Many people ask themselves the question - how to properly form a budget and get rid of unnecessary expenses? In fact, it is not so difficult, the rule of 4 envelopes, which the women's online magazine Korolevnam.ru will talk about in this article, can help with this.

The main thing in the four-envelope method is to take a few minutes to distribute your expenses and strictly follow these rules.

Why do our expenses exceed our income?

To properly distribute the family budget, you need to learn one of the most important requirements - expenses should never exceed income.

Let's see where the big expenses come from:

- people do not count their monthly mandatory expenses, such as housing bills, utilities, transportation. This also includes money spent on birthdays and other holidays;

- many indulge their whims, spending on restaurants, shopping, expensive purchases, amounts exceeding their income for a few months, thus getting into debt;

- many rely on their "future income", hoping to earn more in the future than today. Often these are completely unfounded hopes.

You can get rid of unnecessary expenses and arrange the financial well-being of the family with a simple option - budget planning.

A budget is a determination of the amount that can be spent in a certain time without compromising finances and control over your spending.

The four-envelope method: how to save wisely

How to learn to budget:

2) be sure to set aside at least 10% interest on savings or in a reserve. It’s better to do it right away, then it’s harder to part with money;

3) set the amount of spending on mandatory expenses - bills for an apartment, utilities, Internet, telephone, school and kindergarten for children;

4) decide on spending on various holidays– Birthdays of relatives, friends;

5) the remaining amount is divided into four envelopes - each envelope contains the maximum amount that can be spent per week.

This is how the four-envelope method works.

At the same time, spending more than the amount in the envelope per week is strictly prohibited. In case of unexpected expenses, money can be taken from the reserve.

If the amount spent per week turned out to be less, then you can do the following:

- set aside money in reserve;

- put in next week's envelope;

- pamper yourself.

In order to save and spend money more wisely, the first two options will be preferable.

The rule of 4 envelopes will allow you to reasonably calculate your budget and not allow yourself thoughtless and unnecessary spending. For greater convenience, initial stage you can replace the number four with another. For example, it is convenient to divide 30 days a month into 6 periods of 5 days.

The transition to such budget planning can turn out to be very painful and difficult, but the result will not be long in coming and your financial condition will gain stability.

Hello everyone, I want to share one in a simple way personal budgeting is the 4-envelope rule.

This method does not require much time for personal finance accounting: just a few minutes a month is enough to use it. Consider the 4-envelope rule step by step.

Step 1.

As soon as a certain income is received (for example, a salary), then a certain share of income is redistributed to reserves or savings. It is necessary to put aside at least 10% of cash receipts into reserves or savings, but the more, the better 🙂.

Step 2

Then you need to allocate funds to pay monthly fixed costs(e.g. utility bills, loan payments, mobile connection, Internet, tuition, rent, etc.).

Step 3

The entire amount remaining after the first two steps is divided into 4 equal parts and decomposed into 4 envelopes. That is why this method was named. Each part (envelope) represents the maximum allowable current expenses for 1 week.

It is strictly forbidden to spend more per week than allotted in the corresponding envelope. In the event of any force majeure circumstances requiring immediate financing, such expenses are paid from the reserves, because the reserves are intended for this.

However, if a week is spent less money than was allotted in the envelope, then the rest can be:

• Add to reserves or savings;
• Add to the next envelope (for the next week);
• Spend as you wish.

Naturally, these opportunities are arranged in descending order of priority, but if you really need to spend money for your own pleasure, then, subject to other conditions, this is permissible in this case.

By the way, it is absolutely not necessary to divide the funds into 4 parts. You can, for example, make 3 parts (each for 10 days), or 5 parts (each for 6 days). The essence of the method should remain unchanged.

Thus, for all its simplicity, the 4 envelope method guarantees compliance with the most basic rules for planning a personal budget:

• Formation of reserves and savings.
• Mandatory payment of fixed costs, which prevents the formation of debts.
• The ability to reward yourself with unplanned expenses, provided that you spend money economically for current needs.

Who is this method for?

• People whose personal budget is small.
• People who don't want to deal with complicated calculations.
• People who are too lazy to devote time to accounting for income and expenses of their personal budget, but who, at the same time, want to start planning to improve their financial condition.

The main goal that is now facing me and my family in financial plan is to learn to live within our means, not to spend more than we earn. And we have some long-standing problems with this (with excessive spending), but I already talk about them, so I won’t repeat myself.

