Do you "envelope" budget? Credit: PinkMoose/Flickr
A friend emailed me with a bit of budgeting advice passed on from her mother, the professional organizer Janet Fishman:
Set up separate bank accounts for: living expenses, play, long-term savings, education, charity, and retirement and have either a percentage or fixed dollar amount from each paycheck go into these accounts. Most all companies that offer automatic deposits for payroll have the ability to automatically deposit into multiple accounts. Figure out how much you need to pay taxes, divide by the number of weeks you work, and that constitutes the dollar amount to set aside for each week. Repeat this for the categories above and you will be fully prepared and organized year round!
This ads up to six accounts – or more if you set up one for taxes and other categories. Phew! That strikes me as a lot to manage. Plus, you would have a harder time hitting minimum balance requirements to keep your account free or low cost.
On the other hand, how much money you have to spend on any given thing would be crystal clear. No pushing money earmarked for one expense to cover something else. Plus, retirement is singled out, which makes it more likely that you will save for retirement.
What do you think of this modern take on the “envelope” system? Would you use it?
By Bobbi Burger Brunoehler of BobbisBargains.
We all know that we should do research before making a major purchase. We know about comparison shopping, haggling, and looking for discounts. But do you know how to mentally prepare? Here are my 10 tips for shopping preparedness.
- Be well rested. If you have small children, it is possible that the idea of getting a good night’s sleep is but a vague memory and dream. If that is the case, take a nap prior to going shopping. If this is a big item you are purchasing, you may consider hiring a babysitter to watch the kids so that you definitely get a nap. I know it is hard, but shopping while exhausted is bad for your budget.
Forget-you-not to enter this giveaway! Credit: lo4u/Flickr
Don’t forget to comment for a chance to win “Saving Savvy.” So far there are only 13 comments, so that’s darn good odds!
“Saving Savvy” is chock full of tips to stop paying full prices for everyday items, trim your grocery budget, coupon, and meal plan. You’ll also find food for thought in the form of bible verses throughout the book and tips on living generously. Not religious? This book will help you set goals and meet them.
To win our review copy, let us know how you have benefited from others’ generosity by Sept. 11, 2011 at 11:59 p.m. PST. If you can’t wait to read more about Hancock’s suggestions, purchase a new copy on Amazon
Just got some interesting economic factoids from the website BillShrink.com. Are you part of the savings trend?
- 46% of credit card holders paid their bill in full each month in Feb. 2009
- 59% of credit card holders paid their bill in full each month in Feb. 2010
- The average American family had $2,000 in unexpected expenses last year
- Americans have reduced their debt by $101.2 billion in the past 14 months ($1,874 per household)
- We are currently saving at record rates, setting a 15-year high (Check out BillShrink’s super cool graphic about American’s personal savings and debt, which goes back to 1960).
- We still over pay for lots of stuff, including ATM fees, credit card late fees, and dealership auto maintenance (though I’m seeing coupons from dealers these days)
To get this data BillShrink surveyed 154,000 users on its site from February 2009-January 2010. The pay off rate has been steadily increasing each month, according to the responses below.
Yes, I pay off balance each month No, I dont pay off balance each month
02-09 46.03% 53.97%
03-09 45.92% 54.08%
04-09 41.75% 58.25%
05-09 43.19% 56.81%
06-09 46.28% 53.72%
07-09 46.92% 53.08%
08-09 48.72% 51.28%
09-09 51.21% 48.79%
10-09 51.99% 48.01%
11-09 54.73% 45.27%
12-09 57.25% 42.75%
01-10 58.63% 41.37%
I’m curious how BargainBabe.com readers compare to the national average.
[poll id="55"]
