How to manage your spending

One of the toughest tasks is trying to save money meanwhile still enjoying your life. In order to help us in this task we went back to an old spending limit system, the envelope system. We split all of typical categories of spending and set a limit for each month. We spend the money from the envelopes until it runs out. All of these categories are non bill related such as groceries, restaurants, haircuts, dry cleaners, home renovation projects, baby equipment (we are having a baby soon) etc. Let me backtrack a little and recommend that you first start with adding up your total monthly income. Next, calculate all of your required monthly bills. I recommend setting an amount you want to be able to save per month and add this into the required monthly bill category. A wise person once told me to pay yourself first each month. Otherwise you always end up saving whatever is left at the end of the month which normally isn't much. After subtracting all of your bills, categorize the rest of your spending to generate envelopes. Set an amount for each envelope that seems reasonable. Some examples of our envelopes are $300.00 a month for groceries, $200.00 for restaurants, $100.00 for gifts (it's always someones birthday, wedding, or any other reason to give a gift), $30.00 for haircuts, $20.00 for dry cleaners, and $100 for home renovation projects. We have more envelopes but these are just a few. As you begin to make envelopes you will realize that you have more expenses than you realize. After creating your monthly amounts for the envelopes you might be able to add more to your monthly savings or realize why it has been so difficult each month with your finances. Now, the whole envelope idea is that each month you take the money from your paycheck and divide it into the respective envelopes. During the month you take your cash from the envelopes and only make purchases with your envelope money. DO NOT USE YOUR DEBIT CARD. YOU DON'T NEED TO! Once the money in an envelope is gone, you have reached your budget limit. Spending this way makes sure that you aren't just spending money places because you think you have a little extra in your bank account for the month. If you have extra money in a category after a month you add the next months budget to it and continue to do this. Some expenses you might not use each month such as a haircut can be calculated keeping this in mind. We have been able to save a fairly high number every month while using this system and it has helped control our spending. It may seem like an inconvenience at first to remember to grab cash or you may be inconvenienced when you see a sale and really want to just swipe your credit card. I would say just don't buy it. You probably don't really need what you are tempted to buy and it will most likely limit how much money you can save. If you are trying to find ways to lower your monthly spending on specific categories I will talk about that later. Good luck! Leave me a comment below and let me know what you think! I'm a newbie so any feedback would be great!