Savings may not come easy to you, if it doesn’t the envelope challenge savings could be a great way for you to save. Whether you are saving for a vacation, to upgrade a room in your home, a wedding, or simply that piece of clothing you have been eyeing but is not within your budget. Envelope challenge savings can be a simple way to save money, without feeling the constrictions with your spending and it can be fun!
What is the Envelope Challenge Savings
Saving with envelopes is as simple as it sounds, a way to save money, simply by putting it in envelopes and not spending it. There are lots of ways to save money, but if your goal is to save money for a certain thing-think vacation, special outfit, wedding, home, etc., then you have to not only save the money but not spend it. Often people can be okay at not spending on certain things or cutting back, but then if you see a bigger number in your bank account at the end of the month and just go out and blow it, then saving the money didn’t actually do much for you.
That is why saving with envelopes can be the way to go as the money is out of sight and out of mind. You can opt to save daily, weekly, and each paycheck or reduce your spending and save that way. Regardless of how you do the savings with envelopes, know going into it that in order to save you must reduce spending elsewhere. Know in advance where you plan to make the effort to not spend, and what categories.
Savings with envelopes is a simplistic way to save money without having to actively think about it during the challenge. Once you set yourself up, it is an easy task to put the money in the envelope at the intervals you decided on. One way to do the savings with envelopes is to take out the amount of cash you need to save each week, plus your weekly spending on necessities to ensure you have the amount of cash on hand.
Read More: 5 Money Saving Tips for Back to School
Types of Envelope Challenge Savings
Saving with envelopes can be a good way to not only save money but also consciously tweak your spending habits. You can label envelopes in the following way, Didn’t Need to Buy, Got on Sale, Stayed Home Instead, etc. The point of saving with envelopes this way is to be more cognizant of how you are spending your money. Whether Starbucks is your Achilles heel, always saying yes to going out, or buying every cool thing you see advertised while scrolling the internet, learning to save that money instead of spending it, is a great place to start. You might be surprised at how quickly that $5 daily latte or $50 happy hour bill adds up.
Savings with envelopes can also be predetermined with a certain amount of envelopes each written with a number from one to 100 and each time you pull an envelope you put that amount of cash into the envelope and save it for later. You can do this with 100 envelopes to save over $5,000 or 50 envelopes to save over $1,000 or somewhere in between. You can decide if you pull an envelope daily, weekly, monthly, or whatever suits you best for your lifestyle.
Saving with envelopes can be an easy way to save money, reach your goals and develop better saving and spending habits. Another way to help you reach your goals is to go through your home, de-clutter, and sell the items you don’t need. There are so many great apps that you can sell your items to others, from Poshmark for clothes to Offer Up for pretty much everything else. As you declutter and sell your items place that money in an envelope for your goals. For more ideas on saving with envelopes ideas, check out Budgeting for Bliss easy ideas to incorporate.
Read More: The Best Tips to Survive a “No Spend Month”
Pros and Cons of Saving With Envelopes
In order to be successful at saving with envelopes you must want to save money and be willing to make compromises in order to save. Sounds simple, but you must know yourself when going into saving with envelopes. There are pros and cons to saving with envelopes and knowing what will work best for you, your goals, lifestyle as well as what you
If cash is not your thing you can also open a separate savings account and put the money in that account. Instead of putting the money into envelopes each month, just move it into a dedicated account for your savings with the envelopes challenge. Treat this saving with envelopes modification the same as you would if you were to put your money in envelopes, “seal” the envelope, and pretend as if it is not there.
Some might be tempted to break into their cash when savings with envelopes. If you think you might be tempted, make sure you seal your envelopes and you can make a box that is wrapped nicely with a slot for the envelopes. This way the only way you could get to them is to rip open the box, which you will not want to do, think of it as a piggy bank for your money. Consider the pros and cons as you decide whether a saving with envelopes challenge is right for you. Be honest with yourself and know what your strengths are as well as your shortcomings.
Read More: 5 Tips to Save Money This Summer
Savings with envelopes challenge can be an easy way to save for a goal, pay off debt, take a vacation without having to put it on a credit card, save for a special occasion, and more. As with any savings goal, you will have to go into it with an open mind, a plan, and an opportunity to give yourself a little grace during the process. As with everything in life, nothing is perfect and even if you miss an envelope or treat yourself to the Starbucks you are trying to cut out, you can still meet your goals as long as you have the will and desire.
WANT TO READ MORE?
Check out Have A Successful “No Spend Month” With These 5 Easy Ways To Prepare.
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