Maybe you've just finished your taxes and are tired of thinking about money, but let's just face the facts. Money is part of life. Some of us have it, some not as much, and some just pretend they do. Everyone needs money management tools of some kind. My grandparents first introduced me to the "envelope system". Now, I know that system would work - that's IF you actually cut up or buried all your credit and debit cards.
We live in a world of fast-paced, convenience. That's one major reason there's so many people struggling financially.ou physically put an allotted amount of money into different envelope categories. And then, when you've used all the money in your envelope, that's it - you can't spend anymore.
A few years ago I was on the hunt to find some kind of system that would work for me. There are so many software programs out there that have great potential - but what most were missing was the fundamental rules of budgeting and education to go with it. Managing your money takes discipline! You can't expect to change spending behaviors or have an intimate knowledge of your finances if you simply sit back and let a software program download your bank information or just by logging in your online bank account to check your balance and make sure you still had money in the bank. Admittedly, when we had two incomes and no kids, that was my way of managing money. I just did my best not to spend too much and I just made sure that I money in the checking account to cover all the bills. And the bills...those were set up in the auto bill-pay so I didn't have to worry about that either!
Fast forward a several years later, now with only one reliable income, a hefty mortgage, and three kids - we have a lot more to "manage". So, I set off to find some helpful financial tools - that's when I found YNAB - "You need A Budget".
This is a fantastic resource for managing your money so you know exactly what every dollar is being used for. It does take some discipline -and some learning in the beginning so you understand the software. The greatest part is that there's free online classes, demos, and forums so you can get all the info you need. Plus, I'm pretty sure they do a free trial of the software so you can give it a good trial run.
The main purpose idea that sets this method aside from others is that the goal is to start living on last month's income. So, instead of waiting to get your paycheck so you can pay your bills, you create a buffer (over time) that allows you to already have that cashflow on hand without worrying about whether or not you can pay a bill. You PLAN AHEAD and budget for all your future expenses and even create a cushion for those that are unexpected.
