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The Envelope Method TO SAVE $5000 IN A YEAR!
Ready to learn how to save 5000 dollars in a year? (Heck yeah!)
If you’re new to this blog, I want to give a special shout out to you wanting to make a change in your financial life!
Now, if you are new to budgeting or managing your finances, no fret! I have tons of resources to help you along the way! We’ve got plenty of articles regarding investing, budgeting, saving money, and all the little tips and tricks we’ve learned over the years. It’s a fun place to frequent!
I discovered this awesome way to use envelopes to save money a few months back, and have been testing it out to see if it actually works.
In short, to save $5000 in a year, you’ll need to buy some cheap envelopes. Then, label each envelope from $1 to $50 (for 6 month’s worth) or $1 to $100 (for 1 year’s worth).
In this article I’ll explain exactly how to follow through with this method and tips to save extra cash this year!
You should also read:
How the Envelope Method Works
Each week you choose 2 envelopes from your stack.
Of course, you want to shuffle to randomize the envelopes, and you don’t want to actually watch yourself pick them. You can make it a habit with your spouse by doing it every Sunday, or another day that works best!
Let’s say you draw $8 and $36.
You need to place $8 in the “$8” envelope and $36 into the “$36” envelope.
If you don’t have the exact cash on you (because, honestly, what new budgeter carries tons of cash anyway?) then be sure to go to the ATM and get the amount to put in the envelopes for the week.
Method 1: Save $1000 in 6 Months with Envelopes
If you stick to this method, and you chose to do 50 envelopes, you will have totaled $1275 in cash!
But, it’s not just the money that matters. To build a habit, it takes months.
Think back to the last time you tried to start a new habit. Maybe it was exercises, meditating, learning a new language, or even playing the guitar. Anyone can recall that building a new habit takes time to make it natural!
So, that’s why 6 months is a great amount of time to start a habit of saving money! Plus, having over $1000 after a few months sounds great no matter what!
Hopefully by the 6th month you will have already started tracking your finances, began budgeting, and started learning more.
But, even if doing this one savings trick is all you did, you’ll be so happy to hold your cash and literally feel your hard work!
Don’t miss out on learning about my favorite free budgeting app to track your money!
What could you do with $1000?
- Go on a weekend vacation
- Pay off a credit card
- Place a payment on student loans
- Purchase new furniture/Home updates
- Start a side hustle
You’d be surprised how exciting it will be to hold over $1000 in cash, and how proud you will feel!
Method 2: Save $5000 in 12 Months with Envelopes
Sure, $1275 sounds great, but imagine if you did this for a full year. Doing it this way will accumulate to $5050.
Yes, you saw that right. Over $5000.
what you could do with $5000
- Go on a large vacation with your spouse
- Pay off a student loan
- Invest in real estate
- Get rid of some serious debt
- Max out your Roth IRA for the year
You could do some amazing things with $5000, and it will feel like it wasn’t hard at all!
To prove how easy this savings method is, let’s think this through: Let’s say you draw $64 and $29 as your envelopes for the week.
You think to yourself, “Well shoot. Where can I find $93 this week?”
Sounds like a lot of money, but don’t worry! This is where your budgeting comes in handy!
Pssst: Go get your free workbook if you want to learn how to do this!!
Some ideas to collect $93 include:
- Meal prep for that week (save you tons on the grocery bill)
- Don’t buy coffee or other specialty drinks
- Sell something you don’t use on Facebook Marketplace or Ebay
- Offer a simple, paid service to someone you know (mow lawn, babysit, etc)
The whole idea here is that, over time, your brain will start finding ways to save money, rather than it being okay with spending, spending, and spending.
You’ll begin to question if you need to really buy something, and it will help you to stop impulse shopping!
3 Simple Steps TO MAKE EXTRA CASH This Year
If you’re wanting to learn how to save money or earn more this year, PAY ATTENTION!
#1. UTILIZE SURVEY SITES
I started using survey sites awhile back and have earn too many gift cards to count. No joke, this works, but it takes some time to accumulate. That’s why I’m excited to show you my two favorite survey sites to earn cash!
I know of people who use dozens of survey sites, but I only stick to two. (With a job and a blog, I just don’t have time to use a ton of apps!). If you want to double your earnings, check them both out!!
I have a step-by-step article here about how to start with Survey Junkie!
Some extra dollars will always be helpful, and it will be smart to keep on earning as the year goes on!
#2. START SAVING CASH NOW
I use a popular free app called Acorns to set aside money throughout the year. I get to stash the money in an account in order to invest the money and make it grow!
Acorns works by linking to your bank and helping set aside “cents” to a savings account after you make purchases.
It’s a really neat way to save up money without even thinking about it – and you could literally save up additional hundreds in a year!
Check out this link to learn more and get your first $10 for FREE!
#3. How To Monitor Your Money
If you’re wanting to learn more about your personal finances, you need to know your credit!
I know, I know. Credit is boring (and sometimes embarrassing!).
Thing is, by improving your credit, you could end up really making a difference for your financial future. For reference, I use Credit Karma, which I’ve loved for years!
Not only is it free, but checking your credit score through them won’t make any difference on your score (unlike some other services out there!).
Especially if you’re new to this whole “money” thing, knowing your credit and your net worth at the beginning is critical. It’s best to get it over with now than wish you’d done it earlier!
3 Tips to Get The Most of the Envelope Method!
- Journal
Sounds boring to some of you, but journaling is considered one of the best ways to success, and top leaders and millionaires spend a few minutes each day doing so! Jot down ideas, feelings, and thoughts about your financial journey regularly! - Read, Read, READ!
We cannot emphasize this enough! Learning is the most important part of your whole financial journey! There are countless books and articles out there, and we recommend tons here on this blog. Go check out our books section to discover your next favorite book! - Get your Spouse/Kids/Accountability Partner on board!
Your financial journey should not be just you. It’s important to get everyone involved. Consider creating envelopes for your kids (reduce the amount they have to put in), or working together with your spouse to save money. The more the merrier!
If you’ve ever needed extra cash, hopefully you’ve learned a thing or two about how to save 5000 dollars in a year! We’ve had this method work for us, and we hope it can work for you too! Be sure to get started with tracking your finances and pick up some envelopes today!
Now that you know how this envelope trick works, go check out how to use the official envelope budgeting system!
