Simplest Money Management System Ever

Photo by Sharon McCutcheon on Unsplash

Managing your money doesn’t need to be complicated and it doesn’t need to take up a lot of your time. In the end, all comes down to with any money management system is:

  • Spending less than you earn
  • Saving and/or investing the rest

For those just getting started in adult life or those wanting to start managing their money, the Cash Envelope System is the most basic, easiest, simplest and least time consuming system there is.

All you need to get started is 3 letter size envelopes labeled BILLS, SAVINGS and CASH. All three of these envelopes are to be used every payday.

The first thing you do every payday is to pay yourself by putting money into the SAVINGS envelope. You can save a percentage of your income or simply put in a set dollar amount. It is important to not withdraw money from this envelope as this is how you will establish your Emergency Fund.

The second envelope you put money into is the BILLS envelope. Put the amount needed to pay your bills due before your next paycheck.

Finally, the money to put into your CASH envelope is to pay for your living expenses until your next paycheck. This is all you have until your next paycheck so spend it carefully.

The cash envelope system lets you know simply and easily how to divide your money up so all bills are paid, money is saved and how much you have to spend for everything else until your next paycheck.

You can always move up to a more advanced and specialized money management systems later.

If you are using a different basic and simple money management system, please let me know what it is.

“Being frugal doesn’t mean slashing your spending or depriving yourself of things that you enjoy. It means knowing the value of a dollar and making every effort to spend it wisely.”

Frank Sonnenberg, BookSmart: Hundreds of real-world lessons for success and happiness

Published by W. M. Brown

I am a retired U.S. expat living in Ecuador. I was a business owner for 32 years before retiring in 2012.

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