I was tipped off to this website by a friend Dave Mink. You have probably heard of this strategy for budgeting before, but this company, Finicity will teach you how to do this type of money management
. Its hard to imagine this, but if I understand the statistics correctly, the average income of the typical US family is about $37,000 per year. The average Credit Card Debt per family is over $5,000 per year, and this is misleading because considering mortgages, the average debt of the US family is more likely between $45,000-$125,000.
There are a few classes I wish they would teach in our public school systems and money discipline is one of them.
I remember many a time in college when I was just completely broke, that my money discipline was so much stronger, just because I had nothing and had to watch every single penny- obviously. Yet during those times, I would think, I cant wait to make some money so I can buy this or that.
But…what happens when we start making some good money? It’s a change in our mental outlook on finances….typically not a good change either. It seems that the more money we make, the more we think we have more than we are making, and the result is we spend more than our raise. It usually comes in the feeling of “You’ve been working hard, you have this nice raise…splurge a little..” and that splurging far exceeds whatever it is we are now making, so in the sense, sometimes getting a raise can hurt us and put us in more debt.
Traditional Envelope Budgeting is the practice of putting actual cash into different envelopes and making purchases only from those envelopes. Apparently, it is extremely effective in teaching money discipline and that behavioral change required to get out of debt. The beauty of the Fincity envelope budgeting software
is that the envelopes are virtual and you can track all of your expenses online. It’s a pretty sweet household budgeting software
. Once you are aware of where your money is going each month, it becomes so much easier to understand how and where you can save that money. I remember reading in the Book “The Millionaire Next Door”, that nearly all millionaires can tell you how much they spent every month on clothing because they are keenly aware of where their money goes (and most budget for it).
If you are interested in learning more about developing your own envelope budgeting system check out Finicity.