• Does the money run out as soon as Salary arrives?


• The financial crisis will go away


• Use ‘This’ Magical ‘Envelope Formula’

Money Management Tips: In today’s digital era, when it is possible to spend money with just one click on mobile phone. So to a large extent we spend money out of hand. You are not in control. So saving in all this is no less than a big challenge. A common complaint of working professionals is often heard: they spend like a king in the first ten days of the month, but by the time the 20th dawns, their wallets are completely empty. If you find yourself in a similar situation, be sure to use a very effective method. Which is called ‘envelope formula’. It may be the key to improving your financial situation.

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Lessons in living strictly

As old-fashioned as the ‘envelope formula’ may sound, it is just as effective in practice. Its basic principle is simple: ‘The money that is visible to the eye, is the money that is actually saved.’ When we spend using digital wallets or cards, we are often not fully aware of the exact amount of money that has been spent out of our pocket. In contrast, the ‘envelope formula’ teaches you to stay strictly within your income limits and teaches you your limits.

Make a list of expenses

First, categorize your essential monthly expenses. Like groceries, electricity bills, milk and vegetables, petrol, dining out and entertainment.

Use of cash

After getting salary, withdraw cash from the bank for the expenses you want to control. Keep fixed bills such as EMI or house rent that are paid online separately.

Prepare envelopes

Prepare different envelopes for different expenses. Label one envelope with ‘groceries’, another with ‘vegetables’, the third with ‘entertainment’ and so on.

Allocate the budget

Keep the amount determined for each specific purpose in the respective envelope. For example, if you have set aside ₹2,000 to go out for dinner, keep the exact same amount in that particular envelope.

A rule that will save you money

The strictest rule of thumb for this method is that once an envelope is empty, you can’t spend anything in that particular category after that. If the ‘dining out’ envelope runs out, it means you can’t go out again for the rest of that month. Also, you are not allowed to transfer money from one envelope to another.

Why is this formula great?

This technique teaches you ‘discipline’. When you see envelopes empty before your eyes, your mind automatically stops you from overspending. This not only keeps you out of debt, but also ensures that you have some money left in your hand at the end of the month.

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