Creating a budget is the most effective method for accomplishing your financial goals. Having a budget and knowledge of how much you have spent will help you take ownership of your spending.

1. Using Separate Bank Accounts. The best thing you can do is use two different bank accounts. Use the first bank account to “stage” all of your household income. From this account, you can set up your monthly payments to automatically withdraws. You would then set this account up to automatically pay your second account, which you can use for spending.

 

 

 

 

 

 

 

 

 

 

 

The nice part of this method is you are only concerning yourself with what you really have control over.  You can't control your utilities, or your rent.  Now just concentrating on the second account, you can monitor where your disposable income is being spent.  Also, your first account essentially becomes your savings account at the end of the month.  What you don't spend in your auto-pay bills or sent to your 2nd account, just carries over as savings.

2.  Using the envelope method.  Although cheesy to some, I wouldn't bring this up if it didn't work.   Some people have found it very effective by dividing a portion of their income into several envelopes, to save for future purchases.  They may save for a down payment for a car in one envelope, and use another envelope for vacation money, for example.  The great thing about this method, when people do make their purchases, they buy using cash, not credit.  It also helps as a motivator, as people will naturally create new envelopes for what they consider high priority items for them to purchase.  Of course the downside, if your money ever gets stolen or destroyed, you're out of luck.