To fulfill my intention this year, I am leading, and in recent months I have been trying to learn how to manage cash flows in my family, but this was of little use. Starting August 1, I tried the Four Envelope method to control family expenses. And today I would like to talk a little about the method and the results that have been achieved.

August was difficult for us financially. One child had to be collected in the third grade, the other in the first, which is much more expensive. My daughter needed expensive orthodontist services. We had to organize a small birthday party. And many many others. It is clear that we have not accumulated any financial reserves to solve these problems.

In such a difficult financial situation, I decided to try the four-envelope method in action, so high hopes I didn't use envelopes.

What is the method:

1. Determine your monthly income.
2. Immediately deduct 10% for savings / investments.
3. Determine fixed costs.
4. Determine the amount of social spending.
5. We divide the remainder by 4.3 and get the amount that remains for a week of life.

Everything is simple, but, as it turned out, and effective. You can read more about the method in the blog of its creator.

Of course, I did not have any physical envelopes. On August 1, I put all the money on a Visa debit card, which I have not carried in my wallet since then, and all our income goes straight there. I opened a separate deposit under the financial cushion. Once a week I withdraw the required amount in cash. And of course, 100% accounting of all expenses. That's it, that's all.

Calculations

When calculating for August, I did not bother much. I didn’t want to immediately discourage myself and my loved ones from using the method, so there weren’t many restrictions.

I took only 10% of my salary for a financial pillow, utility bills, loan payments and communication costs ( home Internet And Cell phones). Everything else was divided by 4.3. In one pile were the costs of clothing, and food, and the maintenance of a cat, and everything else. On the one hand, it was easier this way, because the costs of different categories balanced each other. On the other hand, many categories were disadvantaged.

During the production of the August calculations, we changed this scheme.

Secondly, we decided to allocate a specific amount for the purchase of clothes, which should not depend on how much ice cream we consume.

And thirdly, we decided to save money every month for gifts to relatives and friends. This decision was prompted primarily by the fact that the birthdays of our loved ones are unevenly distributed throughout the year, so in autumn the burden on the budget is large, and the rest of the time it is insignificant. So we decided to level this matter.

The amount per week, of course, has seriously decreased compared to September. Which approach will be more convenient will be seen later.

financial cushion

For the first time in our lives, we conscientiously put a tenth of all income into a separate bank account. As a result, by the end of the month, our financial cushion amounted to 5,800 rubles. For us, this is a big amount. Especially considering that my wife and I, apparently, are pathologically unable to save. This is a great achievement for us.

Frankly speaking, at the end of the month, we had to go into our savings and spend 3,000 of them patching holes in the budget, which was knocked down by school expenses. We did not blame ourselves for this, the reason is that it is necessary to prepare for large expenses in advance, which was not done. In addition, the delay in the next salary summed up.

Week vs. month

In general, I can say that in August we did not always fit into the weekly norms, but by and large we completed the global task of not spending more than we earn.

We started spending less. What was the reason for this?

I blame our success primarily on the shortening of the reporting period.

Previously, I tried to plan a budget for a month.

This led to the fact that at the beginning of the financial period there was a lot of money, and the reporting day was often far away. This created the conditions when you can easily and carelessly spend left and right, but then 2 weeks before the end of the month there is no money even for food.

Reducing reporting period up to 7 days, we have created a situation where there is never a lot of money, and the end is always close. Even if there is no money for the last couple of days of the week, then for a couple of days you can somehow live on bread and water, it's easier than living without money for 2 weeks.

Tools

To manage finances using the 4-envelope method, I use Zenmoney, about which I still can’t think of writing a separate article. In principle, any program or a simple table is suitable for this. It is enough to either divide the expenses into the appropriate categories, or enter a new tag. All programs, of course, are sharpened under monthly planning, so when viewing the reports, you have to select the dates manually, but this is not difficult.

Total

We have learned: to save 10% of income.
We were able, albeit creakingly, to spend only what we earned.

Everyone liked four envelopes, we will test them further.

Controlling the family budget is not an easy task, if it is given to you without any problems, then most likely you live with a sense of stability and confidence in tomorrow. You know in advance all your income and expenses and can properly manage your funds.
But if suddenly you do not control your cash flows, then your budget is likely to be chaos. In no case should you live like this, because sooner or later it will lead you to bankruptcy. Money must always be counted.

