Payday

[kimchi]

16 minutes ago, Lowlow said:

Joking around aside, I recommend an envelope budgeting system.

You are either Neil Hamilton or Mohamed Al-Fayed and I therefore claim my five pounds

(Brown paper bag is fine btw )

[Lowlow]

2 minutes ago, kimchi said:

You are either Neil Hamilton or Mohamed Al-Fayed and I claim my five pounds

(Brown paper bag is fine)

Well, I'm in the U.S., but I suppose it would be fun to hear one of your MP's ask "Isn't it true that Lowlow is your daddy ?" in Parliament.

[Paul]

Think it this method not the system preferred by PMs, councillors, planning assessors 

https://www.moneycrashers.com/envelope-budgeting-system/

So you’ve been working to make a budget using tools like Excel or Mint.com and have been diligently putting in all of your income and expenses. Yet every month, it’s the same result: you continue to overspend.

While your efforts to create and maintain a budget are commendable, there is probably nothing that is actually holding you accountable to that budget. There is no reward if you succeed, nor repercussions if you don’t.

So how can you make your budget actually work for you, and how can you hold yourself accountable to it? Try the envelope budgeting system.

Envelope Budgeting System – How It Works
The envelope budgeting system is very tangible. You use cold hard cash to control your spending and when you run out, you stop spending. Here is the process for how it works:

1. Determine Your Discretionary Income
Before you start the envelope system, determine how much you have available after you pay your bills and put money aside for savings and investments.

2. Decide on a Budget
Once you know how much money you have left, decide how to divide it among the different budget categories in which your monthly spending varies. Some examples of common categories include: groceries, household items, entertainment or dining out, clothing, gifts, gas,  and allowance (to be spent as fun money).

Tip: Look back at your bank statements to get an idea of how much you have been spending in these areas.

3. Create Envelopes and Stuff Them with Cash
Get an envelope for each category and write the category name on the front. Then, after each paycheck, put in the budgeted amount of cash.

4. Spend Cash Only
Once you run out of cash in an envelope, you have met your budget for that pay period and are unable to spend any more in that category until the next pay period.

5. Pay Off Debt with Extra Money or Save It
If you have any debt, use the money left over from your envelopes to pay it off. If you do not have any debt, put your extra cash into savings.

Advantages
It Works! The best part about the envelope budgeting system is that it simply works. If you are only paying for things using cash, and you run out of cash, you cannot possibly overspend. The envelope system has been around for a long time for good reason.
It Will Help Discipline You. We all need discipline in our lives to make us better people, whether it is with our spending habits, our eating habits, or our productivity at work. The more you practice being disciplined, the easier it is to take responsibility for other life areas you want to improve.
It Can Be Used as an Emergency Fund. Instead of carrying cash, many people carry plastic, which can be a problem if an emergency arises. Though the money in the envelope system is not intended for emergencies, you can always use it for one – like if your car breaks down in the middle of nowhere and you need to pay for a tow or a ride back home.
Your Budget Becomes Tangible. The concept of money is much more tangible if you use cash instead of plastic. Credit cards can easily cause you to overspend. When using envelope cash, you will be more in tune with your budget because you’ll be reminded of it every time you reach for an envelope to spend from.
No Overdraft Charges. Have you ever been charged an overdraft fee from your bank? If you put away your debit card and use cash instead, you are much less likely to overdraft and get charged the absurd fee.
Less Wasteful Spending. When I used an Excel spreadsheet to create my budget, I would look back at the end of the month and be surprised to see what I wasted my money on. However, when you use the envelope budgeting system, you are more likely to think through every purchase. You’re less likely to spend wastefully when you see the money disappearing before your very eyes. In fact, people spend 10% to 15% less when using cash.
You Won’t Miss a Payment. When using the envelope budgeting system, you pay upfront and there is nothing you need to keep track of. On the other hand, if you use an electronic program to do your budget, it is easy to miss entering in purchases. I believe the budget I kept electronically was off by hundreds of dollars each month due to the fact that I lost receipts on a regular basis.
excited businesswomen reading good news on
Disadvantages
It’s Tough to Get the Whole Family on Board. Some people are adamantly against using cash. They like the simplicity and ease of using plastic, and who can blame them? However, for the envelope budgeting system to be successful, the whole family needs to be fully committed to making it work. Otherwise, it won’t.
You Must Go to the Bank or ATM to Withdraw Cash. I really try to avoid going to the bank or the ATM. It is just another errand I have to run in my already busy life as a stay at home mom. But if you use the envelope budgeting system, you’ll obviously have to get cash from somewhere to stuff your envelopes.
Getting Started Can Be Confusing. I know that the process I described sounds pretty straight forward, but you will eventually come across situations that can be confusing. For example, if you make a purchase at Target and buy $20 worth of groceries, $20 worth of clothing, and $20 worth of house decor, where do you get the cash from? You will probably need to get it from three different envelopes. You’ll experience a learning curve as you figure out how to stick to your categories.
You Won’t Get Credit Card Rewards. Before I used the envelope budgeting system, I would rack in enough points to earn $250 a year with the best cash back credit cards. But with the envelope budgeting system, you forego credit card rewards because you won’t be using your credit card as much or even at all.
More Tips for the Envelope Budgeting System
1. Pick Categories You Have the Most Trouble With
My husband and I used to have an envelope for clothing. But after about six months of never using any cash from that envelope, we decided it was wasteful to budget money to that category. Instead, we put more money towards household goods, and if we ever decide to buy new clothes, it can come out of that category. There is no need for an envelope category that you do not overspend in.

