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My grandmother, Big Mama, often wrote her budget on the back of old envelopes. I marveled at how she, a nursing assistant, managed to stay within her budget, making just above minimum wage while raising five grandchildren - without the help of state aid, which she was entitled to but nonetheless refused.

But Big Mama's skills went beyond just drafting a budget. Despite all kinds of financial mayhem, she was able to stick to her budget, never once paying a bill late or using credit as a crutch in leaner times.

A lot of people can draw up a budget but it's worthless unless you can maintain it. So how did a woman making so little manage to follow her budget? Let me share with you the secrets of Big Mama's budget management system.

The first thing my grandmother did was to automate her savings. She had part of her paycheck automatically deposited into a no-fee credit union savings account. This was her emergency money.

As disciplined and frugal as Big Mama was, she knew that if all her paycheck went into her regular bank account, she would spend it. So she put in place a mechanism to make sure she saved something from every paycheck.

This system will only work if you put up roadblocks that will make it harder to dip into this account for everyday living expenses. For example, don't get an ATM card when you set up the account. Consider choosing an institution with few branches.

If you make it as inconvenient as possible to get the money, you will leave it alone until a real emergency emerges.

The next secret to Big Mama's budget system was to keep track of when her bills were due. This, too, she did on the back of used envelopes. Big Mama was fanatical about staying on top of what bill she needed to pay from each paycheck.

On her paycheck envelope, she would write down how much was going to her emergency fund first. Then she noted which bills were being paid from that check.

Here's another trick to manage your budget - negotiate with your creditors to change your billing due dates. By controlling the due dates

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you avoid having all your bills come due at the same time.

As far as managing the daily dollars, there are various systems you can use. To keep track of what money was being spent, Big Mama used the envelope budgeting system. Simply, when my grandmother got paid she would divide the money up into various envelopes for her mortgage, telephone bill, car payment, etc.

Once the money was gone, that was it. She rarely borrowed from one envelope to make up for a shortfall in another category.

One of the problems with having easy electronic access to your money is there's no immediate visual clue that you are about to overspend in a certain category. Of course, you may not want to put your mortgage money in an envelope. But this system can be used for smaller budgeted items such as gas, food, clothes or what you've allotted for eating out.

If you like the concept of the envelope system but don't want to carry cash around, try Mvelopes Personal (www.mvelopes.com). Mvelopes is a secure online version of the envelope system. With Mvelopes you can divide your money in your virtual envelopes. Within each envelope you electronically track your transactions.

The service links directly to your bank and credit card accounts allowing you to download transactions in real time. The system links to more than 13,000 financial institutions. You can also pay your bills online. There are prepaid fees for whatever plan you choose.

Mvelopes is running a 30-day free trial offer so test the system and see if it helps you stick to your budget. If the envelope method doesn't appeal to you, then get a money management system, such as Quicken or Microsoft Money.

The software, which you can buy for as little as $30 for a basic package, allows you to download and track your checking, savings and credit card accounts. You can create a budget, automatically schedule and make bill payments, and verify the accuracy of your bank accounts or credit card charges. Personally, I love the pie charts and graphs you can create to see how you're doing.

Finally, Big Mama's biggest secret to sticking to her budget was having a purpose for every penny. She never spent any money without considering how that expenditure affected the financial goals she set for her life, such as paying off her home before she retired.

Big Mama would occasionally have to rework her budget. But one thing remained constant: She set financial priorities and let them dictate how she spent.

Write to Michelle Singletary in care of The Pantagraph, 301 W. Washington, Bloomington, IL 61702-2907.

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