Controlling your spending doesn’t stop at making a budget and allocating your money to various categories. Next, you have to stick to the plan you create. One way to do that is to go old-school and spend more cash money instead of swiping all the time.
The envelope method, a favorite of personal finance expert Dave Ramsey, involves putting exactly the amount of cash you have budgeted for each category in a physical envelope. Your envelope categories might include:
That’s just to name a few. Make envelopes for each category that appears in your budget. When the envelope for that category is empty, you’re done spending in that category for the rest of the month. You can pluck cash from another envelope if you really need to make a purchase in that now-empty category, but you’ll have to make a sacrifice somewhere in the end.
The envelope method isn’t a great fit for recurring expenses you pay online or by mail, like housing costs and utilities. But for anything that varies—and any category that has potential for you to save money on the fly—the envelope method is a good option.
And don’t worry, you don’t have to carry a bunch of envelopes full of cash with you everywhere. Know you’re going out to dinner and a movie? Take your “restaurants” and “entertainment” envelopes and you’ll be all set for your night out.