2. Use a Small Accordion Folder Instead of Envelopes
A good friend of mine made this suggestion. She recommends it because instead of having seven different envelopes to keep track of, she only has one. Her accordion folder is envelope size, so it is perfect for keeping cash. It is also more durable than paper envelopes.

3. Only Take the Cash You Need
If you have budgeted $100 for eating out this month and go to a work lunch, don’t bring all $100. Instead, just take what you need from the envelope at home and put it in your wallet for the day. This is especially helpful when you have multiple people using the same main envelopes.

4. Budget by Paycheck
There are several different ways you can set up your budget: by week, by month, by quarter, and by paycheck. I recommend doing it by paycheck because you can accurately plan your budget according to the timing of your paycheck and bills.

5. Adjust Your System as Necessary
It may take a while to get everything set up correctly. You may go through a dozen pay periods before you get your budgeting amounts and categories just right. Definitely make adjustments. Nothing is set  in stone until you decide you are comfortable with the program.

6. Reduce Your Bills
By reducing your bills, you significantly increase your discretionary income. Consider strategies like finding a cheaper cell phone plan or getting rid of cable TV. Reducing your bills provides more cash for your envelopes.

7. Decide the Rules Beforehand
One issue my husband and I debated was whether or not to borrow from other categories if we ran out of cash in one of them. This is up to each person or family who uses the system. However, I recommend determining the ground rules before starting to avoid possible confusion. Through trial and error, we eventually decided to combine categories that we commonly borrowed from. Remember, it’s fine to adjust as necessary.

8. Use Extra Money to Pay Down Debt
If you do have extra money at the end of your budgeting cycle, use it to pay off debt. If you are debt free, I recommend either investing that money or saving it. I save extra money for the purchase of a van since it is an upcoming expense that we want to pay cash for.

9. Stick with It
It takes time to get disciplined, and it will take time to get the correct amounts budgeted for your envelopes. Have some patience because if you do, the envelope budgeting system will not fail you.

[kimchi]

16 minutes ago, Lowlow said:

Well, I'm in the U.S., but I suppose it would be fun to hear one of your MP's ask "Isn't it true that Lowlow is your daddy ?" in Parliament.

I can probably do that for £500 mate easy and record it for you from Parliament TV, (friend's friend Is Lord Mayor of London who even the Queen has to bow to!)

Would be funny eh?

[Lowlow]

@Paul yep that is it.

Zero based takes the method you've outlined above a step further by requiring that every bit of the currency be used and that you end up with zero in hand at the end of the period, essentially forcing the user to make decisions about what they are going to do with all of their money so they don't have any in hand, eliminating the chance of double spending.  Double spending is when someone, for example, budgets 100$us for gasoline, 100$us for food, and keeps 50$us aside "just in case".  The issue is that they will inevitably ascribe magical powers to that 50$us and, in their own mind, think of it as 150$us for gasoline and/or 150$us for food, and get themselves into trouble spending too much before the period is over.  Zero based budgeting forces that user to make a decision about what that "extra" 50$us is going to do, to give it a job, forcing it to either be gasoline, food, a debt payment, a step towards a new savings instrument, or even a new silver coin or two, eliminating the possibility that it can be multiple things in the future.  The system still remains flexible because as the period continues the user is still free to move money from one category to another (one envelope to another) as needed, so even if that 50$us has been allocated to buying some new silver coins later in the period, it can still be moved to food if necessary.  The user can, of course, end up with money at the end of the period in envelopes, because they might not spend all the money the allocated for food for the month (for example), and that then is used as seed money for the next period.

