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Dear Olga: Clashless envelope system

Dear Olga,

How would you use an envelope style system for bill paying when you don't use cash?

Thank you,



Dear Anonymous,

The envelope system tends to be a favorite because it helps you visualize your goals and physically putting away money each time you get paid gives you accountability and satisfaction of watching your efforts grow.

Because this system works, banks have been working on incorporating cashless envelope systems within today's banking institutions. In June, I wrote a piece on sub-saving accounts. You can read it here.

If maintaining several bank accounts is too much of a hassle, there's another option. You can use previous year's or month's spending as a target amount to save and put that away into a saving account and pay the bills as they are due.

For example, let's say you want to save your utilities bills using this method each month. You have to pay the internet, gas, and electricity. Last month you paid $150 in total. Then plan to set aside that amount into a savings account during the month.

When using this system, I suggest adding a month and a half or two months into the account. Sometimes the end of the month and paydays don't align perfectly and there's nothing worse than having to wait extra days to pay an important bill.

This can help you avoid the timing issue and the extra padding can be good for seasonal fluctuations, like electricity in the warmers months because of AC usage.

Earlier this year, I wrote an article about setting intentions for you savings that you may find helpful. You can read it here.

If you need more guidance, I'm happy to hop on a quick call with you. Here's a link to my calendar!


If you have a money question, submit it here for a chance to be featured in the "Dear Olga" column!

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