The simplest and most understandable method for planning a family budget is the so-called envelope rule. The name fully reveals the essence - that is, to manage finances, we use ordinary postal envelopes. With this method of accounting for money, we do not need strict control and reporting, as, for example, with the tabular method. This method of accounting for funds appeared back in the Soviet years - when there were no deposit or savings accounts familiar today, and money was stored mainly under the mattress, that is, they could physically feel it.

Let's move from words to deeds. The method includes three main methods: the rule of four, five and seven envelopes for budget planning.

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Rule 4 Envelopes

• Calculate total family income . We put the profits of all family members into a common fund. As a rule, this is the salary of a husband, wife, parents' pension if they live with you and agree to maintain a joint budget, children's scholarships, additional sources replenishment - any income, part-time work, etc. Everything goes to the community.
• Deducting our mandatory payments . Ongoing financial obligations - payment utilities, housing and communal services, communications - Internet and cellular telephony, loans, mortgages, kindergarten payments, etc. It is important to note that here we make exactly those obligations that we are 100% obliged to fulfill, there is no need to add extra (entertainment, gifts)!
• We divide the remaining amount into 4 equal parts. We spread it into four envelopes at the rate of: one week - one envelope. As a result, it turns out that a periodical financing fund was created. Now our task is as simple as three pennies - to live 7 days on one envelope. That is, we will have a certain amount that we can spend, but at the same time we will not be able to go beyond it. It is absolutely impossible to open the second envelope when the funds in the first one have run out. This is how we will instill financial discipline and calculation in ourselves.
• Savings . If we have lived safely for seven days and we still have unused money, we do not spend it, but put it in savings - we put it in the bank, invest, etc.

Example: Let's take an average family: the husband receives 35,000 rubles, the wife 20,000, there is one small child. It turns out:

1. The total amount of the family budget is 55,000 rubles
2. Mandatory expenses about 30,000 rubles
3. We divide the rest of 25,000 rubles into 4 parts and get 6,250 for a week. With this money we eat, dress, pamper ourselves if necessary, but in no case go beyond.
4. The rest, even if it is 250, 500 or 1000 rubles, we put aside in a savings account. At the end of the month, we analyze the result. If there are funds left in our passbook, we are doing everything right and gradually accumulating money, which gives us a guarantee of financial stability. If there is no money, then we need to try to reduce weekly and obligatory expenses, even for the sake of our comfort, and find sources of additional income.

Rule 5 Envelopes

This method is considered to be more advanced. Indeed, in life it happens that we urgently need money - car repairs, dental treatment, operations, but there is not enough money. Get into debt. This method will protect you from this.

• Points 1-2 are completely identical to the previous rule.
• The rest of the amount is divided into five envelopes. Four is still the budget for the week, and the fifth is the long-term savings envelope. In it, we without fail set aside money for unforeseen expenses, for expensive purchases - an apartment, a car, children's education, etc. That is, for a large financial goal. Moreover, even distribution of funds is considered optimal - 20% for each envelope.
• As a result, we have all the same tight limits of the family budget + 100% guarantee of the fulfillment of the set goal and a reserve of funds if necessary.

Rule 7 Envelopes

This method is fundamentally different from the previous ones, here we do not set aside money for time periods, but carry out accounting by category: seven envelopes - seven categories. At the same time, close attention should be paid to the hierarchy, in the first positions the most costly and mandatory financial obligations. Another feature is that we lay the envelope for a month - that is, you need to be very disciplined so as not to spend everything at the beginning. Also, money from one envelope cannot be used to finance another.

1. Payment for services. Utility bills, communications, transport, Maintenance car, insurance.
2. Purchasing food - drawing up a correct and balanced diet, without frills, according to the allocated amount.
3. Expenses for children - payment for kindergarten, sections, circles, education. Buying clothes, toys, entertainment.
4. Cloth. Purchase of seasonal clothing, this also includes the purchase of personal care products.
5. Savings. We try to set aside at least 10% of the total funds.
6. Entertainment. Going to the movies, bars, restaurants, intimate gatherings.
7. Present. Meetings, birthdays, anniversaries, weddings. The item, of course, like the previous one, is not entirely mandatory if you stay at home and save all the time. But to allocate at least a little money for it will not be superfluous.

Conclusion: the method of "envelope" accounting of finance is suitable for absolutely everyone, it is simple and understandable. You can try for yourself all 3 accounting methods and choose the most convenient one. In any case, the benefits will be enormous.

So four envelopes is four weeks. One envelope contains the amount that is needed to make purchases within 7-8 days (depending on the total duration of the current month). This means that each envelope contains funds, part of the budget exclusively for the week.

