When you are starting a new business, it is important to have a good financial record. This record will help you keep track of your expenses, income, and assets. You also need to be able to show your creditors that you are in control of your finances. One way to keep your financial records is to use an envelope system. This system will help you keep track of your expenses, income, and assets in one place. You can also use this system to show your creditors that you are in control of your finances. To start using an envelope system, you first need to create a budget. This budget will help you figure out how much money you need each month to cover your expenses and make ends meet. Next, create a list of all the things that you need money for. This list can include things like food, rent, and bills. Next, find the amount of money that each item costs and divide this number by the number of items on the list. This will give you the amount of money that you need each month to cover your expenses and make ends meet. Next, find the amount of money that each item costs in cash or check form and divide this number by the number of items on the list. This will give you the amount of money that you need each month to cover your expenses and make ends meet without having to spend any extra cash or checks. Finally, add up these numbers and divide this total by 12 months or 365 days or whatever time period you want it to take for everything to be paid off (12 months is usually enough). This should give you an idea how much money per month would be needed for everything on your list plus interest payments on any outstanding debt! Once everything is set up like this, it is easy enough justto print out all the information needed for each month (e.g., budgeted amounts for food/rent/ bills) and put them into an envelope with some stamps!
The envelope system is a simple and fun way to save, organize, and store your receipts and keep reliable financial records.
Step 1: Save All Your Receipts During the Month
Throughout the month, get a receipt for each purchase you make. If a cashier doesn’t give you your receipt, don’t forget to ask. When making online purchases, make sure to print out the receipts immediately. If you can, print them out on thin paper and format them so they’re similar in shape and size to normal receipts.
Keep your receipts in your wallet until they start to overflow, then dump them into a designated envelope at home. Be sure to label the envelope something like “Current Receipts,” and keep it in a safe an easy-to-access location.
Step 2: Organize Your Receipts at the End of the Month
Before you can store your records in an orderly fashion, you need to organize the receipts. And before you can organize them, you need to finalize each receipt individually.
Go through each one and highlight:
The date The total amount spent (or refunded) The type of transaction (e. g. cash, debit, check, gift card)
Make sure to use a light-colored highlighter so that the ink from the receipt still shows through. Some receipts have very light ink that fades away once highlighted over. In that case simply highlight underneath the information in a straight line so that it doesn’t bleed into the information.
After highlighting, write down notes directly onto the receipts as needed:
Make note of tax deductible expenses which may be business related or for charity Note returns, why they were made, how much money was refunded, and the new net totals Label any receipts where it’s not immediately obvious where the purchase was made, to whom it was made, or why it was made Write down any miscellaneous notes that will help you keep better records, possibly make future returns, budget in the future, and be a better consumer (e. g. noting how using a certain coupon saved you half-off, when a big sale occurred, etc. )
If you find that there’s not enough space on a particular receipt for taking these notes, then write them on a small piece of paper and staple it to the back of the corresponding receipt. Make sure to write a reminder on the receipt itself to reference the extra notes on the next page.
Here’s what a finalized receipt should look like (note that it’s staple to other receipts beneath it):
Once you’re done taking notes, organize the batch in chronological order and staple it. Alternatively, you can use a paper clip. It doesn’t matter if you use reverse chronological order instead (with the most recent receipts on the top) but whatever you choose — keep it consistent. Otherwise, you’ll have a hard time locating individual receipts later on when you have to switch between two different ordering systems.
Step 3: Store Your Receipts Using Envelopes and Boxes
Once you prepare the monthly batch of receipts, place it into an envelope. You may have to fold some receipts over so that the batch will fit. Consider color-coding an envelope for the season or month if that helps you stay organized.
Then fold the envelope closed (without sealing it) and flip it over. Use a black or dark-colored sharpie to label the envelope. Follow the example below, with the month and year in the upper left, or label in a way that’s easier for you to work with.
Once you have more than one month collected, stack the envelopes together in chronological order (keep it consistent with the order you have for the actual receipts). Put a rubber band around the bundle.
At the end of the year, you’ll have all your financial records bundled within twelve envelopes. Over multiple years, you’ll gather multiple bundles.
Keep your envelope bundles stored in a box. Keep the box someplace safe and easily accessible. Over time you may accumulate multiple boxes, which will be easy to stack and store. And any time you need to reference your financial records, they’ll be easy to find and access.
It’s ideal to use a visually appealing box that represents your financial goals. The box in the example below showcases comfortable chairs on a relaxing beach scene, as more vacation time is one measure of financial success.
With the easy-to-implement envelope system, you can keep all your financial records in one place with little hassle. And you can keep it fun by using colored pens, highlighters, and envelopes, and a visually appealing box that keeps you focused on financial success!
