Your Best Solution to Spending Less:  Cash Envelopes Story

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.

Thankfully, most people tend to overspend on just a few budget categories, which is why cash envelopes can be effective. They are a simple tool to control spending in those targeted areas. Here is a guide for using cash envelopes to help you manage your budget and stop overspending today.

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. This significantly reduces impulse buying and overspending. Using cash to pay is an excellent way to track and control spending.

What are Cash Envelopes?

Use cash envelopes to control discretionary expenses for these categories: – Groceries – Eating Out – Entertainment/Fun Money – Clothing and Accessories – Personal Care (Cosmetics, hair salon visits, manicures, etc.) – Home Purchases (decor, home repairs/maintenance, lawn care, etc.) – Spending Money – Gifts

How do You Use Cash Envelopes for Budgeting?

First, determine the categories you tend to overspend on. 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.

Decide on Your Cash Envelope Categories

Next, head to the bank to withdraw the money to place in your cash envelopes. Withdraw the funds in congruence with when you get paid. Divide the total amount of money you will need by your number of paychecks for the month to determine the cash to withdraw.

Pull Money Out of the Bank

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