An iron rule: if the money in the “actual” envelope is running low or runs out, it is forbidden to borrow funds from the next envelope. Also, you can not open a new envelope ahead of time, if you want to make a spontaneous purchase: buy things on sale for the occasion, etc. Such actions make the process of accumulation meaningless and impossible.

How is it possible to accumulate funds as a result of such control? It's very simple: pre-set amounts, determined before the division into 4 weeks, are sent to the fifth envelope. This is the "cup". The fifth envelope is the most inviolable of all. Funds from it cannot be spent until the planned amount is formed.

How to Successfully Save Money with Four Envelopes

The “four envelopes” rule itself is a wonderful thing, but in practice it does not always work and not for everyone. There are reasons for this. In order for the accumulation process to be successful, several conditions must be met. Some of them have already been mentioned above: do not open envelopes ahead of time, do not touch the piggy bank itself until you have collected the target amount. But there are other important conditions as well.

First, in order to start saving money, the entire family budget as a whole must be in surplus, that is, one where income exceeds expenses, and the larger the surplus, the better.

There are two types of budget deficit: objective and subjective. Objective conditions, when expenses suddenly prevail over income, arise for various reasons. For example, mandatory payments have risen sharply, prices in general have shot up, someone has fallen ill and expensive medicines are needed - all these and similar factors, due to objective circumstances, can create a budget deficit.

The subjective cause of the deficit is the person himself, the owner of money, who is inclined to indulge his various “wishlists”. Irrational and large spontaneous spending lead not only to a lack of money, but also sometimes force you to get into debt, take loans, including at high interest rates. All these are very toxic assets, they are extremely dangerous with the threat of bankruptcy, deprivation of basic life benefits.

Even small but constant irrational and unplanned expenses create a situation where accumulation is basically impossible. Then, in order to make a large purchase, again, they resort to loans and credits, overpaying and losing money on interest.

If the family budget deficit is covered from some other sources (for example, parents help a young family), it will not work to save a significant amount either. There is only one way out - to look for additional sources of income: part-time jobs or a higher paying place, passive income, etc. One of the ways to approach a surplus is to optimize the budget, save money.

There are plenty of ways to save money without depriving yourself of comfort. As for paying for housing, these are modern utility meters, energy-saving lamps, and home insulation ... It has long been known that gas costs much less than electricity, using a gas stove instead of an electric kettle will give tangible savings.

The rule of savings when visiting a store is known. In order not to buy unnecessary things, it is advised to take just enough money with you, only for what you plan to purchase. It also works well to advise you not to go to the grocery store without first having a meal. Simple savings on small spontaneous acquisitions gives a fairly significant increase in your piggy bank.

So, in order to successfully save according to the “four envelopes” rule, financial discipline is required. The very fulfillment of this rule already develops and strengthens such discipline.

What to do if you can’t pull yourself together at all and you are very inclined to spend money irrationally? You can get an "external manager". It can be anyone: relatives, Good friends and so on. Such a "Cerberus" should control your spending and periodically revise all "envelopes". By the way, the storage of the "envelopes" themselves can also be entrusted to the "manager", if you are sure of its reliability.

What shape do the "envelopes" themselves have? It can be real paper envelopes, quite. However, there are more modern ways store funds. Let's say four debit bank cards to which the monthly income is proportionally credited. Each of the cards is allowed to be used only for a week, without touching the next ones. You can issue an order to the bank so that funds are transferred from a single account to each of the cards strictly on a specific date. A total of four transfers per month. Any method of storing money that is convenient for you is acceptable.

What is the best way to save funds from the piggy bank itself, from the fifth “envelope”? Very convenient term bank deposits, money from which can not be withdrawn for a certain period of time. Safety is supplemented, albeit by small, but percentages.

Part of the money from the fifth "envelope" can be invested in reliable assets: bonds, stocks famous companies, give in trust management, etc. As for high-risk investments, they are not very recommended: after all, the goal is to save money, not to lose it. But 10-15 percent of the total size of the "pod" can, if desired, take the risk of using it for such an investment.

If you decide to just keep the money at home, you should take care of their safety. The larger the amount, the better the security system should be. Large accumulations may require even a good safe and an alarm system displayed on the remote control of a security company.

