible, or the meaning of this distribution of Finance will not. If the end of the week you have left money in an envelope, they can spend on themselves, to add to the contents of the next envelope to buy something more expensive, like clothes, or to invest in deposits.

By the way, in this system, you may need to create a fifth envelope of cash for unforeseen expenses, for example, for medical treatment, damage to the equipment or to buy clothes to replace damaged. In order not to destroy the system, you can start putting money aside in a separate envelope or add a certain amount to the article of mandatory spending. That is, in the second case, after you have paid all required the envelope should remain a certain amount of money. This is the emergency supply. Over time it will become more and will be able to help out in difficult situations.

Best of all, this method of Fund accounting work if you receive income once a month. But it can be adapted into two payments per month (advance payment and salary). So, from the amount received and subtract the same 10 %. Of what remained, to defer approximately half of the amount (if the payment of the same the half of it, if not – then one more delay and more) needed to pay for all services, training, etc. the Remaining money divide it into two envelopes – two weeks. The second receiving money do the same. Thus, by the end of the month, you should have deferred that money to pay all accounts and within two weeks the stock.