Effective Money Management System

Do you know where your money goes? If not, try this two money management system
by  Dave Ramsey and Harv Ecker.

Dave Ramsey's Envelope System

1. Budget each paycheck. Budget is a dirty word to most people, but you must budget down to the last dime if you're going to successfully implement the envelope system.
2. Divide and conquer. Of course, there will be budget items that you cannot include in your envelope system, like bills paid by check or automatic withdraw. However, you can create categories like food, gas, clothing and entertainment.
3. Fill 'er Up. After you've categorized your cash expenses, fill each envelope with the money allotted for it in your budget. For example, if you allow $100 for clothing, put $100 in cash in your clothing envelope for the month.
4. When it's gone, it's gone. Once you've spent all the money in a given envelope, you're done spending for that category. If you go on a shopping spree and spend the $100 in your clothing envelope, you can't spend any more on clothes until you budget for that category again. That means no visits to the ATM to withdraw more money!
5. Don't be tempted. While debit cards can't get you directly into debt, if used carelessly, they can cause you to over-spend. There's something psychological about spending cash that hurts more than swiping a piece of plastic. If spending cash whenever possible can become a habit, you'll be less likely to over-spend or buy on impulse.
6. Give it time. It will take a few months to perfect your envelope system. Don't give up after a month or two if it's not clicking. You'll get the hang of it and see how beneficial the envelope system is as you dump debt, build wealth, and achieve financial peace! See ... simple!

Source: http://www.daveramsey.com/

T. Harv Eker's Jar System for Managing Money

1. Financial freedom account (FFA): This jar if for your financial freedom. Each month put 10% of your income in this jar. Money you put in this jar can be used to invest, start a business, create a passive income streams etc.
2. Necessities (NEC): Put 55% of your income in this jar for your necessities. It's for things like paying bills, food, necessary clothing etc.
3. Long term saving for spending (LTSS): Put 10% in this jar. You may have more than one LTSS jar. It's for things like a plasma TV, your family vacation, contingency fund, your children's education etc. If you have more than one LTSS, divide the 10% between the jars according to your priority.
4. Education (EDU): 10% that goes in this jar if for your own education. It could be used to attend seminars, buy books etc. Basically, it's for your continual education and learning.
5. Play: Allocate 10% of your income for you to have fun guilt-free. Use it to go to a fancy restaurant you've been eyeing, or a massage at a spa. Just do something fun. Let your inner child play.
6. Giving (GIV): Allocate 5% of your income to give to charity. If you want to allocate 10% for giving, take 5% off your NEC jar.