During inflation, remember this personal finance strategy, how to use it, and what to consider.
The economic situation is not at all comfortable for many, taking into account the rise in prices and inflation. Therefore, more and more young people have been opting for an old and simple method to organize and limit their expenses and avoid falling into debt. The method for saving envelopes is plotted. Do you know what it is and how to do it?
Young American consumers prefer to be ordered before accumulating uncontrolled debts on credit cards, which do not go hand in hand with low salaries and an increase in the cost of living. And today, even the products in the basic basket have increased their prices, so the budget is misaligned. If you want to know more about this saving method, read on.
What is the method of saving emissions?
One of the most popular financial techniques is overdraft savings.
Focus on your financial goals to stay motivated. Results won’t come soon.
Divide the month’s spending into envelopes per category.
This compels you to determine each segment’s budget at the start of the month, saving you money.
HOW DOES THE ENVELOPE METHOD SAVE MONEY?
Saving money on envelopes is simple, according to personal finance expert Alejandra Rodrguez, and she explains how:
- When you need money for food, medication, or fun, you open the supermarket, pharmacy, or leisure envelopes.
- It is important to create an envelope for “other expenses,” which you must use in case of an emergency. For example, if the money is sold out in one of the aforementioned,
- Transferring money between envelopes breaks the strategy and makes saving harder.
Thus, the “other expenses” envelope.
What should I keep in mind if I want to save on envelopes?
If you want to start using envelope savings, here are some factors that you should take into account, according to finance specialist Diahann Lassus on CNBC:
- It starts little by little: personal finance experts recommend that people start accumulating cash; they must start with large and important fixed expenses such as a mortgage, payment of water and electricity, etc. It’s a way to be consistent.
- Security: It may seem satisfying to have folders full of money, but you should also be careful not to leave large amounts of cash at home.
- Save: To protect your cash and take advantage of the interest rates of banks, there are those who deposit their savings every time they accumulate between US$500 and US$1,000.
- Saving money on envelopes takes more time than paying with a debit or credit card.Cash payments may incur commissions.
Budgeting, withdrawing money, and assembling envelopes at home take time.