Have you tried the 'envelope method' of budgeting?

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When I started my business over eight years ago, money was tight. I mean really tight. I had no client base and no savings to fall back on. And no spouse to help pick up the slack financially. I was on my own, and working in an industry with a very long sales cycle. What was I thinking?

I ate my fair share of ramen noodles and macaroni and cheese. I clipped coupons and trolled the sale fliers for bargains. One of the ways that I managed my budget was by not using credit cards. I knew that in my precarious financial position, playing with plastic could get me into trouble quickly.

So if I didn't have cash, I didn't buy anything. The "envelope method" of budgeting worked very well for me at that time. Each month, I put a predetermined amount of money in envelopes for groceries, gas, household supplies, medical, and life's other necessities. When the envelope for a particular item was empty, I was done spending for that month. If I had money left over in an envelope at the end of the month, I used it as fun money.
This was an extremely simple way of managing my money when I had zero extra money to spend. It's easy to assess your financial position during the month. Are the envelopes empty or not? Probably the biggest benefit to this method was not using credit cards. It's too easy to spend money when you're using plastic... so this method took away the temptation.

Give it a try in your household, but give yourself at least six months on the budget before you decide if you're going to continue with it. The first couple of months may be hard as you're trying to figure out how much you really need to spend on certain things. By the third or fourth month, you should be more comfortable with the process. And by the fifth and six months, you should hit your stride and be completely immersed in the process. Happy budgeting!

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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