[FlorinCollector]

Only thing id change about that system is pay off some debt first instead of leaving whatevers left to debt. If you attack the debt first you will have more left over eventually.

[Kookaburracollector]

Any tips on how to get the maximum 1% sellers fee from eBay...I’ve been waiting for ages and nothing..

In the meantime, I have to sell magazines to fund my PM addiction..

 

 

[FlorinCollector]

2 minutes ago, Kookaburracollector said:

Any tips on how to get the maximum 1% sellers fee from eBay...I’ve been waiting for ages and nothing..

In the meantime, I have to sell magazines to fund my PM addiction..

 

 

Im not sure how u get them but i have one active right now till tonight at midnight

[Lowlow]

19 minutes ago, JCRJM said:

Only thing id change about that system is pay off some debt first instead of leaving whatevers left to debt. If you attack the debt first you will have more left over eventually.

Definitely, a lot of people use zero based budgeting to get out of debt.

Of interest, zero based envelope budgeting categories are based on what you are spending the money on, not what instrument you are using to spend the money.  It's an important distinction.  The most basic envelope based system uses physical cash in envelopes, people literally cash their paycheck (or dividend check, or whatever) and allocate the cash to physical envelopes.  This has advantages - it's easy to do, simple to understand, etc, but with the disadvantage of not allowing the user to spend using credit cards, checks, and other financial instruments that drive the modern world.  More complex digital zero based envelope budgeting systems allow the use of credit cards, etc, but they are not "envelopes" (digital or physical), the envelopes or categories are still "food", "mortgage", "gasoline",  etc, and credit cards, checking, etc, are "accounts" that are separate from the budget categories and increase or decrease depending on how the money is used throughout the period.  For example, you have zero credit card debt and you spend 100$us on food, then that account goes to "-100$us" and becomes a liability against 100$us that you have in a checking account, but all of that is a wash in your budget because it doesn't matter where the money lives (in what account), all that matters is what the money is being spent on.  The caveat is that when you start the zero based budget you essentially draw a line in the sand with credit card debt and pretend that your credit card starts at zero, and that all previous activity then becomes a debt you are going to pay off in your budget, and in that way "old credit card debt" might become a budget category.  It sounds complicated, but modern zero based budgeting software makes it very easy to do in real life.  With accounts there is, of course, the inevitable reconciliation against statements (checking account statements for example), and again, modern zero based budgeting software makes that easy with features such as automatic download of account transactions from financial institutions.

All that said, a basic envelope based budgeting system has been around for a long, long time, and many people have been successful with very simple cash based systems.

[PansPurse]

1 hour ago, Paul said:

We all need discipline in our lives to make us better people...

I feel like this should be said while wearing leather boots and flexing a riding crop.

Jokes aside this has really turned into an interesting thread

[Kman]

28 minutes ago, Kookaburracollector said:

Any tips on how to get the maximum 1% sellers fee from eBay...I’ve been waiting for ages and nothing..

I just got one today

I sold something couple months ago, been longer since I bought anything so I don't have very much activity, but I do browse everyday and watch items (not sure if that makes any difference to anything, probably not) 

[mr1030]

I work about 80 hours of overtime a month, and I pretty much consider that my shiny money for PM's and other hobbies or endulgences.  As long as I keep to that amount, I'm fine as retirement, food, utilities, etc, come out of my base pay.  I don't necessarily spend all of that as I tend to buy the shiny stuff I like when it's on sale on ebay or bullion sites, or it's a new release.  I buy some PM's every month, but the amount depends on how much catches my eye in any particular month.

