How To Protect Yourself From Yourself When Spending Money?

How many times have you set a monthly spendings budget for yourself?

For many of us the answer would be: too many times. And as that many times we went over budget.

The first solution that comes to our head when trying to solve the problem of staying within a fixed budget is to track all our spendings and compare all the time with the targeted budget. When we get close to the budget we start to make some cuts.

In theory this should work ... but experience shown us different. Because you earn more than you’re targeting yourself to spend, you may have the tendency to buy goods which you can afford based on your incomes, not on your fixed budget.

There is a simple three steps solution to this problem, and even if you might think of it as too rudimentary, it simply works!

The Envelopes Method

Step #1: reduce electronic pays to a minimum.

Avoid shopping on-line or use your credit/debit cards. Cards are your budget killers!
This is because you don't really feel that you exchange one of your goods (money) for some other goods when you press a button on a website, or when a cashier swipes your credit card through a machine and don't feels any lighter when you get it back.

Try to keep electronic pays only to the bare essentials like utilities bills.

Step #2: make envelopes with cash to spend per week.

Put in separate envelopes the cash you want to spend in each week of the month.
Don't be too optimistic and set a very low budget. This is a sure recipe for failure. Just set a slightly smaller budget than what you spent last month.
Leave your cards at home and try to live only with the money from the envelopes.
In this way you will see all the time how your physical money are less and less as you go through the week and you can take necessary actions.

If you saved some money in a week add them to the envelope of next week. This will be your bonus.

Step #3: re-iterate.

Don't expect to be successful from day one; practice is what makes us better.
At the end of each month see when you used electronic pays and decide if you can reduce them. Just keep in mind that electronic pays are the biggest threat to your budget.

Set a smaller budget than what you had before. Don't decrease it with more than 10%, a realistic decrease can be just 5%.

Conclusion

If you want to cut out on your spendings sprees then lose your cards and spend only cash.

Use a money management platform, just as Troosby to track how much you spent and on what, but limit the money you have available at you on a weekly basis and try to pay with cash – you don’t see the money leaving your pockets when you use cards.

That's it for today! Keep your finances under control with Troosby ... and envelopes :)

What is Troosby?

Hi all,

I am Cristi, and if you are reading this then it means that you are visiting my site, or my blog, for which I thank you.

As this is the first post on this blog I guess I have to do some introduction to Troosby project.

So, what is this Troosby project?

As probably most of you out there I kept track of my finances using Microsoft Excel.
As most of you out there I started with a simple table in which I tracked my spendings. I had different columns for different groups of spendings, like food, car, entertainment, bills and so on.
Sounds familiar?

After a while I realized that I also wanted to track my incomes, as they where not as constant from month to month as I thought. So I added columns for each source of income that I had.
Sounds more familiar?

But that was not enough. I wanted the Excel file to tell me also how much money I had in each account, because, as most of you, nowadays you have your salary bank account, your savings bank account, your credit card bank account, your cash account 'cause cash is just an other account, right?
So I added columns for these as well.

And from here came the multitude of Excel charts added on an ever growing number of Excel sheets.

As I loved programming (my job), I started looking into Java for Web (not my job).
I began creating my own website called Troosby: www.troosby.com (it is incredible now many web domains are already bought).
Initially I tried to implement all the features in my Excel file into the site and when I was satisfied with the results I finally was able to abandon my old trusty Excel document - thank you old friend :)

Now all my data was going on the same server, regardless from which computer, laptop, tablet I was recording the entries.
The problem was when I did that from my smart-phone. My website was not displayed quite nicely in the mobile web browser (still has issues on which I am working on :P).
But regardless how much I would have improved that, a web page displayed on a mobile will never compare with a mobile app.
So I looked into Android Development Kit and I started building a simple application. I wanted to see fast how much money I had and I wanted to record fast any spendings, incomes, transfers and so on. And I did. If you want, you can download the latest version of Troosby Android application from here. Still working on this also.

So that's my little project which takes a lot of my free time. Because of this I have to thank my very patient and understanding wife for letting me stay in front of the laptop every evening, pretending that I am watching the movie with her!

There are other websites like my Troosby out there, you can easily find them with Google. Some of them ask you to give them your bank account details, some ask you for a monthly fee, ans some are free.

Troosby will always be free, everything related to this project will be free - the website and the Android app. I'm working all the time to improve it, so if you have any ideas or you find some bugs don't hesitate to contact me - see the social channels.

The purpose of this blog is first to share with you my advices and my experience when it comes to personal finances management, and secondly to let you know latest news related to Troosby!

So that is Troosby. Hope you will like it and find it as useful as I do!

Cristi