Cash Envelopes: Your Best Solution to Spending Less
Creating and sticking to a household budget is no small feat, especially if you are new to budgeting. Chronic overspending causes carrying credit card debt, so it’s crucial to master budgeting and learn to live below your means.
The cash envelope is a budgeting system that only uses cash to pay for specific cost categories. Each cash envelope holds the money you allocate to that category for the month.
Use cash envelopes to control discretionary expenses for these categories:
– Groceries
– Eating Out
– Entertainment/Fun Money
– Clothing and Accessories
– Personal Care
– Home Purchases
– Spending Money
– Gifts
Tracking your spending is the best way to figure out where your money is going. Track yourself every day for two or three months to get a clear picture of your spending habits.
Using cash envelopes will help you stick to your spending plan. Once your envelope is empty, you stop spending in that category until you withdraw more money after receiving your next paycheck or until the following month, whichever comes first.