"Rule of four envelopes" and force majeure cases

Force majeure here will be understood as any unexpected and destabilizing serious event. These can be sudden illnesses, natural disasters, fires, flooding of living space, criminal threats, etc. Simply put, what to do with the rule if the money from all the envelopes is needed, say, for medicines?

A good way is to insure health and valuable property. Periodic payments under an insurance policy or a one-time premium will be the “sixth envelope” that will help in emergency circumstances. When purchasing a policy, carefully read the terms of the contract, provide for the maximum of cases for which insurance coverage is provided.

Unexpected expenses

Life does not obey strict rules and unforeseen expenses will inevitably arise. These are usually simple everyday things like holidays, unexpected breakdowns, small losses, etc. Ideally, spending on someone's birthday should be planned by putting the money in an envelope for that week. But there are also unexpected visits, invitations to visit, to the cinema, cafes ...

Still, you need to add one more envelope. If you need money from it, it means that it came in handy. Were not needed - well, we send them to the piggy bank.

Where to put the surplus?

Infrequently, but the money in the current envelope after a week may remain, and different amounts, both insignificant and serious. We also recommend sending this savings to the piggy bank. However, at times it is not forbidden to treat yourself to something, to spontaneously spend a little of the funds, to deviate a little from the rule.

It is important, confirming the rule with an “exception”, not to make irrational spending a habit: then the collapse awaits all efforts and the whole idea to accumulate the right amount leveled out.

"Four envelopes" - not only for savings

You can live by the “four envelopes” rule not only if you want to save up for something. In general, increasing financial discipline using this technique is useful in many cases.

Very often there is a situation when, having received money, people spend almost the entire amount in the very first days. When it comes to salaries, then the “rich” life in the period after receiving the funds is replaced by belt-tightening by the end of the month. The classic “borrow before payday” problem leads many into the clutches of moneylenders from microfinance institutions. The “four envelopes” system, by its very nature, excludes situations when money runs out on the last days of the month.

Financial discipline is useful just for those who are used to living on credit and tend to believe that the bank's money is its own. The funds will have to be repaid at some point, and with interest. Many people use credit cards too smartly, getting into deep debt. To accustom yourself to avoid unnecessary temptations, thereby getting into unpleasant and even difficult situations, the technique that we are talking about will just help.

It is also worth turning to this method if debts have already been accumulated and you really want to pay them off, at least partially. Then the budget is made with very austerity, counting literally every penny. Everything that goes into the fifth envelope, into the piggy bank, goes not to your own expenses, but to creditors.

It is very useful to structure finances in our way for families who pay mortgages. By the way, “four envelopes” can also remove the fear of such a loan. If you carefully calculate income and expenses, it may turn out that the available funds are quite enough to ensure monthly payments, you may need to save a little or earn some money. But there will be own housing.

Also, according to the “envelope” method, it is quite possible to simply save up for an apartment or house, and not in twenty years, but much faster. True, in this case, income should be above the average level. You can additionally send funds from the sale of valuable assets, a car, a land plot, etc. to the piggy bank. Thus, in a fairly short time, the amount necessary to buy the desired home is “formed”.

An example of calculating monthly income and expenses

Suppose the net family income per month is 50,000 rubles.

It is planned to put aside 10 percent, or 5,000 rubles, into the piggy bank.

Subtract mandatory payments (for an apartment, Internet, kindergarten, etc.) Let's say it's 10,000 rubles.

10 percent, that is, 5,000 rubles, will go to the reserve for unforeseen expenses.

In case of force majeure, also 10 percent, another 5,000 rubles.

In total, 25,000 rubles remain for expenses per month.

Dividing 25,000 by 4, we get 6250 rubles. In this case, this amount can be spent every week.

If it turns out that there is not enough money to live for 7 days, there are only two ways out: save money or find a source of additional income.

By saving 5,000 rubles a month, the family will save 60,000 rubles during the year. A lot or a little depends on the level of income and claims. But at the time of writing, for 60,000 you can buy a complete set of furniture good quality for a medium sized living room.

If the family had taken a loan at 25 percent per annum, the overpayment would have been 15,000 rubles. Taking into account the interest, the monthly payment would be 6,250 rubles, which is significantly more than it was planned to postpone (5,000 rubles each).

It can be seen that thanks to the “four envelopes” rule, profitable opportunities for various purchases appear. When calculating the cost of future acquisitions, it is worth evaluating the possible level of price growth (and there are things that are getting cheaper). Inflation is compensated by the instruments that we have already talked about: a bank deposit, etc.

We wish you successful savings.