PLANNED SPENDING

Money problems at home are not a result of a lack of money, but rather the mismanagement of money. How do you come up with more money to stretch to the end of the month? Having the right tools to help you plan your spending can make a difficult job easy. Budgeting money has always been a tedious task for most people. But the fact is, if you create an exciting plan, stick to it, and measure yourself against it, you can get what you really want. Planned Spending also helps eliminate the inevitable future surprises. Woodland Prescott can help develop tools for families and individuals who want to allocate their resources toward specific financial goals.

What is Envelope Accounting?

Woodland Prescott promotes a tool called Envelope Accounting. This money management system (sometimes referred to as Accounts System) helps you manage your money rather than letting your money manage you. Envelope Accounting is a method of budgeting. A certain amount of money is set aside on a regular basis (i.e. monthly, bi-weekly, twice per month, etc.) in a metaphorical (and in some cases literal) "envelope" for a specific purpose, such as the house payment, a family vacation, or the day-to-day necessities like groceries, utilities, prescriptions, and gas.

Anytime you wish to make a purchase you look in the envelope for the type of purchase being considered to verify if sufficient funds exist to make the purchase. If the money is there, all is well. Otherwise, no purchase is made until the next allocation of funds. On the other hand, if you don't spend everything in the envelope during a given month, the next allocation is added to the remaining amount resulting in more money for the following month. If you don't spend anything from that envelope for the entire year, you will have enough money to pay cash for things such as Christmas gifts, property taxes, or car insurance- things that always seem to be a drain on the family budget if not planned in advance.

Why use Envelope Accounting?

When individuals set goals, write them down, and measure themselves regularly against those goals, performance improves. Money is spent on the things that are most important to us. The goal-setting comes from deciding how to allocate the money that comes into your control. Writing the goal consists of physically putting the money into the envelope for each desired goal. Measuring yourself consists of looking in the envelope often and evaluating where you stand.

General Philosophy

Envelopes or Account Planned Spending helps you allocate every dollar that comes in, so you can spend it on what you really want. Allocation means that you set dollars aside to be used for a specific purpose. That purpose may be for things like a new home, a family vacation, Christmas and the day-to-day worries like the groceries, utilities, prescriptions, and gas.

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