23 II Ditch Cash Envelopes, Learn Hybrid Budgeting Method Stress Free, Get Credit Card Work For You

Show Notes:

You probably heard about the cash envelopes budgeting method. This is when you designate one paper or plastic it doesn’t matter envelope to a specific budget category. There is nothing wrong with it but I find it extremely unpractical and inefficient. It is very unsafe to carry bags of money with you in the store when your hands are tied with many moving parts and when your kids are with you. Plus managing the envelopes themselves is another level of time and energy that makes this method time-consuming and ineffective. Let’s look at the hybrid budgeting method.

This is a combination of using your online checking account and your credit card. It takes you to devote about an hour of your time preferably on a weekend to get it going. It will require your daily attention for a few minutes to simply jot down your transactions for the day. A credit card is a convenient, secure tool that helps us with our daily lives, and every time you use it you earn cash back, not every credit card offers this though. This is the only credit card I recommend to have, no others just this one and only. Same with a checking account it's just another tool to help us to keep a close eye on what’s coming in and out. You might ask, why just not have a debit card and not even bother credit card?

I prefer working with credit card, my main reason is that it provides very good security over your account. Debit card does not, and secondly, many credit card banks pay you cash back, and thirdly, you can put a credit limit on your credit card. Why it is important to establish your credit card limit? Let’s look at it. Here I would like to make a disclosure. If you are a business owner, please make sure to separate your business bank account from your personal. Right now, I am talking only about regular personal checking and credit card accounts.

To establish your hybrid budget method:

1. List all checking bill pay transactions you pay monthly. Establish a three-month average for every bill. Total all the bills and designate this amount as your Bill Pay budget.
2. List all credit card transaction categories and establish the average of three months. Set the credit card limit to the established budget.
3. Have daily Money Squad time to record daily transactions analyzing for the next month. Get your Monthly Money Time to get your budget ready for the new month.

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