The better means of strategy is first creating & maintaining monthly spreadsheets to pinpoint exactly what is coming in & what is going out; this will give a clear picture of what needs to be done to save & what spending luxuries need to be lessened or stopped all together...I make a decent living at the heart of the city, but it can be an expensive venture if I wasn't strategic with how I use my income. Making money is the easy part, turning it into more money is a play on discipline, but it's where the advantage lies.

For those unsure, Micro$oft Excel for Windows is the best & easiest program to keep track of monthly expenses - many of the others out there are pretty graphically, but fall short on practicality.

if you are going to eat out. try to eat out for lunch. most often places will have lunch specials where you can get a good meal for a decent price. also, take home leftovers, great for next day.

I agree with Alice's cash system to some extent. You do tend to get more disciplined when you see that bundle of bills dwindle down to nothing.

However, don't slam the plastic just yet. Don't cut up all your credit cards either. Having that option available is helpful in some situations, and it is a good idea to establish a good credit history. Having a very low utilization gives you a fair credit rating, which is useful when you're ready for the big stuff like financing cars, houses, and college.

Still, with credit cards, you must pay the whole amount off when it is due. Otherwise, if you only pay the minimum, the interest will become astronomical. Case in point: a credit card with an Annual Percentage Rate of 30%, will cost you 34.48% in interest (compounded monthly). It's even worse in the Philippines - a "low" 3.5% monthly-bearing credit card which translates to 51.11% annual interest.

Yeah, I use my American Express card for everything I buy (unless it's something under, like, $5) so at the end of the month I get a complete statement and I know exactly where all of my money went and how much it cost me. Add in all of the perks you get with their card (free extended warranty, customer satisfaction guarantee, cash back/rewards, etc.) and I've found it to be a pretty good system. I don't even have to mail in a check at the end of the month since I can just go online into my account and pay the thing off in about 30 seconds. I always get annoyed when a place won't accept AMEX and I have to use my debit card. :(

I've also found that Costco has the absolute best deals on generic medicines ever. A normal 12 pack of Benadryl is a few dollars, yet I was able go get a jug of 400 pills which work just as well for $5.00. I use them as a sleep-aid nowadays when I know I have to wake up early the next morning because they're so cheap.

Jesus woman, what kind of car do you drive? I drove from Pennsylvania to California cheaper than that.

It's a Toyota 4Runner, but I drive about 50 miles a day. So sad. So many books on tape.

It's gotta be more than that since even at 15MPG you'd only be paying $300 a month for gas at $3 a gallon (and still about half the distance I drove when going from Philly to LA).

Well, that's just to work and back. I'm always running around everywhere with kids.

My mother uses this exact system. She's been doing it for years. I was always confused by WHY she did it when I was little. She's on such a limited income, she HAS to see her cash in front of her before she goes and splurges on those used hiking boots for $30.

I tried this system when I was living on my own, and I can tell you I had one HELL of a time doing it. I could never properly anticipate each bill, I would need to take from one envelope to pay for another bill (heat was so outrageously expensive), and my deadbeat roomate never had HER share of the money, so I had to often pay HER way just to make rent in time.

How did you decide to divide everything up? I mean, it took you only 6 months to know how much you needed?

Do you own credit card accounts? Do you use plastic at all? I am just curious if I should try it all again. I know I could save a LOT more money - I don't have a very expensive lifestyle. I just buy a bunch of BULLSHIT like yarn, cat toys, and uncessary clothing. (Also shoes and bags god i am so dumb)

My aunt used the envelope system when we were growing up too, so it definitely has some history - perhaps some magazine in the early 20th century popularized the method. After she died, my uncle was still finding the occasional odd envelope of cash for a couple of years.

Well, what we did was we estimated what we thought we were spending in each category and started with that figure, but for five or six months we kept running out of money in certain envelopes way too early and having money left over in others. We finally got it figured out, but there are still months when we run out of, say, grocery money before pay day. Now, we actually have a separate envelope for holiday meals that we use for Christmas and Thanksgiving, etc. when we know we're going to be spending more money on groceries. And also, we don't fund every envelope every month. Like that one, for instance. We put like $50 or $75 in it one time and just lock it away until we need to use it.

Yes, we both have debit cards (I haven't used mine in almost a year, though) and we each have an American Express card, which I only use when I have to pay for something on Ebay or something like that.

Honestly, it's a complete pain in the ass to get the system set up and running properly. Once you've figured out how much you really need in each category it's easy, though. I would only recommend doing this if you're very undisciplined with money.

Oh, and we both have an envelope called "Don't Ask" which is basically spending money for stuff we don't budget in (cat toys, yarn, flower bulbs, etc.).

If you want to know the simple solution to everything either start logging all your transactions, OR what I prefer, just card everything (ie. digital logging). I even card at fast food these days.

At the end of the month GRAPH all your data. Over a period of 3-6 months you should be able to get a general feel of your ins and outs without changing your lifestyle, then you can play on your weaknesses accordingly.

It's all about the graphs. Statistics don't lie, and unless you're prone to a sudden personality overhaul, you should be kosher.

edit: Alice you are insane I'd shoot myself in the face if I ran that system. A "haircuts" env? Damn.

Something I came up with a while back, and has so far served me well:

Doesn't apply to everything obviously, but its a great maxim to follow when you're trying to save money, as per the intent of this topic.

Money saving?

All I do is reserve $100 per paycheck - don't waste it on anything. Yes, per paycheck. Put it on your savings account or your Money Market thing and never touch it. Best if in the Money Market though - the percentage allows your money to grow.

Years from now you'll reap your rewards.

Other than that, don't buy shit you won't need and cut down on luxury items. Hell, it's hard for me to do even, but it can be done.