[Tn21]

19 minutes ago, mr1030 said:

I work about 80 hours of overtime a month, and I pretty much consider that my shiny money for PM's and other hobbies or endulgences.  As long as I keep to that amount, I'm fine as retirement, food, utilities, etc, come out of my base pay.  I don't necessarily spend all of that as I tend to buy the shiny stuff I like when it's on sale on ebay or bullion sites, or it's a new release.  I buy some PM's every month, but the amount depends on how much catches my eye in any particular month.

Daaaaaaaam son, 80 hours of overtime. Thats some serious hu$tl£ muscle. Good on u

[PansPurse]

On 26/03/2018 at 14:38, onlyroadtoheaven said:

Absolutely. I put my order through on Goldsilver.be as soon as the money hits my account. Whatever is left is my living expenses for the month. Pay yourself first as the Richest Man in Babylon said.

I'm finally getting around to reading this (about three quarters of the way through). Got to he bit where it advocates using 10% of income as a keeper, 20% for debts and 70% for living. I ran the figures and realised my current living expenses worked out at almost precisely 70%... weird

[StackerNoob]

An excellent topic and one which we all have our own methods.

I have a fairly inflexible budgetting technique. On payday its all hand on deck. I allocate money to my savings, investments and ISAs first, and pay of my credit card balance. Then I send my portion of the rent to the other half. Then I pay the bills and she sends me half the money. By this point, roughly 50% of my money is gone already.

Next thing is to look ahead and see what expensive activities I have coming up i.e trips away, weddings, nights out, gift buying etc. I try to pay these things off in advance but if not, I just keep a mental note for now.

Now we get into shiny territory. It is only at this point that I will start window shopping and filling my e-basket. The exact amount I have to spend varies quite wildly, could be £50, could be £500 (sometimes its zero too).

I have to balance this number with what I think I will need to exist over the next month (food, travel, leisure, a shot on the puggie). I usually leave a couple of hundred quid buffer for small emergencies though. By the end of the month, in most cases, I will not have used my buffer and this goes into the pot for next month. Rinse, repeat.

So in summary:

1) Savings

2) Investments

3) Debt

4) Rent

5) Bills

6) Large expenses

7) Shiny!

8 ) Exisiting

 

 

[Blockhead]

I keep a spreadsheet with a careful budget which covers all my essential outgoings and savings and gives me a final amount at the end. Then on payday I pay an amount a bit smaller than this into another account which is for food and fun stuff - socialising and spending. 

It doesn't quite work as I should really have an essential food budget before I put anything into this other account. I am also getting more interested in gold than silver which is going to be expensive as I generally bought two or three separate items of silver a month, and am in that habit now! 

I like the envelopes and the zero ideas above, and I guess my approach is a debit card based version of the envelopes, but with only one envelope! There's no overdraft on this account and no credit card in my wallet. The problem is I am justifying spending disposable income on gold or silver if it's low premium over spot as a potential part of my pension, but I keep looking at proofs and graded as much as bullion. 

I guess too much discipline would be boring but a bit extra in my case wouldn't go a miss! 

[vand]

Payday is a bit of a foreign concept to me nowadays as I work a 2nd job about 25-30hrs/week, but it has been paying better than my day job lately and its all daily cash in hand (no I'm not a gigolo or take my clothes off in any way shape or form). The important stuff gets taken care like clockwork; always has, always will. 

[PansPurse]

6 hours ago, vand said:

(no I'm not a gigolo or take my clothes off in any way shape or form).

? They way less moral ways to make money, and at least you know you're making someone happy

[Blockhead]

11 minutes ago, PansPurse said:

? They way less moral ways to make money, and at least you know you're making someone happy

People would pay me to keep my clothes on

[airmac]

37 minutes ago, Blockhead said:

People would pay me to keep my clothes on

You could try that then for an extra income? ?

[StackerNoob]

1 hour ago, airmac said:

You could try that then for an extra income? ?

Oooffftt burn son! That was brutal! Eagerly awaiting either @Blockhead's rebuttal or self deprecation.

 

Popcorn/shoulder to cry on at the ready!

[PansPurse]

In uncertain market, only safe investment is PORN!

[Blockhead]

53 minutes ago, StackerNoob said:

Oooffftt burn son! That was brutal! Eagerly awaiting either @Blockhead's rebuttal or self deprecation.

 

Popcorn/shoulder to cry on at the ready!

I thought I made it clear that no one wants to see me present my rebuttal