A quick guide to budgeting effectively

Sarah Austin | Lifestyle Editor

Being on one’s own can cost a lot of money; from big items like rent and other bills to miscellaneous things such as a night out or the latest video game, saving can seem impossible. Budgeting with spreadsheets can be difficult or feel like another homework assignment, so a simpler technique is the cash envelope system. This system helps teach mindful spending habits while ensuring the user stays on budget. Here is a guide to start saving money with the cash envelope system. 

To begin, a good rule to follow is the 50/30/20 method: 50% of funds go to needs, 30% wants and 20% to financial goals.

Make an envelope for each category that applies: rent, utilities, phone bill, gas, groceries, emergency, savings and leisure.

Put aside cash in each envelope corresponding to the amount used. For example, rent gets $500 each month, the phone bill gets $75 and so on. To plan for gas, look at past months to see the average spending, or take the miles driven in one week divided by the mileage of the car and multiplied by the price of gas. 

Anything left over after bills are paid can be distributed through the other categories, such as setting a certain amount towards a savings goal for the holidays or wanted item. 

Carrying cash may be an unattractive option for some due to safety or the time to set it up; luckily, there are free applications that follow the same concept and use the 50/30/20 rule. 

“Mvelopes” is a website and app that takes approximately 15 minutes to set up budgeting goals. Another website and app with a similar tool to track spending habits is called “Goodbudget.” More popular in the budgeting category, “Clarity Money” is a free, easy to use tracker that can also be connected to bank accounts.

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Contact the author at lifestyleeditor@thewesternhowl.com